Asia’s Innovation Systems in Transition

Asia’s Innovation Systems in Transition

New Horizons in the Economics of Innovation series

Edited by Bengt-Åke Lundvall, Patarapong Intarakumnerd and Jan Vang

The success of Asian economies (first Japan, then Taiwan, South Korea, Singapore, Hong Kong and, more recently, China and India) has made it tempting to look for ‘an Asian model of development’. However, the strength of Asian development lies less in strategies that reproduce successful national systems of innovation and more in the capacity for institutional change to open up new development trajectories with greater emphasis on knowledge and learning. The select group of contributors demonstrate that although there are important differences among Asian countries in terms of institutional set-ups supporting innovation, government policies and industrial structures, they share common transitional processes to cope with the globalizing learning economy.

Chapter 12: Policy Learning as a Key Process in the Transformation of the Chinese Innovation Systems

Shulin Gu and Bengt-Åke Lundvall

Subjects: economics and finance, economics of innovation, innovation and technology, economics of innovation


Shulin Gu and Bengt-Åke Lundvall In this chapter we develop the idea of innovation systems (IS) and link it to policy learning in a developmental context with special reference to the transformation of China’s innovation system. We emphasize the evolutionary and systemic foundation of the innovation system’s approach and the requirements for an adaptive innovation policy. We present the transformation of China’s innovation system from the perspective of policy learning and indicate what further lessons remain to be learnt. INNOVATION SYSTEMS, ECONOMIC DEVELOPMENT AND POLICY LEARNING Innovation systems may be defined as sets of institutions, which jointly and individually contribute to the generation, diffusion and use of knowledge for the development, diffusion and application of new technologies. A major point with the system’s perspective is that the innovation performance of an economy depends not only on how the individual institutions, such as firms, research institutes and universities, perform in isolation, but especially on how they interact with each other in connection with collective knowledge creation and use (Metcalfe, 1995; Smith, 1996; OECD, 1999a: 24). The broader definition of innovation systems includes social institutions, macroeconomic regulation, financial systems, education and communication infrastructures and market conditions as far as these have a major impact on innovation. The set of institutions that constitute an innovation system also provides the more or less broad framework in which governments play their role in formulating and implementing policies. As far as the wider set of institutions have a critical impact on...

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