Chinese Innovative Capacity—State of the Art of the Leading Edge

Abstract

To date technological catch-up by emerging economies such as China has been largely sequential, imitative, and achieved through established networks. However, attempts to achieve frontier technologies such as Industry 4.0 present significant new challenges impacting knowledge sources, knowledge types, transfer processes, and associated risks. This paper argues that to achieve this new level, Chinese firms will need to vary and widen the knowledge sources they utilize as they seek to develop both predictive capabilities (evaluating new technologies), and combinative capabilities (integrating them with the necessary skills and resources). Despite the deteriorating international business environment that it faces, China appears the best placed of all the major emerging economies to achieve this transformation.