Materials Science Matters: The Talent Central to China’s Tech Pivot

More than knowledge or money, talent is the crux that will determine China’s technological progress. That’s because knowledge today is relatively evenly distributed and easy to access. Capital, too, is abundant and largely globalized. Talent, however, is unevenly distributed and much harder to cultivate.

China’s talent challenge will intensify as it grapples with a technology pivot from bits to atoms, which requires an attendant shift in the STEM talent pipeline. In particular, forging world-class materials scientists will be key.

In the world of atoms, coders matter less than chemists. Whether it’s chips, batteries, magnets, or next-gen nuclear power, innovation doesn’t depend on algorithmic breakthroughs but rather from breaking through the physical material and chemical constraints of a product to increase efficiency or generate more power, or ideally, both. Look no further than the latest brouhaha over the LK-99 superconductor as an indicator of how potential breakthroughs can stir passions and move markets.

Cultivating that materials science talent will be anything but easy, however, because the Chinese industry is beset by three main challenges: 1) an incentive problem that deters the brightest minds; 2) a mismatch problem between academic training and early career opportunities; 3) a misallocation problem where talent isn’t going to the right places or into the right sectors.

The Incentive Problem

China’s so-called “Silicon Delta” along the east coast defined the tech industry for decades. That booming industry turned out some of the most profitable and high-profile firms with lucrative compensation packages. If you were a top STEM talent right out of college, those software and platform companies were where you wanted to land. For instance, even today, there’s on average a 40% difference in salary for employees at China’s new materials firms compared to those in software engineering.

That pay gap certainly shapes incentives for any college graduate, apparently reflected in choices in majors. Over the past eight years, for every Chinese undergraduate enrolled in materials science programs, more than four enrolled in computer science (see Figure 1).

Figure 1. CS Undergraduates Grew 62% Compared to 14% for Materials Science
Source: National Undergraduate Enrollment Plan; Ministry of Education.

Beyond compensation, materials science jobs are perceived as dirty and hazardous, like steel smelting, rather than as technicians and researchers in sterile environments manipulating nano materials. That popular association of materials science with “blue-collar” has reinforced its reputation as a “dead-end degree” (天坑专业) in China with little career prospects.

These mutually reinforcing dynamics have disincentivized top young talent from entering the field, resulting in a projected shortage of 4 million materials science workers by 2025. Making up this shortage will take some time, because it has to start at the university level. Moreover, a few successful new materials startups will go a long way toward shifting the industry’s reputation to one that’s on par with the elite and cutting-edge vibe of Silicon Valley.

The Mismatch Problem

On the demand side, the industry needs more seasoned veterans but what’s available tend to be recent undergraduates and mid-career workers. Indeed, China’s materials science talent pool skews young in an industry that has typically depended on a legion of veterans who can mentor young talent and shepherd their growth. In such a highly technical and complex field, young talent requires a lot of on-the-job training and accumulated experience before they can demonstrate their value.

Figure 2. Too Many Millennials, Not Enough Boomers in China’s Materials Science
Note: Data show “top materials science researchers,” a proxy for top talent; China = workers employed at institutions in China.
Source: Bo Guan Big Data.

But rather than investing in on-the-job training for young recruits, Chinese new materials companies often expect young employees to be ready on day one. Yet the undergrads tend to be steeped in theoretical science training with little experience in practical applications and production methods that are important for commercialization. For instance, investing in apprenticeship programs, which have been very successful in Germany where a robust materials science industry exists, might be worthwhile.

The Misallocation Problem

Finally, the talent isn’t concentrated where the action is. While leading materials science companies—those in hot sectors like semiconductors and cleantech—are concentrated in the Yangtze River Delta, six out of the top ten materials science universities are in northern China, the equivalent of the rustbelt (see Figure 3).

Figure 3. Top Materials Science Programs Are in China’s Rustbelt
Note: Data show existing number of talents at the institution.
Source: ScientistIn.

Like all rustbelts, legacy industries such as construction and petrochemicals proliferate. Incidentally, materials science enrollment is growing the fastest in petrochemical hubs like Shandong and Liaoning. With these kinds of employers, it is no wonder that materials science gets a bad rap for being little more than a factory worker rather than an elite scientist. Indeed, only about one-quarter of materials science talent work in high-tech sectors like chips and cleantech that Beijing has prioritized (see Figure 4).

Figure 4. Most Materials Science Talent Don’t Work in Key Tech Sectors
Source: XHES&COMPANY.

The rising prominence of materials science in China’s technology goals will need to be matched by a talent pipeline that can deliver on those goals—everything from carbon fiber for commercial jets to photoresist for fabricating advanced logic chips. But serious questions remain about whether the existing talent will be up to the task. In future analyses, we will use different cases to illustrate both the potential and peril of China’s materials science talent.