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Xielin Liu, Xiao Wang and Yimei Hu

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Xielin Liu, Xiao Wang and Yimei Hu

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Xielin Liu, Xiao Wang and Yimei Hu

China’s economy has been developing rapidly for decades, and its innovation input and output evolve in a similar pace. Although these particular catching-up phenomena have been explained by researchers from divergent perspectives, the very critical players - the state-owned enterprises (SOEs) have not been studied in depth. Different from prior research largely focusing on the inefficient aspects of SOEs, this chapter introduces a new perspective - innovation ecosystem, and elaborates its implications for analyzing SOEs’ outstanding innovations. In addition, the government’s roles are indicated as well, since the SOEs essentially are Chinese governmental assets.

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Xielin Liu, Xiao Wang and Yimei Hu

Formation of an innovation ecosystem is a complex process, and in such an ecosystem how the players can efficiently collaborate with each other for the overall objectives is a further challenge. This chapter tells a story about State Grid and its project - ultra-high voltage (UHV) power transmission. It reveals how State Grid leveraged key resources and capacities in research, manufacture, design, testing, construction and operations to build up the innovation ecosystem, and how it played as the end-user and shortly drove the divergent players in the ecosystem to be each other’s product user, aiming to break the technical barriers between upstream and downstream enterprises, to strengthen the cooperation on generic technology research, and to create the synergy for innovation.

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Xielin Liu, Xiao Wang and Yimei Hu

When there is no powerful competitor in the market, it is relatively viable for SOEs to foster innovation capabilities and developing leading technologies. But with existence of such competitors, as a latecomer, how can an SOE catch up and excel? Based on retrospection on the failure of TD-SCDMA (3G) which were strongly led by the government and undermined by ineffectual coordination among the technology suppliers, this chapter demonstrates how China Mobile, taking the windows of opportunity in the Chinese telecommunications industry and functioning as a lead user, built up an international innovation ecosystem and furthered cooperation among the players for developing the LTE-TDD (4G) technology and its widespread adoption.

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Xielin Liu, Xiao Wang and Yimei Hu

Mostly, innovations are corporate conduct without governmental lead. Nonetheless, if the innovations are quite critical for addressing a number of important even strategic issues nationwide, while the government is the end-user of the innovations but there is no domestic or overseas enterprise can conduct such innovations according to the governmental anticipations, how can the government drive such innovations? This chapter depicts why the (former) Ministry of Railway spurred the China South Locomotive & Rolling Stock Corporation (the CSR) to engage in developing high-speed train, how it acted as the end-user, led and cooperated with the CSR to build up the comprehensive technical requirements, how it facilitated the innovation ecosystem expediting the players’ collaborations to meet those requirements, and how the CSR consequently grew its capabilities in coordinating and integrating the key elements, cultivating the learning mechanism, and reducing the risks in the ecosystem for more effectual collaborative innovation.

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Xielin Liu, Xiao Wang and Yimei Hu

With powerful governmental support and favorable institutional arrangement, it is relatively easy for an SOE to develop its innovation ecosystem with relevant innovation achievements in China. In contrast, for an SOE originally managed by a local government, without the advantageous resources and strong support from the central government, how can it cultivate the innovation ecosystem and achieve remarkable success? This chapter unveils how China General Nuclear Power Group (the CGN), a locally managed SOE at its early stage, took great effort in collaborating with its partners, how it prompted the evolution of its innovation ecosystem, how it systemically restructured itself for further co-developing technologies and co-creating values, and how it managed to realize the synergy among technological innovation, value creation and dynamic capability development of the ecosystem.

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Xielin Liu, Xiao Wang and Yimei Hu

Theoretically, state-owned enterprises (SOEs) do not have incentives and thus capabilities of radical innovation. Factually, a great number of such innovations by Chinese SOEs in large infrastructure sector emerged in the last decade. The contradiction inspires further exploration on why and how the Chinese SOEs can create such accomplishments, and whether there is any potential limitation in such an approach. Accordingly, this chapter elaborates the five key determinants of the Chinese SOEs’ innovation achievements, proposes the corresponding mechanism, further examines the interplay between the market and government for an emerging economy’s catch-up, and discusses the limitations of the Chinese approach.

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Xielin Liu, Xiao Wang and Yimei Hu

This original book is a unique and original study on how, in the past decade, Chinese state-owned enterprises (SOEs) have achieved technological innovation in the large infrastructure sector. It reveals a ‘new world’ of Chinese innovations, showing that SOEs are willing to innovate and more than capable of doing so. Based on findings from first-hand data and years of in-depth observations, this book shows how the innovation ecosystem perspective incentivizes and facilitates Chinese SOEs’ innovation and highlights entrepreneurial role of the government.