Innovation Survey on Chinese Industrial Enterprises

1. Innovation Survey on Chinese Industrial Enterprises Department of Social, Sciences and Technology Statistics National Bureau of Statistics of China (NBS) December 2010, Nepal

2. The presentation outline: • The background and motivation for carrying out the first innovation survey in China • The Structure of the Chinese questionnaire • The similarities and differences between Chinese questionnaire and CIS questionnaire • The Survey Methodology • The preliminary results from the first innovation of China • The concluding remarks and future plan for the development of innovation survey

3. Background & motivation 1. Needs from the perspective of policy-making 2. Needs for achieving international comparability through exchange and mutual learning. 3. Needs for further developing the statistical system of China

4. Needs from the perspective of policy-making • In the Chinese process of building a well-off society in an all-roundway, the economic reform and openness will remain as crucial development strategies. • Beyond the introduction of advanced foreign technology, indigenous innovation capacity building will be the focus of future development strategies when promoting the openness of the Chinese economy.

5. Needs from the perspective of policy-making • On the other hand, improving the enterprise’ innovation ability is very important to transforming the economic growth mode and reducing the consumption of resource and energy. • In this background, the Chinese government declared the new development strategy in 2006, namely to transfer China to an innovation-oriented and strong indigenous innovation capacity.

6. Needs from the perspective of policy-making At the current stage, there are a large number of innovation policy instruments, which are being implemented by the Chinese government. To meet the information needs of such macroeconomic management and to reflect/measure the effects of these innovation policies, the S&T statistical agency in China have an important task.

7. Needs for achieving international comparability through exchange and mutual learning • In recent years, the innovation capacity and activities of Chinese enterprises have received considerably attention, from many foreign/ European governmental agencies and researchers from universities and research institutes. Some proposals for research co-operation with the NBS regarding innovation of enterprises in China have been developed.

8. Needs for achieving international comparability through exchange and mutual learning • At the same time, China also considers innovative countries in Europe a target to catch up. Therefore, it is necessary to carry out international comparative studies to meet the need for benchmarking with more advanced innovative countries.

9. Needs for further developing and completing the statistical system of China • In the last two decades, only R&D statistics was included in the national indicator system. While most of EU countries have carried out Community Innovation Survey (CIS) on a regular basis, China did not have regular innovation survey praxis. Human resources involved in S&T indicator system has been also limited.

10. Needs for further developing and completing the statistical system of China • Due to these restraints, it leaves large room for improvement, in terms of international comparability, in fields of survey practices, personnel training, data quality, research methodology and data collection. • Therefore, we would like to take this opportunity when S&T and innovation are becoming increasingly important issues, not only for the Chinese government but also for the international community, in the face of globalization, to develop the S&T statistics system, and to establish the regular innovation survey system.

11. Background & motivation Based on the above perspectives, according to the standard /spirit of Oslo manual and CIS4, with the technical aids from Nordic experts, the first innovation survey of China in the scope of industrial enterprise was conducted in 2007.

12. The structure of the questionnaire The survey aims to collect information for the period 2004-2006, regarding the industrial enterprises’ innovation in terms of expenditure, effects and influencing factors as well as the understanding (perception) of innovation of the CEOs (at the managing /decision-making level). The survey questionnaire is divided into two parts. The first part is Information on Industrial Enterprises’ Innovation, the second part is the Manager/CEO Survey.

13. The structure of the questionnaire Part 1: Industrial Enterprises’ Innovation information S1. General information about the enterprise S2.Product innovation S3. Process innovation S4. Ongoing or abandoned innovation activities and reasons for abandoning innovation activities

14. The structure of the questionnaire S5. Innovation activities and expenditure S6. Output of Innovation S7. Intellectual property rights Protection

15. The structure of the questionnaire Part 2:Manager/CEO Survey Questionnaire S1. Information about the manager /CEO S2. Opinion on the importance of innovation S3. The effects of product and process innovation S4. Source of information of innovation

16. The structure of the questionnaire S5. Promoting factors for the success of innovation S6. Incentive for innovation S7-S8. Effect of various government policies on innovation S9.Future innovation strategy

17. The similarities and differences between Chinese questionnaire and CIS questionnaire The structure presented above shows considerable similarities between the Chinese survey questionnaire and the CIS questionnaire. In briefly, to a large extent, the Chinese questionnaire covers the same topics and the same questions as in the CIS questionnaire.

