From Imitation to InnovationFrom Imitation to Innovation · From Imitation to InnovationFrom...

From Imitation to InnovationFrom Imitation to Innovation：：From Imitation to InnovationFrom Imitation to Innovation：：A Strategic Adjustment in China’s S&T developmentA Strategic Adjustment in China’s S&T development

Fang XinFang XinMember of Standing Committee, NPC, ChinaMember of Standing Committee, NPC, Chinag , ,g , ,

Member of the Presidium,CASMember of the Presidium,CAS(fangxin@cashq ac cn(fangxin@cashq ac cn))

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(fangxin@cashq.ac.cn(fangxin@cashq.ac.cn))

Si f f 2004 C i ’Since the latter half of 2004, China’s top leaders have given higher priority to the issue of national capacity building for S&T innovation.S&T innovation.This strategic transition from imitation t i ti i l f d i thto innovation is also found in the National Long & Medium-term Plan for S&T Development.

ContentContent..

S&T innovation capacity as a S&T innovation capacity as a strategic resource for strategic resource for

sustainable developmentsustainable developmentsustainable developmentsustainable development

Major measures adopted for Major measures adopted for th t t i Adj t tth t t i Adj t tthe strategic Adjustmentthe strategic Adjustment

Over the past three decades, China’s economy has witnessed rapid growth at an average annual rate of 9.6%, and by 2004, its per capita GDPof 9.6%, and by 2004, its per capita GDP surpassed US$1,000, marking the beginning of th t k ff t f Chi ’ i d t i li tithe take-off stage of China’s industrialization.

In line with national conditions, however, China cannot follow completely the traditional route ofcompletely the traditional route of industrialization taken by developed countries.

Instead, a brand-new road should beInstead, a brand new road should be explored.

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On one hand, one basic problemOn one hand, one basic problem facing China is its huge population. Chi t i t i it lChina must maintain its annual economic growth at above 7% in the coming 15-20 years to solve the unemployment problem of the u e p oy e t p ob e o t ewhole country in general, and h ndreds of millions of s rpl shundreds of millions of surplus rural labors in particular.

On the other hand China is coming underOn the other hand, China is coming under stringent and urgent pressure from the bottleneck in key natural resources and environmental problems.

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In 2003, for example, China’s GDP accounted for 4% , p ,of the world total, while its national consumption of crude oil, coal, iron ore, steel products and cementpmade up 7.4%, 31%, 30%, 27% and 40% of the world total, respectively.

90%100%

60%70%80%90%

31% 30% 27%

40%

30%40%50%60%

7.40%

0%10%20%30%

0%Crude Oil Coal Iron Ore Steel Products Cement

World Total China's Consumption

The traditional mode of economic growthThe traditional mode of economic growth has come to a deadlock, and well-balanced and sustainable development is the only

t f Chiway out for China.

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From an international perspective and in the context of the knowledge-and in the context of the knowledge-based economy, S&T innovation capacity increasingly determines thecapacity increasingly determines the core competitiveness of a country.

It is of great significance to rely on innovation in order to get prepared g p pagainst the global financial crisis, raise the competitiveness ofraise the competitiveness of manufacturing industry, and promote a fast and steady economicpromote a fast and steady economic growth.

Although China now boasts a relatively complete S & T f k d i S&T f itS & T framework and massive S&T forces, its overall S&T capability and level are still unfavorable compared with developed countries.

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In 2006, the percentage of China’s scientific k l d d ti i th ld i llknowledge production in the world is small, as the number of its research papers accepted by major international peer-reviewed journals accounts for only about 6. 5 % of the world total. In terms of citation numbers which areIn terms of citation numbers, which are considered a benchmark for the quality of scientific paper China ranks 13thscientific paper, China ranks 13th internationally (SCI).

Since 1998, the contribution of S&T to China’s economy has receded to a low ebb, as its economic growth is mainly driven by g y yinvestment.

The major sources for industrial S&T progress in China lie outside the country and domestic yS&T capability cannot provide effective support for national developmentsupport for national development.

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So we must update our national S&T innovation capability and realize ainnovation capability and realize a transition in the mode of economic

h f i l l igrowth from simply relying on natural resources to one driven by S&T innovation.

This is the primary task for China’sThis is the primary task for China s economic development in the coming years and also one of the reasons foryears and also one of the reasons for strategic readjustment in China’s S&T d l tS&T development.

outlineoutlineS&T innovation capacity as a S&T innovation capacity as a

strategic resource for sustainable strategic resource for sustainable developmentdevelopmentdevelopmentdevelopment

..Major measures adopted for Major measures adopted for th t t i Adj t tth t t i Adj t tthe strategic Adjustmentthe strategic Adjustment

To increase R&D input and reshape theTo increase R&D input and reshape the

China’s R&D e pendit re relati e to GDP increased

To increase R&D input and reshape the To increase R&D input and reshape the national S&T funding compositionnational S&T funding composition

China’s R&D expenditure relative to GDP increased from 0.6% in 1995 to 1.42% in 2006, when the total R&D expenditure reached 300.3 billion yuan.R&D expenditure reached 300.3 billion yuan.

