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Everywhere you look in this corner of Shanghai, there are mice. For Wang Zhugang, this is cause for great delight. After spending several years researching molecular medicine at New York City's Memorial Sloan-Kettering Cancer Center, Wang received a call from an official in his native Shanghai. Would he be interested in returning home? Wang initially declined. He was working for one of the world's top scientific institutions, and he recalled from his undergraduate days the wretched state of Chinese labs. The official presented a different vision: Wang would be given tens of millions of dollars to run a new state-of-the-art facility. A place at the best school in town would be reserved for his daughter. And, best of all, he would be given thousands and thousands of mice. In 2001, Wang founded the Shanghai Research Center for Biomodel Organisms, which in just five years has bred more than 100 types of genetically engineered mice to help decode diseases like cancer and diabetes. Next year, Wang will move into a new $25 million lab that will house 150,000 mice, compared to the mere 7,000 he keeps today. "My colleagues who stayed in the U.S. are still cooking in their labs, while I have the opportunity to run an entire research center," says the 45-year-old biologist. "If you move back to China, you have more room to develop your potential. It's a very exciting environment."

Could Asia be home to the next scientific revolution? We all know of the region's rich history of innovation?paper, the magnetic compass, a smallpox inoculation, even the number zero originated in Asia. In the first few millenniums of human civilization, no other continent could rival it. Yet China, which invented gunpowder in the 10th century, failed to adequately develop the technology and succumbed to Western cannons by the 19th century. As its rulers turned inward, the Middle Kingdom even abandoned the mechanical clock, which it had devised centuries before. India, despite a proud mathematical and astronomical tradition, also proceeded to slumber for centuries. Meanwhile, the West, with its Enlightenment, Industrial Revolution and Space Race, became synonymous with scientific achievement. Many years ahead of the rest of the scientific pack, America, Europe and, more recently, Japan overwhelmingly claimed the economic fruits of innovation.

But the rest of Asia is now making up for lost time. Not content to subsist on the lowest rung of the technological ladder by churning out endless Christmas-tree ornaments and copycat computer parts, emerging Asian economies are tying their futures?and their national pride?to the miracles of science. It's not an impossible vision: Just look at how Japan transformed itself from a producer of cheap transistor radios to a world-class innovator. To foster their dreams, Asian nations have dramatically increased their government science spending: between 1995 and 2005, China more than doubled the percentage of its GDP invested in R&D, from 0.6% to 1.3%, while South Korea has raised its funding from $9.8 billion in 1994 to $19.4 billion in 2004. Such cash infusions have lured back many seasoned Asian researchers from the West, where science budgets are stagnating or, in some countries, even dwindling. (In the U.S., for instance, federal basic-research outlays for physical sciences and engineering as a percentage of GDP have been declining for the past 30 years, to less than 0.05% in 2003.) China alone has welcomed back 200,000 returnees, the majority of whom earned science degrees, since it began sending students overseas in the 1980s. The science push has already yielded results for Asia's developing economies: their share of global high-tech exports rose from 7% in 1980 to 25% in 2001, while the U.S. share declined from 31% to 18%, according to the U.S. National Science Foundation. At the same time, the Asian share of all published scientific papers climbed from 16% in 1990 to 25% in 2004.

By 2010, 90% of all Ph.D.-holding scientists and engineers will be living in Asia, according to a prediction by the late Nobel-prizewinning chemist Richard Smalley, who died last year. That claim might sound outlandish, but already 78% of science and engineering doctorates are earned outside the U.S., and nearly one-third of those awarded in the U.S. go to non-Americans. In particular, Asians are targeting younger scientific fields that hold the potential for rich discoveries. Just a couple years after making nanotechnology a national priority, China became the second-highest contributor to nanotechnology journals in 2004. "Asia is becoming the next destination for innovation," says Sri Kumar, who returned from Chicago to Bangalore last year to set up a biotech venture-capital fund. "Look at all the cutting-edge firms in the U.S.: almost half the staff are Asians. And people are coming home now. With all the talent and training that's here, there's enough to start a revolution."

