Fifteen Eighty Four

Academic perspectives from Cambridge University Press


How is China getting innovative? A perspective of political economy

Yutao Sun, Cong Cao

China has become not only the second largest economy in the world but also a juggernaut in science, technology, and innovation (STI). The publication of our book, The Political Economy of Science, Technology, and Innovation in China, is therefore especially timely, as it seeks to achieve an understanding of China’s development in STI from an institutional or a political economy perspective.

Indeed, various quantitative measures – from rapidly rising expenditure on research and development (R&D), a larger and high-quality talent pool, to impressive scientific publication and patenting statistics – indicate that China has been on its rapidly rising trajectory to becoming a formidable player, if not a superpower yet, in STI. So, the question is how China is getting innovative? We were not that satisfied with the existing literature as STI are more than a market or an enterprise’s behavior in Joseph Schumpeter’s sense but involve politics, institutions, and the role of the state. Indeed, behind China’s innovation is the undeniable role, or the “visible hand” of the Chinese state.

The book reflects our changing and supposedly better understanding of the evolution of China’s innovation policies have evolved. In fact, China has shifted its science and technology (S&T) and industrial policy-centered innovation strategy to pursuing a more coordinated innovation-oriented economic development by giving increasing attention to a portfolio of policies that also include financial, tax, fiscal and other measures. There has been a gradual departure from the pattern in which innovation policies were formulated by one single government agency, therefore steering China to a different and probably more promising innovation path.

Taking the policy network approach, the book finds that the formal policy network for innovation has not only sustained through the intervention of policy agenda but also become self-organized because of policy network’s nature of power concentration and heterogeneity dependence. The presence of such mixed mechanisms in the evolution of China’s innovation policy network differs from the findings from industrialized countries where self-organization plays a central role. The findings advance our theoretical understanding of the evolution of innovation policy network and have implications for policymaking in emerging economies.

China’s rapid growth of R&D expenditure has attracted wide attention from the international scientific and policy communities. The book tries to open the “black box” of China’s central R&D expenditure based on an analytical framework of “funders–performers”. The findings are helpful for comprehending China’s S&T budgeting process and spending patterns as well as funding structure. Specifically, the book solves a major puzzle regarding R&D expenditure at China’s central government – who spends how much on what. While becoming decentralized and diversified, the allocation of the central R&D expenditure has posed new challenges for China’s R&D budget management. For example, much of the public money has financed scientific research – basic and applied, but the nation’s overall R&D funding has been oriented toward development research, thus pointing to a possibility that China’s efforts to build an enterprise-centered innovation system may lack a solid scientific foundation.

The book proposes a transnational migration matrix of the academics to clarify the dynamic mechanism of achieving an academic “brain gain” at the high end and applies the matrix to the study of an eminent group of young Chinese scientists. The results show that those whose last employers’ academic ranking is among the world’s Top 100 had stronger willingness to return to China, and the negative effect of academic ranking decreases with time passing. Compared to scholars with an overseas tenure-track position, tenured or permanent academics tended to stay overseas, and their rate of staying abroad increased with ages. Therefore, China’s talent-attracting programs only have partially succeeded in bringing back the young scientists at the high end.

The book also extends theoretical and empirical interests in understanding the role of the Chinese government through its organization of mission-oriented mega-R&D programs (MMRDs). An exploitative R&D program with a clear and singular technical goal whose performer and end-user are public actors entails government to adopt MMRDs, while in doing so government should take into consideration such factors as economic efficiency, national security, and public interests. In the case of China, the state-led innovation model favors to concentrate resources on initiating MMRDs with varying effectiveness.

Our book contributes to the literature of China’s STI studies from the perspective of political economy as the first of its kind to our knowledge. It is data-driven and evidence-based by introducing new sets of data and analyzing them to provide new and insightful evidence for exploring structures and operations of the state. As the coordination and cooperation between different government agencies are challenging all countries in the world, the empirical findings from the Chinese practice are of enlightened values to the global STI governance.

Yutao Sun is a professor at the School of Economics and Management, Dalian University of Technology, China, and a former Marie Curie Fellow at the University of Nottingham, the UK. He has published in international journals including Science and Research Policy. He is the author of China and Global Value Chains: Globalization and the Information and Communications Technology Sector (co-authored, 2018).

Cong Cao is a professor at Nottingham University Business School China, University of Nottingham Ningbo China. His most recent books include GMO China: How Global Debates Transformed China’s Agricultural Biotechnology Policies (2018) and Innovation in China: Challenging the Global Science and Technology System (co-authored, 2018).

The Political Economy of Science, Technology, and Innovation in China by Yutao Sun and Cong Cao

About The Authors

Yutao Sun

Yutao Sun is a Professor at the School of Economics and Management, Dalian University of Technology, China, and a former Marie Curie Fellow at the University of Nottingham, UK. He ...

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Cong Cao

Cong Cao is a Professor at Nottingham University Business School China, University of Nottingham Ningbo China. His most recent books include GMO China: How Global Debates Transform...

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