Building Domestic Capabilities in a Global Setting
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Edited by Bengt-Åke Lundvall, K. J. Joseph, Cristina Chaminade and Jan Vang
Chapter 5: National Innovation Systems in Developing Countries: The Chinese National Innovation System in Transition
Xielin Liu 5.1 Introduction The organization and effectiveness of innovation systems in transitional economies has become a very popular research topic (Lundvall et al., 2006). This is especially true since developing countries have become increasingly important in the international community, and China, boasting one of the world’s fastest growing economies, is certainly no exception. After 30 years of opening up and reform, China has already established a unique economic and enterprise system, which is very effective for mobilizing resources for economic performance; however, it seems that the rate of development of the country’s innovation capability has not increased as quickly. Therefore, the question is how to face the challenge of making China’s innovation system more productive and integrative for the future welfare of the country. There are many papers and reports on China’s innovation system (Liu and White, 2001; Motohashi and Yun, 2007; OECD, 2008; Gu and Lundvall, 2006). The recent OECD review on the Chinese innovation policy (OECD, 2008) suggests that China needs more bottom-up decision making, the private sector should be given a more important role in innovation, and there should be more coordination among policy making and implementation agencies to promote innovation. According to the OECD’s recommendation, the Chinese system must move towards a more open and market-based innovation system. However, in order to introduce innovation in China more effectively and pave a road of development leading to further innovation, many changes must be made. This chapter investigates the role of the government in supporting such transition....
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