National system of innovation in less developed countries: the case of China. Discuss the key institutions that promote or fail to promote innovation and development in China.
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EXECUTIVE SUMMARY
The purpose of this piece of work is to discuss the concept and importance of innovation in an economy. The economy is chosen as China. The report is structured basically into three sections. In the first section, the concept of innovation is defined and discussed. In the second section, key indicators of innovation in China are discussed from the perspective of science and technology, education, government policies, and public-private contributions. In the third and final section role of innovation in Chinese economic growth is discussed.
INTRODUCTION
Innovation is all over the place, in the globe of commodities and technologies definitely, but as well in the dominion of subjects. Notably innovation is talked about in the scientific and technical literature, in social sciences subjects such as history, sociology, management and economics, and more importantly in the areas of humanities and arts. Innovation is as well an essential thought in the trendy made-up, in the media, in public course of action and is fraction of everybody’s expressions. In brief affirmed, innovation has developed into the symbol of the contemporary the social order, a cure-all for determining various tribulations, and an occurrence to be considered. In fact we are living in a world which is characterised by a fascinating and expedition for innovation (Nowotny, 2008). The pursuit for innovation is so strapping that various set off so far as to recommend that drugs such as Ritalin and Adderall, be utilised to care for psychiatric and neurological ailments, ought to be prescribed to the healthy as a cognitive augmentation skill for advancing the innovative aptitudes of our genus (Greely et al., 2008).
Innovation is largely defined as “an idea, a product or process, system or device that is supposed to be pioneering to a person, a group of populace or organisations, an industrial sector or society at large” (Rogers, 1995, p. 276). Innovation may well be classified into three classes namely product innovation, process innovation and organizational innovation (Vakola, 2000). Innovation is one of the most decisive competitive benefits of business organisations (Chapman and Hyland, 2004; Vakola, 2000). Vakola (2000) in this framework puts forward that innovation is in fact an intangible resource or a sort of resources for the organization to hold as a competitive benefit.
KEY ISSUES/INDICATORS OF INNOVATION IN CHINA
Science and Technology
The research approach and policy of China is stalwartly needs-driven in that in the country science and technology is considered as a multi-use device for fighting poverty, epidemics and environmental concerns aiming to meet up the country’s rising demand for raw materials; protecting China’s future competitiveness and growth and moreover becoming conscious of the government’s political aspirations. Notably here that the overarching ambition of China’s long-standing science and technology plan is to uphold an elevated rate of economic growth and advancement at the same time as offering way out to social and environmental challenges. Power, water resources, and the environmental issues have had been well at the top in the priority list so far as science and technology advancement of the country is concerned (Mu, 2007). The country has high focus on innovation and therefore science and technology is tended towards making innovations as regards power, water resources, and the environmental issues. In this framework, endeavours to boost China’s innovative power have had been determined by a well-built conviction that through bestowing an adequate amount of money to science and technology, China will create innovative and competitive environment.
The most recent long-standing plan for science and technology replicates China’s fortitude both to prevail over rising home social and environmental tribulations all the way through innovation and advancement in science and technology and to turn out to be a global leader in innovation. The plan presents no deep-seated going away from former strategies and carries on to describe policymaking through a strapping credence that innovation might be decreed or maneuvered by the regime. The plan relies a great deal both on supply-side rule for research and development and on a technology-driven vision of innovation, rather than embarking upon less material and more composite issues in the forms of shortfalls in social resources, institution-building, and creating an innovation-friendly upbringing (Serger and Breidne, 2007). These suggest that science and technology related plan and policy is certainly innovation driven in various fields in China, but lacking in social resources building, and creating an innovation-friendly upbringing making the mission very much challenging and therefore a lot needs to be done in the field of advancing science and technology for realizing the ambitious dream of creating innovative and competitive background.
Education
So far as innovation is concerned, there are there institutional actors namely industry, research organizations, and government, and these three actors take up main positions in every national innovation system (Fujita and Hill 2004). This framework moreover comprises a country’s intellectual property protection method, its universities and its research organisations. More clearly, it as well possibly will take account of numerous additional subsystems and procedures in the forms of rules of competition and a country’s fiscal and economic policies. Even as this conceptualization is functional in recognizing the linked agents and institutions, it could not be utterly appropriate to developing countries such as China due to their comparatively lagging position from the technology border line in a globalised environment. A more rational method would be to look into a broader classification of education and its contribution in innovation.