18. The similarities and differences between Chinese questionnaire and CIS questionnaire On the other hand, there are also some differences, which can be summarised as follows : 1. The questionnaire is divided into two parts. the first part is supposed to be completed jointly by units of S&T management, coordination and accounting, organised by the responsible for innovation activities of the enterprise. The second part is expected to be completed by the manager/CEO who is in charge/responsible for decision making concerning innovation activities of the enterprise.

19. The similarities and differences between Chinese questionnaire and CIS questionnaire 2. In the CEO questionnaire, there are a number of China-specific questions, such as promoting factors, incentive instruments, effects of various government policies and enterprises’ future innovation strategy. They are of great policy interest.

20. The similarities and differences between Chinese questionnaire and CIS questionnaire 3.The key concepts and definitions are slightly different, such as product innovation, process innovation and new product, etc. (due to the article space limitations, the concrete differences no longer are pointed out in this report. If you are interested in these issues, please contact with us)

21. The similarities and differences between Chinese questionnaire and CIS questionnaire In a word, there are some modifications in the Chinese innovation survey questionnaire compared to the CIS questions, which are motivated by the need to maintain the international comparability as well as the need to reflect the China-specific context.

22. The survey methodology • The time period The innovation survey of China covers the period 2004-2006, whereas the CIS4 covers the observation period 2002-2004.

23. The survey methodology 2. The survey object: Industrial enterprises • Large and Medium-sized industrial Enterprises (LMEs) • Small-sized industrial enterprises with annual turnover above 5 million RMB Classification of Large, Medium and Small Enterprises Firms are classified as large if all three criteria in column (1) are satisfied. The remaining firms are classified as medium if all three lower bounds in column (2) are satisfied. Otherwise they are classified as small

24. The Survey methodology 2. The survey method • Census survey on LMEs • Sample survey on small-sized enterprises 3. Coverage of the survey • Totally 67,242 LMEs and small enterprises were included • The sample size of small-sized enterprises drawn by NBS were 42,600 and the sampling ratio was equal to 16.3% • the response rate was 82%

25. The Survey methodology • The survey is organized by the department of Social, Science and Technology statistics of NBS. It is responsible for organisation and leadership, and undertakes the specific statistics work, including the questionnaire and guideline design, Provincial and Municipal statistician training, data processing and publishing, and so on. Provincial and Municipal Bureaus of statistics are responsible for enterprises’ personnel training, collecting and processing data, submitting the data to NBS, etc. The questionnaires are filled out by the enterprises’ respondents after being trained and reading the guideline.

26. The survey results • Innovation activity during 2004-2006. • Who developed product and process innovations? • Innovation expenditures in 2006. • Information source of innovation during 2004-2006. • Effects of innovations. • Share of revenue in 2006 from product innovations. • Promoting factors for success of innovations. • Hampering factors for innovations.

27. Innovation activity during 2004-2006 • 28.8 % of surveyed enterprises conducted innovation activity of which: • 19.9% introduced both product and process innovations. • 3.6% introduced product innovations only. • 4.4% process innovations only. • 0.9% had ongoing or abandoned innovation activity.

28. Innovation activity 2004-2006

29. Innovation activity by size & industry(Share of enterprises with innovation activities, %) Large enterprises were most likely to conduct innovation activity

30. Innovation activity in LMEs by ownership(Share of LMEs with innovation activities, %)

31. Who developed innovations?(Share of different forms of conducting innovation, %) Product and process innovations were mostly developed by the enterprise or enterprise group . 76.3% of product innovations and 69.9% of process innovations respectively. A larger share of process innovations were developed by others compared to product innovations.

32. Who developed innovations in LMEs ? By ownership (product innovation,%)

33. Who developed innovations in LMEs ? By ownership (process innovation,%)

34. Innovation expenditures 2006(Share in total expenditure, %) The total expenditure amounted to 582.1 billion RMB, up by 23.1 percent over the previous year, it accounted for 1.86 percent of turnover.

35. Innovation expenditures in LMEs, 2006By ownership

36. Information source for innovation

37. Information source for innovation

38. Effect of innovation

39. Effect of innovation

40. Effect of innovation

41. Effect of innovation in LMEs by Ownership

42. Effect of innovation in LMEs by Ownership

43. Effect of innovation in LMEs by Ownership

44. Share of revenue from product innovation • 12.7 % of revenue in 2006 came from new products. • 6.8% from new to the market. • 5.9% from new to the firm.

45. Share of revenue from product innovations ( by size & degree of novelty)

46. Share of revenue from product innovations in LMEs(by Ownership & degree of novelty)

47. Promoting factor for success of innovation

48. Promoting factor for success of innovation

49. Hampering factors for innovation

50. Hampering factors for innovation