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Transcript of Xiaolan Fu Oxford University DFID-ESRC Growth Research Programme Meeting Overseas Development...
Xiaolan FuOxford University
DFID-ESRC Growth Research Programme Meeting
Overseas Development Institute, London, July 17th, 2015
Innovation & long term growthPer capita income relative to the US, 1960-2008
•Singapore•Japan•S Korea•Taiwan•Hong Kong
•Eq. Guinea (resource)•Puerto Rico (resource)
China’s Path to innovation (‘How’ )
The evolution of China’s path to innovation: foreign vs indigenous innovation
System building: Open national innovation system
Achieving: Capabilities, incentives, institutions
Conclusions: ONIS & Innovation diagnosis
Policy implications for other countries
The Evolution of
China’s Path to Innovation
Number of triad patents
Source: Fu (2015)OECD(2014)
Innovation performance: international comparison
Source: Innovation score estimated by EU (2013)
From S&T to innovation policyLessons from China
1978: S&T are productive forces
1985: S&T system reforms
-Marketisation of the S&T system (planning--market)
-Focus on serving economic development (defence –eco)
-Acquisition of foreign technology
(Imports: aid, debt; FDI: market for tech. strategy)
1995: Acceleration of S&T development
-Priority of resource allocation to high-tech industries
2006: Strengthen indigenous innovation
China’s imports of technology
China’s Inward & Outward FDI
Source: NBS
Number of Chinese students going abroad and returning to China, 1990 to 2014
Source: NBS
Fast growth in innovation in China
Source: Fu (2015)OECD (2014)
Source: Fu and Zhang (2011)
Solar PV industries in China and India
Foreign vs indigenous innovationEvidence from large firm level data
Different roles of foreign vs indigenous innovation in different industries
The dual role of Chinese universities: knowledge creation and assist diffusion and absorption
The role of foreign universities & international collaboration for radical innovation
Open Innovation a response to risks and constraints (differ by firms of different ownership)
System Building
The open national innovation system (ONIS)
in the age of globalisation:
Openness at both national and firm level
National innovation system framework
An Open National Innovation System(ONIS)
Source: Fu (2015)
NIS
China’s experiences suggest catch-up through:
ONISEmbedding NIS into the global innovation
systemCreating linkages: - Trade - FDI - Human mobility - University – industry linkage - Public-private partnership & the role of the state
Firms can map out their innovation ecosystem by focusing on industry and including vertical and horizontal linkages
Open National Innovation SystemFoster indigenous innovation while opening up to
external knowledge, resources and markets.
Dual knowledge sources and uses a dynamic combination that evolves over time.
Multiple driving forces: the state, the private sector and the MNEs. Uses a combination of market and state for different functions and at different stages of innovation.
Multiple knowledge diffusion channels. Uses a combination of knowledge sourcing channels, which is again dynamic.
The relevance of ONIS for the rise of NIEs
Japan (MNEs)
South Korea (Foreign technical assistance and returnees)
Taiwan (Foreign technical assistance and returnees)
Achieving high performance:
Capabilities, incentives and institutions
National Innovation Performance
NIPs
Source: Fu (2015) extension based on OECD (1987) & Lall (1992)
National Innovation Performances
NIPs
Openness
(global resources
& knowledg
e)
Source: Fu (2015) modification & extension based on Lall (1992)
Problems in achievingCapabilities: quality, creativeness
Incentives: macro, micro
Institutions
Interplay and coordination
Higher degree of openness
Impact: environment & inclusiveness
International collaboration on innovation
Conclusions
Conclusions & implications
China’s experiences suggest upgrading using an ONIS
Uses indigenous innovation and foreign technology transfer at all stages of development, though with different emphasis
For middle income countries’, more targeted, proactive international knowledge sourcing : OFDI, highly skilled migrants, international collaboration, foreign universities
Different roles of the state and market at different parts of the innovation chain
The path to an innovative nation
China’s experiences also suggest that in addition to investment & openness, incentives & Institutions are also very
important.
Hence suggesting
Innovation diagnosis as a policy tool
Innovation Diagnosis as a policy tool
Innovation Performanc
e
Building ONIS(Private- pubic-state &
linkages)
Wider political, economic & management policies
China: Current status & Way forward
Moving towards the right direction; but details are the monsters
Future: actions in 3 dimensions
System and capabilities building - resources, skills, linkages - Solutions: invest, talents, open innovation, M&A, policySet incentives right - Financial and non-financial incentives, monitoringInstitutions development -IPR, incubators/sci parks, regulations, SMEs /high tech
IPOs
Lessons for other countries
South-South technology transfer
How to participate global value chains & role of EPZs
Orientations to sustainability in technology and upgrading strategy
Consequences on inequality and inclusive innovation
Thank you!
Source: Fu (2015)
Share of processing exports in China’s total exports, by technology level (%)
Source: Ma and Van Assche (2010)
Composition of major export products from China in the Triad markets
14.88
56.4
11.98
16.74
Resource-based Low-tech Medium-tech High-tech
Structural change & industry upgrading
Processing trade: 50%+ total trade : 90%+ high-tech exp
R&D composition by funding sources: 2003-2011
China’s acquisition of foreign technology in comparison Brazil China India
Trade as % of GDP 1980 22 21 15 2007 27 76 46 Merchandise imports % of GDP 1980 9.8 … 7.5 2007 9.6 29.8 18.4 Manufactured Imports % of merchandise imports
1980 41 … 39 2007 64 68 46 Average Tariffs ( in %) 1990-1992 Average simple tariff Average weighted tariff
25.1 26.7
42.9 40.6
81.8 83.0
2006 Average simple tariffs Average weighted tariffs
12.3
6.8
8.9 5.1
17.0 13.8
Average Gross FDI/GDP 2000-2005
3.4 3.2 0.9
Royalty and license fee payments ($ million) 1990 54 0 72 2007 2,259 8,192 949 As % of GDP 1.72 2.56 0.80 Tertiary Students Studying Abroad 2007* 21,556 421,128 153,312 As percentage of students studying abroad 0.77 15.03 5.47 As percentage of tertiary students in country 0.4 1.9 1.1
Acquiring foreign knowledge:Imports,FDILicensingForeign edu.Diaspora
Policies: local content req. Training req.Attract HSR
Source: Dahlman, 2010