In the case of China formerly the part of education, and particularly higher education was restrained by the above specified framework to that of education above all. Subsequent to the liberalisation and globalisation initiatives in the country, university and research institutions were put to privation and this reform policy was termed as fine-tuning of colleges and universities on the pattern of Soviet model (Simon and Cao 2009, p. 112). Targeted to building up techno-centric specialized education to prop up countrywide growth strategies, the adjustments recombined universities into innovative groupings in relation to their orders in the forms of inclusive universities, typical universities, polytechnic universities, more dedicated technical institutes, and medical universities (Simon and Cao 2009). Consequently, the operation of higher education was moved from just teaching to research, which determine the circumstances for ever-widening gap amid teaching and research. The rearrangement of spheres, moreover, broke the relations amid essential research, practical research, and investigational or innovative development.
Even though the nationalized programs have augmented the financial support and research hardware of first-rate universities, their result on scholastic research or innovation is just reasonable by and large. Even privileged universities that are division of a focused innovation agenda have not experienced a class development proportionate to the quantitative growth. They as well have still to authentically pursue the representation of promoting scientific and resourceful flair and cheering exclusive innovation (Cao 2009). The accessibility of innovative and industrious staff, and not the accessibility of financial support, is expected to be a main restraint in upholding class essential research in the universities. The additional improvement of China’s state innovation system will necessitate taking steps to put up essential research competence in chosen universities, boost the science and technology researcher group, and sponsor strapping courses of sharing knowledge. Apart from offering more financial support to innovative research, educational research ought to take account of the growth of a structure of innovation oriented higher education and management, to assist students and researchers to find out, investigate, and put together way out to challenging situations in terms of innovation. Public support organisations such as the National Natural Science Foundation, may work wonder instituting innovative research funding programs to offer them opportunities to conduct profound researches and come out with innovations that lead the country in various business field.
Government Policies
The advancement of non-linear innovation premises specially systems of innovation (SI) method has inspired the differentiation of innovation policy devices, and demand-side innovation policies (DSIPs) began to represent rising awareness for the reason that they might successfully resolve collapses of system particularly as regards user-producer connections. In the midst of different DSIP devices, innovation oriented public procurement (IOPP) is regarded as enormously compelling in view of the fact that this method facilitates the country and the government in the country to take action as front users to pull innovation progression with that of accomplishing societal duties. when it comes to China, it is found that that IOPP might be even more shot in the arm considering the immensity of home marketplaces, the catching-up purpose as a developing country and the vital roles played by different ranks of governments (OECD, 2008). for case in point, in 2006, government in China pronounced overtly in the National S&T Program (2006-2020) to make use of IOPP to encourage endogenous innovation, persuing which numerous steps have been taken at together national and regional heights. The IOPP policy taken on by Chinese government relies a great deal on top-down approach, and the central government and linked ministries play an especially significant role of building the device in a methodical method. So far perhaps no report focused on tangible IOPP cases have been available, and therefore downstream effects of the IOPP device are yet in great requirement to be looked into. These distinctiveness are quite dissimilar from that of EU countries, which represents using of bottom-up method, such as making out most excellent practice and drawing lessons (Chen and Lao, 2010). The point is that even though China has accomplished a lot in IOPP ever since the launch of Program (2006-2020) promoting innovation in the country, there are quite a few hindrances holding back the advancement of this policy tool. To begin with the certificating of innovative products necessitates more specific system and principles, which appears to be the most vital subject as regards the plan of national innovation catalogues. On the other hand, synchronization flanked by diverse governmental bodies appears not even enough, and therefore downstream results of IOPP policies might not be completely traced and monitored. Last but not least, the surveillance of Chinese government IOPP practices, regional protectionism is an ordinary predicament with every one of the areas, whose IOPP rules never get enterprises from other areas concerned, only after solving these issues government policy can smooth the progress of innovation in the country having IOPP approach.
Public/ Private Contribution
In the company of more and more concentrated inputs of research and development and additional resources, Chinese firms have accounted extraordinary accomplishments in the relocation, incorporation, and creation of knowledge and innovation, in the midst of them a huge boost in manufacturing and in its scientific erudition, a go up in the aptitude to innovate at domestically, and a go up in the knowledge power of the general economic system of the country (Zhang, 2006). China’s growth of its manufacturing competence has had been held up by two intimately connected drifts. Firstly, due to the growing of definite technologies and the corresponding augmentation of customer markets, numerous manufacturing products have turned out to be unvarying commodities. Next, the very procedure of commodification has been held up by the codifying of the linked technologies, a few entrenched in paraphernalia, others accessible from dealers. These transformations have created it uncomplicated to take up innovative production systems and fast accomplish a high rank of effectiveness (Yusuf and Nabeshima 2007). Certainly the private efforts and in some cases efforts of public and private partnerships are pioneering the country more and more innovative. So as to advancement is to a certain extent echoed by the razor-sharp addition in the figure of patents approved to locally financially supported Chinese firms. More importantly, the general constitution of the Chinese economy has developed into more and more knowledge and innovation oriented industrial sectors in the country, but this developing economy has to go a long way in this direction.
