That's a very compelling theory with numerous counterexamples, Japan and Singapore being two countries rich in labor and poor in resources that are highly innovative. And the standard response for a resource rich, labor poor country is for its leaders to sell out for personal gain (see: all of the Third World), rather than innovate.

If you're looking for explanations for the United State's global economic dominance, try the outcome of WWII. Nothing like conquering the world to give one the economic edge. And as far as innovation goes, this country wasn't settled by the world's tired and poor, it was settled by the world's ambitious nonconformists. Of course the US excels over other countries in all sorts of ways; their best people moved here! (see sports, science, business, arts...)

China's got a few obstacles to overcome before they're a serious player in innovation, starting with their "assets", the huge population. That population is also largely dirt poor, uneducated, and repressed into inaction. If the US wants to remain world leader it should start acting like one, and stop being afraid of another big country finding a little bit of success.