A Comparative Study of Knowledge-Based Economy Development Between China and USA

In this paper, the author analyzes the gap in knowledge-based economy development between China and the United States, explores its cause, and gives some constructive suggestions to promote Chinese knowledge-based economy development. The paper has three parts. The first is a brief literature review. The author concludes that at present the indicator model is more proper than the econometric model and statistical framework. In the second part, the author develops an indicator model with four dimensions: knowledge input, human capital, ICT application, and innovation performance. Each dimension has several different indicators. The Analytic Hierarchy Process (AHP) is used to give those indicators different weights and to compose them into a compound index in all hierarchies. On the basis of the above methodology, the third part calculates and compares the overall index and four dimension index differences of the development of Chinese and American. knowledge-based economies. There is a large gap between China and the United States. The dimension of innovation performance embodies this gap. The next dimensions are human capital, knowledge input, and ICT application in turn. The author then discusses reasons for such a great lag between China and the United States. The conclusion sums up the main challenges and puts forward some suggestions to promote the Chinese knowledge-based economy development