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Innovation system of China Second BRICS in Brazil, April 25-27,2007. LIU Xielin Professor of Graduate University of Chinese Academy of Science Nannan LUNDIN Örebro University & Research Institute of Industrial Economics, Sweden nannan.lundin@esi.oru.se.
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Innovation system of ChinaSecond BRICS in Brazil, April 25-27,2007. LIU Xielin Professor of Graduate University of Chinese Academy of Science Nannan LUNDIN Örebro University & Research Institute of Industrial Economics, Sweden nannan.lundin@esi.oru.se
The structure of Chinese Innovation System • The roles of main actors in the system: from a Government research institutes and university centered system to a company-centered system. • The linkages of the system---Industry-science linkages • Company system • The country-specific factors in the system
A.Traditional NIS of China • Government research institutes and university had a very important role in innovation. they are the main actor of Science and Technology for a long time. • Company was a product base with little R&D. • Shortage of the economy, no competition and IPR made the system lack of innovation motivation. • Government plan was the key for the system. • Lot of technology import to meets the demand of the production
Table 1 The relative importance of key actors in terms of R&D expenditure, % Source: China Statistical Yearbook on Science and Technology, 2004, 2006.
B.Reform from 1980s on • Introduce the competition to the S&T system. • To reduce the number of GRI. in1998, the State Council decided to transform 242 GRIs at the national level into technology-based enterprises or technology service agencies. • Setting up national science parks to commercialize the results of GRI and university.
C.Science-industry linkage • From 1980s on, GRIs and universities were allowed and encouraged to set up their own spin-offs so that they could commercialize their technology directly. • Outsourcing of S&T to GRIs and/or universities has become an integral part of development strategy of industrial enterprises.
Table 2 University spin-offs Sources: Statistics of University’s industry in 2004 in China, Center for S&T for Development, Ministry of Education, 2005.
Table 3 S&T outsourcing of Industrial enterprises to Universities Source: Statistics of Science and Technology in Higher Education, 2000-2005.
D.Company system • More making than buying of the technology. • R&D spending is expanding quickly. • SME is rising. • Multinational play more and more important role. • Outsourcing and alliance become the new strategy for innovation in company level.
Their innovation capability is poor Table 9 Chinese and Korean patent registrations in the U.S. Youngrak Choi, Rise of New Asian R&D Forces,paper for New Asian Dynamics in Science, Technology, and Innovation, Copenhagen, Denmark, September 27-29, 2006.
More making than buying of the technology now R&D expenditure and technology importation (unit: 100 million RMB)
Table 7 Ratio of R&D/sales in large and medium sized companies, %
The SME is rising Table 10 A simplified comparison between small and large S&T-based firms,% , (2004) Source: Lundin et .al, 2006a.
Table 12 The importance of FDI firms in the manufacturing sector, 1998-2004 (Share in the manufacturing sector, %) Source: Lundin et. al, 2006b.
Outsourcing and alliance strategy is very popular • Lenovo, Huawei, Haier, all those companies used widely the strategy of alliance with foreign companies in the world. • From automobile industry to IT industry, • some already got return (Lenovo). Some fell in trouble (BOE).
Table 18 Selected M&A deals by Chinese firms ( 2001-2005) Source: Wu (2005), The Boston Consulting Group (2005) and various press reports. Source: Wu (2005), The Boston Consulting Group (2005) and various press reports.
E.Country specific factors • Government play a very important role in in industrial innovation. Deferent layers of the government always try to interfere innovation process. • Regional gap is widening.
Country-specific factors • Lack of IPR • Too strong merit-based evaluation make the system little capability to encourage risk activity in science and innovation
F. Conclusion • The system has been in big transition. • Company is still weak but in getting more and more power. • The system is very open and make innovation here more global sense. • Government still matters in lots of area, from technology standards to large project. • The ecology here is still poor for radical innovation.