The impact of China's Indigenous innovation strategy on the innovation behaviour of automobile enterprises in China

Abstract

China's indigenous innovation strategy is a government-led innovation strategy in the term of pushing forward the development both in the state-owned enterprises and in the private enterprises. It was codified in the Medium- and Long-Term National Science and Technology development Plan (2006-2020) which was officially announced in 2006. There are several policy tools as the support to the indigenous innovation strategy.  R&D funding  Mega projects sponsored by government  Public procurement  Tax reduction  Standards and patents Automobile industry is normally regarded as the pillar of the economy as it is both labor intensive and capital intensive. It combines a lot of industries like steel industry, chemical industry, electronics industry, etc. Before 1980s, Chinese automobile industry concentrated on the commercial vehicle manufacture. Since 1980 the government started to be aware of the passenger car industry. Because of shortage of capital and technology, joint-venture was regarded as the only choice to get a rapid development for the passenger car industry at the cost of opening the market to the foreign automobile enterprises. This is a case of the famous exchange market for technology strategy, which is generally regarded as an aborted strategy 30 years later even though the Chinese government never officially acknowledges. In the beginning of 2000s, more than half of the Chinese passenger car market was occupied by the China-made foreign brand cars. Before the year of 2000, there are two types of automobile manufactures in China, one is state-owned enterprises, the other is the joint-ventures set up by the state-owned enterprises and their foreign partners most of which were the top automobile enterprises in the like Volkswagen, GM, Toyota, etc. From 2000, the private capital was permitted to enter the automobile industry and became the third type of automobile enterprises in China. Not only in automobile industry, but also in many other industries, the failure of the exchange market for technology happened. Even more is that the advantage of low labor cost is losing under the competition from the emerging countries like India, Vietnam, etc. The Chinese government has the willing to turn from world factory to an innovation-driven country for the economic development in the future. The indigenous innovation strategy is put forward to try to solve those problems. After the indigenous innovation strategy being push forward, the new innovation system is emerging. This thesis is to research on the change of the innovation behavior both in industry level and enterprise level under the impact of the indigenous innovation strategy. Key words: indigenous innovation strategy, IPR strategy, patent applications, automobile industry