INNOVATION AND ECONOMIC DEVELOPMENT IN CHINA
The second largest and the fastest growing economy of the world China needs to maintain it economic growth in future too, where the country’s policy makers are enthusiastic to boost up the part of innovation in the Chinese economic growth so that the economy of the country would in due course be changed into a knowledge-oriented one which is less reliant upon outside markets (Schaaper 2009, Zhang et al. 2009). Understandbly, this target is evidently visualized in the country’s National Science and Technology Development (2006-2020) Program declared in 2006. Nevertheless, knowledge regarding China’s innovation competence and prospect is very restricted. The question arises as to what degree innovation played a role in China’s economic growth over the decades and years. Moreover, what are the determinants of innovation in China’s provincial economies, and how might the competence of innovation be made better. These are a few of the queries that are to be answered. A comprehensive study of these issues is imperative for policy creation and reformation and consequently the change of China’s economic growth model en route for a sustainable economic model. The current obtainable texts draw our attention towards the input of total factor productivity (TFP) changes to economic development in China through the route of innovation, where innovation is considered as fraction of the TFP input or the enduring of economic development which is not described by changes in factor contributions (Zhang et al. 2009). However, the current and future contribution of innovation in economic development and sustainability of China requires to be examined through other suitable methods and approaches.
CONCLUSION AND RECOMMENDATIONS
Innovation is an intangible resource or a sort of resources for the organization to hold as a competitive benefit. Innovation may well be classified into three classes namely product innovation, process innovation and organizational innovation. Innovation has developed into the symbol of the contemporary the social order, a cure-all for determining various tribulations, and an occurrence to be considered. In fact we are living in a world which is characterised by a fascinating and expedition for innovation. China has high focus on innovation and therefore science and technology is tended towards making innovations as regards power, water resources, and the environmental issues. In this framework, endeavours to boost China’s innovative power have had been determined by a well-built conviction that through bestowing an adequate amount of money to science and technology, China will create innovative and competitive environment.
Science and technology related plan and policy is certainly innovation driven in various fields in China , but lacking in social resources building, and creating an innovation-friendly upbringing making the mission very much challenging and therefore a lot needs to be done in the field of advancing science and technology for realizing the ambitious dream of creating innovative and competitive background. Apart from offering more financial support to innovative research, educational research ought to take account of the growth of a structure of innovation oriented higher education and management, to assist students and researchers to find out, investigate, and put together way out to challenging situations in terms of innovation. Public support organisations such as the National Natural Science Foundation, may work wonder instituting innovative research funding programs to offer them opportunities to conduct profound researches and come out with innovations that lead the country in various business field. The surveillance of Chinese government IOPP practices, regional protectionism is an ordinary predicament with every one of the areas, whose IOPP rules never get enterprises from other areas concerned, only after solving these issues government policy can smooth the progress of innovation in the country having IOPP approach. Certainly the private efforts and in some cases efforts of public and private partnerships are pioneering the country more and more innovative. The general constitution of the Chinese economy has developed into more and more knowledge and innovation oriented industrial sectors in the country, but this developing economy has to go a long way in this direction.
China is the second largest and the fastest growing economy of the world and needs to maintain it economic growth in future too, where the country’s policy makers are enthusiastic to boost up the part of innovation in the Chinese economic growth so that the economy of the country would in due course be changed into a knowledge-oriented one which is less reliant upon outside markets. Innovation is considered as fraction of the TFP input or the enduring of economic development which is not described by changes in factor contributions, nevertheless, the current and future contribution of innovation in economic development and sustainability of China requires to be examined through other suitable methods and approaches.
REFERENCES
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Web sources
OECD (2008), “OECD Reviews of Innovation Policy – China”. [Online] accessed on 8th Aug., 2015 from http://www.oecd.org/document/44/0,3746,en_2649_34273_41204780_1_1_1_1,00.html
Cao, Cong. (2009), “Chinese applaud dismissal of education minister”. [Online] accessed on 8th Aug., 2015 from http://www.upiasia.com/Society_Culture/2009/11/03/chinese_applaud_dismissal_of_education_minister/1510/)