The ‘forever war’ between China and Washington will drive innovation and the UK should be ready to act

Conflict, not profit, is often the most important driver of innovation. It creates urgency in a country’s leaders to do everything possible to come out on top.

The rocket technology developed to power V2 bombs that rained on London in the Second World War was refined and reused in the Cold War space race to put the first man on the Moon. That one small step for Neil Armstrong was meant to demonstrate America’s technological – and cultural – superiority in the face of an aggressive communist system led by Moscow.

In yet another instance of history repeating, a comparable technology race is emerging today with China and it’s becoming a real headache for Europe, which has already been left behind. The situation is likely to get worse.

Washington hawks have watched with horror as China has moved up the value chain from being a low-cost manufacturer to a world leader in a number of key areas – outclassing the US in 5G, AI, biotechnology and quantum computing. They regard this as an existential threat to America.

As this wider conflict accelerates, the collateral damage to Europe’s economy is likely to grow, primarily because of its failure to nurture global tech champions. Where is Europe’s Facebook, Google or Amazon?