The approach to and challenges in measuring innovation in China

Abstract

In China and elsewhere, innovation features strongly in government policy as a key driver of economic development. Being able to measure innovation performance is therefore important. This paper analyses China’s approach to measuring the country’s innovation performance. In doing so and using documentary analysis, it evaluates the conceptualisation and data collection that underpin and support that measurement. The findings show that China focuses on a science and technology approach to measuring innovation. The weaknesses of this approach are identified: first, the conceptual scope is too narrow due to its exclusion of non-technological innovation; second, relatedly, data gathering is limited quantitatively and qualitatively in its coverage of types of innovation; and, third, the sample population is biased, acting to excluding a significant number of firms and employees. These weaknesses undermine understanding of innovation performance in China. With this analysis, this paper provides the first evaluation of China’s innovation conceptualization and measurement and, based on the findings, provides suggestions to address these weaknesses and improve the measurement of innovation performance and which have applicability beyond China. For China and other countries such as those which are members of the OECD and EU, the evidence provided in this paper suggest that there is a pressing need to adopt this broader policy approach and support it through the development of appropriate measures and data collection.