Fig.1 R&D Expenditure Volume and Intensity of China since 1995350 1.6

250

300

350

ditu

re

1

1.2

1.4

1.6

DP

100

150

200

R&D

Exp

end

（bi

l.）

0.4

0.6

0.8

R&D/

GD

0

50

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

R

0

0.2

Year

R&D R&D/GDP

To increase R&D input and reshape theTo increase R&D input and reshape theTo increase R&D input and reshape the To increase R&D input and reshape the national S&T funding composition national S&T funding composition

In spite of this fast growth, the ratio of p gGERD/GDP is still lower than those in developed countries and even some developing countriescountries and even some developing countries. Moreover, the funding composition is irrational, and the share of funds for basic research is too low, only accounting for 6% of the GERD.low, only accounting for 6% of the GERD.

To increase R&D input and reshape theTo increase R&D input and reshape the

T dd thi bl th t l t

To increase R&D input and reshape the To increase R&D input and reshape the national S&T funding compositionnational S&T funding composition

To address this problem, the central government have decided to step up R&D input by

t bli hi lti l d d ltiestablishing a multi-layered and multi-source network of funding channels and increasing R&D i t f ll t th h ti lR&D input from all sectors through rational distribution and guidance of governmental i t t It i t d th t GERD/GDP illinvestment. It is expected that GERD/GDP will reach 2% in 2010 and 2.5% in 2020.

To increase R&D input and reshape theTo increase R&D input and reshape theTo increase R&D input and reshape the To increase R&D input and reshape the national S&T funding compositionnational S&T funding composition

At the same time, the structure of R&D input will be reshaped by putting relatively more funds into basic research and studiesmore funds into basic research and studies on the environmental enhancement, health care, national security and other endeavors of public welfare or of strategic significance.

To increase R&D input and reshape theTo increase R&D input and reshape the

The Chinese government has drafted a National

To increase R&D input and reshape the To increase R&D input and reshape the national S&T funding compositionnational S&T funding composition

The Chinese government has drafted a National Long and Mid-term S&T plan(2006 to 2020).

National Long & Medium-term Plan for S&T Development

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ObjectiveObjective--making China an innovationmaking China an innovation--based country in 2020based country in 2020

Increasing the contribution of S&T to economicIncreasing the contribution of S&T to economic growth;Reducing over-dependency on foreign technology;g p y g gy;Stepping up the output of publications and patents in major fields.

ApproachApproach

j

pppp--promoting innovationpromoting innovation

I t ti i il ti d i tiImportation, assimilation, and innovation;Systems integration;Innovation of originality.

Research areasResearch areas

Applied research based on the societal needsApplied research based on the societal needsE t i t l t tiEnergy, water resources, environmental protection, health, agriculture, manufacturing, service, and etc.

F i T h l iF i T h l iFrontier TechnologiesFrontier Technologiesbio-tech, IT, new materials, new energy, space…

Interdisciplinary basic researchInterdisciplinary basic researchIn broad areas and cross disciplinary areasIn broad areas and cross-disciplinary areas.

Big science ProjectsBig science ProjectsSemiconductor manufacturing, broadband wireless mobile communication, nuclear power, water

ll ti t t t AIDS d H titi i ftpollution treatment, AIDS and Hepatitis, aircraft manufacturing, space exploration and etc.

To deepen institutional reform and greatlyTo deepen institutional reform and greatlyTo deepen institutional reform and greatly To deepen institutional reform and greatly improve national innovation systemimprove national innovation system

A national innovation system has now been initially established in China and national S&T capacity is reasonably well developed in certain fields (See Table I)developed in certain fields (See Table I).

Table I: Distribution of units, Personnel and Expenditure in 2005

R&D institutes High education EnterprisesNumber ofNumber of institute 3901 3936(1792) 17555(32924)R&D Personnel (thousand) 215.0 227.0 812.0R&D Expenditure(billion Yuan) 51 3 24 2 110 5

(The number in parenthesis is the unit number of high education sector and Enterprise)

(billion Yuan) 51.3 24.2 110.5

To deepen institutional reform and greatly To deepen institutional reform and greatly

A number of major problems still plague China’s

p g yp g yimprove the national innovation systemimprove the national innovation system

A number of major problems still plague China’s S&T progress:

MacroscopicallyMacroscopically

poor coordination among governmental d d i d l f hdepartments and inadequate role of the market mechanism.

To deepen institutional reform and greatly To deepen institutional reform and greatly p g yp g yimprove the national innovation systemimprove the national innovation system

MicroscopicallyMicroscopicallyk i d t i l R&D bilitweak industrial R&D capability;

weak research capacity of scientific institutions (especially in the field of social welfare);

deficient role of universities and immaturedeficient role of universities and immature intermediary agencies;

lack of integration among different players in the system (such as Chinese Academy of Sciences,

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universities, and enterprises).