Revolution isn't a concept usually associated with Singapore, with its manicured lawns and pristine shopping malls. But in 2000, the city-state decided to foment creativity by setting aside 200 hectares for a vast science park called One North, a reference to Singapore's latitude. The Field of Dreams approach to innovation?build it and the researchers will come?has met with its share of skeptics. But in just three years, the scientists at One North's lavishly equipped life-sciences hub, Biopolis, have been awarded 54 patents for everything from drug-loaded contact lenses and artificial-bone implants to a diagnostic kit for Severe Acute Respiratory Syndrome. Next year, Biopolis will be joined by the less catchily named Fusionopolis, a physics- and engineering-research base. Although Singapore has sent 500 science students abroad to pursue advanced degrees?at an average cost to the government of $380,000 per head?the island nation of 4.4 million is simply too small to rely on local talent to fill One North's laboratories. So Singapore has imported top foreign scientists like Sydney Brenner, a Nobel-prizewinning geneticist from the U.S., and Edison Liu, former director of clinical science at the U.S. National Cancer Institute (see sidebar). Pharmaceutical giants like Novartis and Eli Lilly have also set up research centers at Biopolis, as has an Australian stem-cell venture helmed by British cloning specialist Alan Colman of Dolly the sheep fame. "People are queuing up to come here now," says David Lane, a pioneering cancer researcher lured from Britain's University of Dundee in 2004 to head the Institute of Molecular and Cell Biology at Biopolis.

If Singapore is the test-tube baby of Asian science?enjoying a perfectly controlled environment and regimented doses of cash?China is the hungry teenager with far grander dreams. Beijing's top leaders, nearly all of whom have backgrounds in engineering, announced plans in February to nearly double the country's current R&D spending of $29.4 billion a year by 2010. Much of the funding is flowing into fields where China believes it can make a long-term impact, either because the disciplines are relatively new (genomics and nanotech) or because progress in the West has been impeded by ethical concerns (stem-cell research and genetically modified crops). After years of political mistrust of science?Mao Zedong even denounced Einstein?China awarded more than 30,000 doctorates in 2004, up from 12,000 in 2001. The nation also graduated 200,000 engineers in 2004. Government incentives, like hefty tax breaks and prized spots at the nation's 100-plus new science parks, have attracted an army of returnees like mouse researcher Wang. "Sea turtles," as these prodigal sons and daughters are called, now make up an astonishing 81% of members of the Chinese Academy of Sciences.

This brain gain has accelerated China's science drive. In the last five years, a coterie of returnee researchers in Beijing has outpaced the competition in the U.S. and Japan by becoming the first to sequence the rice, silkworm, chicken and pig genomes. Meanwhile, Sheng Huizhen, a Chinese biologist who worked for 11 years at the U.S. National Institutes of Health (NIH), returned in 1999 to do stem-cell research in China because ethical considerations were making what she wanted to do nearly impossible in America. The Shanghai government, by contrast, gave her $875,000 to start a lab, now located in a makeshift space carved out of a converted kindergarten. Despite the lackluster surroundings, Sheng announced in 2003 that she had extracted stem cells from a hybrid rabbit-human embryo created from human skin cells and rabbit eggs. Although the results were not published in any top-flight international journal, a team of researchers in Britain announced earlier this year that it's trying to replicate her work. "This is an open field, and China is willing to allow you to experiment," says Sheng. "Coming back was too good an offer to refuse." Many of the 750 multinational R&D centers based in China?up from 200 in 2002?are also run by returnees. Innovations from these centers include enhancements of Microsoft's Web-search technology and Motorola innovations that allow users to snap pictures of business cards, automatically filing the information in the phone's database. The scientific breakthroughs have been so plentiful that the U.S. National Science Foundation set up a Beijing branch in May to monitor Chinese progress.

Beyond the returnee brain trust, a significant part of Asia's science boom relies on outsourcing by foreign companies. In India, a new biotech venture opens up almost every week. Although Bangalore-based Biocon, India's biggest science concern, is developing a new type of oral insulin, most Indian firms are focused on administering drug trials for Western companies or churning out cheap vaccines for diseases like measles and Hepatitis B. Costs for drug trials and production in India are roughly half those in the West. And there's a vast supply of people willing to take part in tests. "If there's any disease you're trying to produce a drug for, we have thousands, if not millions, of patients who have it in India," says N.S. Moorthy, vice president of clinical operations at Saneron, an American firm that's developing a stem-cell bank in partnership with Madras-based LifeCell.

