Shaping China’s Innovation Future
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Shaping China’s Innovation Future

University Technology Transfer in Transition

John L. Orcutt and Hong Shen

Shaping China’s Innovation Future employs a thorough analysis of a combination of factors including: the role of law and China’s legal system; economic theory and the development of China’s economy; China’s educational, intellectual property, and financial systems; China’s innovation capacity; and Chinese culture. Though the recommendations on how to improve China’s technology commercialization system are unique to China, the scope of the research makes the conclusions found here applicable to other countries facing similar challenges.
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Chapter 2: Developing a Market-based Innovation System

John L. Orcutt and Hong Shen


The people are happy and we have captured the attention of the world. – Deng Xiaoping (Jan. 1992)1 Employing a Bayh–Dole approach to encourage university innovation and technology transfer is predicated on there being a market-based innovation environment. This chapter chronicles the broad changes that have taken place in China’s innovation system during China’s three decades of economic reform that have transformed China’s former ‘plan-based’ innovation system into one that is largely market based. Despite this progress, legacies from the Mao era continue to impact China and must be accounted for in any innovation system analysis for the country. Before launching into a review of China’s market-based transformation, however, it is useful to begin with a brief overview of markets, their function in a society, and how a Bayh–Dole strategy fits into such a market-based system. 1. BRIEF OVERVIEW OF ‘MARKETS’ AND HOW THEY RELATE TO BAYH–DOLE Scarcity provides the foundation for the field of economics. Most of the goods and services that we consume each day (e.g., food, clothing, and consumer goods) are scarce – meaning that the demand for such goods or services is greater than the supply. Take the simple example of time. Time is a scarce resource for humans relative to the almost infinite ways that we could spend our time in a given day. Because time is finite, while the possible ways of spending it are limitless (or at least almost limitless), we must make choices on how we spend our time. We...

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