From Provider to Coordinator: The Role of Local Government in Innovation Development

OECD reports that, although the Chinese government has rapidly increased investment in innovation since 2000, it still encounters the difficulty of low production and humble innovation performance.. By using focus group, in-depth interview and survey research methods, and by referring to innovation theory and public management theory, this study stresses that, during the promotional behaviors of innovation development, local governments in the Pearl River delta region have formed policies to resolve market failure. In particular, local governments have favorred constructing regional innovation systems, providing innovation environment and infrastructure, investing innovation elements, and solving ‘preliminary system failure’. However, we found that there exist problems of ‘adequate components whereas low integration between structures and components within regional innovation system, low openness of innovation system, each department doing work in its each way, incoordination of innovation policies etc.. As a result, there is a lack of effective information exchange and clear division of work and collaboration between enterprises, R&D institutes, science and technology service institutes, being unable to solve ‘advanced system failure’. At the same time, in a case study of Longgang district, Shenzhen, this research analyzes the process and experience of how local governments have transformed their role from ‘providers’ to ‘coordinators’ to enable the evolution from regional innovation systems to innovation ecosystems.