It's not a bad strategy for India to start out this way, primarily relying on foreign money to educate the next generation of its scientists. "We need to build a base for innovation," says Kiran Mazumdar-Shaw, Biocon's chief executive and India's first woman billionaire. "We've found that the best way to leapfrog into innovation is as a partner." Biocon hopes to do just that with its oral formula for insulin, which it first worked on with a U.S. firm and is now developing on its own. There's every sign that this trend of foreign firms heading to Asia to drive down research costs will grow: more than half of the American respondents to a study this year by the Kauffman Foundation, an educational-research NGO, said they had either shifted or were planning to shift R&D facilities to India or China.

For all the hype around Asian science, there are two words that can cause even the most ardent advocate's shoulders to sag: Dr. Hwang. The South Korean researcher Hwang Woo Suk was heralded as the icon of Asian innovation in 2004 when he claimed to have developed a technique for cloning human embryonic stem cells?only to be caught being a little too creative. Hwang had faked his results, and many Asian scientists felt the cloud of his disgrace descend upon themselves, too. More fundamentally, though, Hwang's saga exposes some of the perils of Asian innovation. A top-down Confucian ethic apparently kept his subordinates from speaking out earlier about his shenanigans. And the fervent nationalistic pride generated by Hwang's achievements may have intensified the pressure on a star researcher to keep churning out ever more impressive results. "Many Chinese scientists are in a hurry," says Lu Ke, one of the world's top nanotech researchers, who was schooled in strict German research methods at the Max Planck Institute in Stuttgart before returning to China's Institute of Metal Research in Shenyang. "But nature doesn't work on a rushed schedule. To do good science, you need to do things slowly and rigidly."

Some Asian scientists are guilty of more than just a rush job. In May, one of China's most lauded computer researchers, Chen Jin, a 37-year-old returnee from Texas, was unmasked as having faked what he had claimed was a homegrown digital signal-processing chip that could have helped China lower its reliance on foreign computer technology. At a science conference in Beijing earlier this year, a member of China's cabinet released the results of a survey in which 60% of 180 Chinese scientists admitted to having paid to appear in journals, while around the same percentage said they had cribbed from other people's research. "In China, people seem to have become millionaires overnight, so there are also unrealistic expectations about what we can accomplish in science," says molecular biologist Wang. "That can create an environment in which people feel pressured to fake results." The sanctity of ideas is further eroded by the disregard for intellectual property in many Asian countries. What would compel a scientist to dedicate years to basic research if he or she knows that work will be ripped off when it reaches the commercial stage? In 2004, nanoscientist Lu unveiled a machine that can apply a thin layer of superstrong nanocopper on another material, potentially adding years to the life of industrial tools. Already, he says, pirated models of his machine have turned up in China. Can he take legal action? Lu just shrugs and laughs.

Despite these obstacles, Asian science is advancing so fast that U.S President George W. Bush warned in this year's State of the Union speech that innovations in Asia could come at America's expense. Even South Korea remains one of the epicenters of stem-cell research, despite a loss of morale (and some funding) following Hwang's downfall. Of the 78 stem-cell lines registered at NIH, six come courtesy of South Korean labs. Lavish spending has helped Seoul's climb up the technology ladder, but Korean researchers also credit good ol' Asian values of hard work, hard work and more hard work. "People used to say that stem-cell research was on scientists' 'avoid list' because it was labor intensive and demanded long hours," says Chung Hyung Min, head of Cha Biotech in Seoul, which registered one of the Korean stem-cell lines at NIH. Chung's last vacation was five years ago. "At the end of the day," he says, "it's about who is more willing to spend longer hours at the lab."

Chinese mouse researcher Wang observes that he, too, works far longer hours than he did back in America; he even has a mattress in his office to shorten the commute to work. "When the country is depending on your success," says Wang, "it can push you to achieve things you never thought possible." His words perfectly express both the promise?and the potential pitfalls?of Asia's scientific revolution.

• Hannah Beech
• A potent brew of talent, ambition and serious money are making the region a leader in innovation