China’s Innovation Gap

Abstract

This article highlights innovation, research and development (R&D), and other efforts that are being made to assure China’s progress in the coming future. Chinese leaders understand that innovation is central to their critical interests. Without it, China will never capture the true wealth generated by its dynamic manufacturing sector, improve its competitiveness, or reduce its overall dependence on foreign technology. China has created the educational and research infrastructure needed to embed itself in emerging transnational knowledge networks. Thriving foreign enterprises are likely to have a significant impact on China’s R&D culture. The study reveals that to thrive in the future, China needs to build on its brains, not its brawn. The central government has laid the groundwork for a more innovative economy. A series of medium-to-long-term initiatives are funding science and technology research, reforming education, developing talent, and supporting emerging industries. The results are mixed, but show signs of China’s progress over the past two decades. If Taiwan is any indicator, Chinese with multinational experience are likely to become the technology entrepreneurs of China’s future.