China’s Science and Technology Enterprise: Can Government-Lead Efforts Successfully Spur Innovation?

China has begun to see the emergence of a national innovation system.  This has had a significant impact on research and development efforts at the national, provincial, and local levels. Universities and public research institutes have initiated reforms intended to provide direct economic benefit through spinning off high-tech enterprises with promising products and technologies. In recent years high-tech start-ups have played an increasingly significant role in indigenous innovation.  Along with these efforts, national defense-oriented research and development institutions, as well as universities and private enterprises, have also started to develop dual-purpose technologies. Such reform has changed the funding structure not only at the government level, but most significantly at enterprises that have to invest their own money in innovation if they hope to compete domestically or internationally.  A key focus of this paper: an evaluation of the role of the Chinese government as a driver of science and technology development in such key fields as life sciences, nanotechnology, advanced manufacturing, aerospace, clean energy, and supercomputing.  The Chinese Communist Party continues to control the scientific enterprise through a leading group of science, technology, and education at the State Council. The central government has initiated various top-down national programs, including the previously mentioned talent-attracting programs, and has approved the setting up of more than one hundred national high-tech parks. The central government still controls a significant share of the R&D funding, which is often distributed without regard to merit or transparency; its use has all too often been ineffective, inefficient, wasted and abused. This paper takes a critical look at state-led efforts, including the growing emphasis on science and technology parks as innovation hubs. It profiles several major parks, including Suzhou Industrial Park (touted as China’s Silicon Valley) to ascertain the effectiveness of China’s top-down efforts. 

A related focus of this paper is to evaluate the extent to which a culture of creativity in fact exists in China’s research environment. Despite the country’s clear advances in science and technology, many barriers remain. On the one hand, recent reforms have directly impacted the supply, demand, and utilization of scientific talent - China’s potentially most important and strategic asset. China’s vast and growing talent pool, already the world’s largest, has been improving in quality as well. On the other hand, China’s research culture is hampered by its legacy: overly bureaucratized research institutions, and an educational culture that over-emphasizes rote learning and acceptance of authority. China’s leaders acknowledge these limitations, and have taken some limited steps toward educational and other reforms intended to promote critical inquiry and more original thinking. I evaluate the success of these efforts. 

A final focus of this paper is to evaluate the impacts of China’s brain drain, and the effort of the government to convince Chinese overseas scientists and engineers to return. This is a problem that hampers China’s development, since diaspora scientists and engineers, trained in foreign environments, are seen as important contributors to the transformation of China’s research culture (as well as sources of important intellectual property knowledge).