China's Path to Innovation

Over the past three decades, China has experienced rapid economic growth and a fascinating transformation of its industry. However, much of this success is the result of industrial imitation and China's continuing success now relies heavily on its ability to strengthen its indigenous innovation capability. In this book, Xiaolan Fu investigates how China can develop a strategy of compressed development to emerge as a leading innovative nation. The book draws on quantitative and qualitative research that includes cross-country, cross-province and cross-firm analysis. Large multi-level panel datasets, unique survey databases, and in-depth industry case studies are explored. Different theoretical approaches are also used to examine the motivations, obstacles and consequences of China's innovation with a wider discussion around what other countries can learn from China's experience. This book will appeal to scholars and policy-makers working in fields such as innovation policy, technology management, development and international economics and China studies. 'Professor Fu has integrated a variety of scholarly articles from the firm level to the industry level to the national policy level, to produce the first comprehensive treatment of Chinese innovation activities from an open innovation perspective. Her masterful book points the way towards 'open innovation with Chinese characteristics'.' Henry Chesbrough, Haas School of Business, University of California, Berkeley, and author of Open Innovation 'That China is the workshop of the world is now a 'given'. Professor Fu has invested years in the search for clues to how the goods in the China workshop have moved from being 'assembled in China' through 'invented in China' to 'invented and commercialised in a complex open engagement with the world's capital and skilled labour'. This book is the authoritative result and is essential reading.' Barbara Harriss-White, Emeritus Professor, University of Oxford, and co-editor of China-India: Pathways of Economic and Social Development 'This fascinating book by a leading Chinese scholar is hugely informative of the challenges China faces in its quest to become a major global innovative economy. It populates a knowledge gap, challenges our conventional wisdom and provides important insights for corporate and government policy makers alike.' Raphael Kaplinsky, The Open University 'China achieved an average annual growth rate of 9.8% for 35 years, made possible only by continuous technological innovations, after the transition from a planning economy to a market economy in 1979. Such a long period of extraordinary growth was unprecedented in human history. This book carefully studies China's open national innovation system at national, regional and firm levels. It deciphers how China was able to achieve such a remarkable success in the past, examines how China may sustain dynamic growth in the future and suggests what other countries can learn from China's success. The book is a must-read for anyone who wants to understand Chinese economic development.' Justin Yifu Lin, Peking University and former Chief Economist, The World Bank 'Finally, we have an analytical volume that combines economic theory, international experience and China's socio-economic conditions to formulate a most credible strategy to greatly strengthen China's capacity to innovate. Xiaolan Fu's 'Open National Innovation System' approach deserves careful study by other developing countries because it is also applicable to them.' Wing Woo, University of California, Davis and President, Jeffrey Cheah Institute on Southeast Asia 'A masterpiece on comparative Chinese innovation studies.' Calestous Juma, Harvard UniversityPreface; List of abbreviations; 1. Introduction; 2. Innovation in China since the reforms: an overview; Part I. International Knowledge Transfer and Technological Take-off: 3. Foreign direct investment, absorptive capacity and innovation in Chinese regions; 4. Processing trade, FDI and international competitiveness of the Chinese high-technology industries; 5. Indigenous and foreign innovation efforts and technological upgrading in China; Part II. Development of Indigenous Innovation Capacity and Catch-up; 6. The role of state policy in shaping innovation practices: the case of open innovation in China; 7. Open innovation as a response to constraints and resources; 8. The dual role of universities in industrial innovation: comparing China and the UK; 9. Technological learning, tacit knowledge acquisition and industrial upgrading: the Chinese optical fibre and cable industry; 10. Leapfrogging in green technology: the solar-PV industry in China and India; Part III. Towards a Global Innovation Leader: 11. Internationalisation, reverse learning and capabilities upgrading: the case of Huawei and ZTE; 12. International collaboration and radical innovation; 13. Innovation efficiency and the cross-country gaps in innovation; 14. Incentives, institutions and national innovation performances; 15. Conclusions: open national innovation system and China's path to innovation; References; Index.