To deepen institutional reform and greatly To deepen institutional reform and greatly p g yp g yimprove the national innovation systemimprove the national innovation system

Further actions need to be taken: Further actions need to be taken:

systematic review of successful experiences in China’s S&T development; p ;

drawing on experiences and lessons from other countries;

furthering the institutional reform;furthering the institutional reform;

To deepen institutional reform and greatly To deepen institutional reform and greatly

i i f ll li i f ll l

p g yp g yimprove the national innovation systemimprove the national innovation system

giving full playgiving full playto government’s guiding functiong g gto market’s primary role in R&D resource allocationallocationto enterprise’s critical role in conducting technology innovationtechnology innovationto backbone and leading role of State-run R&D i i iinstitutionsto fundamental and strong capabilities of universities

To deepen institutional reform and greatly To deepen institutional reform and greatly p g yp g yimprove the national innovation systemimprove the national innovation system

In particular, importance will be attached to institutional arrangements, through which cooperation among enterprises universitiescooperation among enterprises, universities and research institutes will be fostered, intermediary agencies developed and an innovative network developed.

T d l hT d l hTo develop human resourcesTo develop human resources

Human resources are the key to national Human resources are the key to national competitiveness. competitiveness. pp

In order to raise S&T innovation capacity, In order to raise S&T innovation capacity, d l i f id l i f ione must develop a contingent of experts in one must develop a contingent of experts in

S&T innovation. S&T innovation.

T d l hT d l hTo develop human resourcesTo develop human resources

Among the 2.8 million S&T workers in China in 2005 1 36 million were fullChina in 2005, 1.36 million were full-time R&D professionals, and 1.11 millionwere scientists and engineers.

However there exist some problems inHowever, there exist some problems in this regard.

T d l hT d l hTo develop human resourcesTo develop human resourcesFirstFirst

Per capita S&T workers are small.

5635

7017

58406000

7000

8000

5635

39864000

5000

6000

8052000

3000

4000

805

0

1000

Chi (2002) J (2001) F (2001) G (2001) ROK(2002)China(2002) Japan(2001) France(2001) Germany(2001) ROK(2002)

Full-time R&D professionals per one million people

T d l hT d l hTo develop human resourcesTo develop human resources

Second

Quality of research professionals in China is not good in general.not good in general.

In particular, China is short of top-class professionals and scientists in the fields of strategic needs. g

T d l hT d l hTo develop human resourcesTo develop human resources

Thi dThirdStructural snags in the S&T contingent lead to a paradox: While research units are understaffed due to a chronic scarcity of yqualified personnel, vast waste of talent exists in the R&D community.y

FourthS&T workers are not encouraged to give full play to their individual initiatives and enthusiasm.

T d l hT d l hTo develop human resourcesTo develop human resources

To address the exist problem, emphasis will be To address the exist problem, emphasis will be placed on the following aspects: placed on the following aspects:

First, the cultivation of talented people will be made according to the characteristics of de cco d g o e c c e s cs odifferent types of research work. Second reform of personnel management will beSecond, reform of personnel management will be deepened, forming a mechanism of talent promotionpromotion.Third, efforts will be made to help public

d t di iunderstanding sciences.

To protect intellectual property rights and To protect intellectual property rights and p p p y gp p p y gintroduce technical standardsintroduce technical standards

It is imperative to implement a national It is imperative to implement a national strategy for intellectual property rights strategy for intellectual property rights gy p p y ggy p p y gmanagement.management.

The objectives of the strategy are: The objectives of the strategy are: formulation of a set of consistent policies and statutes at the national level; ;rational definition of the ownership of an S&T result and its property rights;of an S&T result and its property rights;

To protect intellectual property rights and To protect intellectual property rights and p p p y gp p p y gintroduce technical standardsintroduce technical standards

earnest protection of the rights and interests of intellectual property owners;intellectual property owners;

encouragement of enterprises, research institutes, universities and S&T workers to make inventions; ;

upgrading IPR creation and protection capacity;capacity;

Increasing the number and quality of the patents filed by Chinese firms and citizens.

To protect intellectual property rights and To protect intellectual property rights and p p p y gp p p y gintroduce technical standardsintroduce technical standards

At the same time, measures should be taken to break the overseas technology monopoly in the At the same time, measures should be taken to break the overseas technology monopoly in the areas that have a critical bearing on the national interests and people's livelihood, and areas that have a critical bearing on the national interests and people's livelihood, and p p ,encourage technology applications，

p p ,encourage technology applications，

In order to protect the benefits and interests of the country and its enterprises, flexible efforts In order to protect the benefits and interests of the country and its enterprises, flexible efforts will be needed to apply “escape clauses” in international protocols such as WTO will be needed to apply “escape clauses” in international protocols such as WTO pagreements.

pagreements.

To protect intellectual property rights and To protect intellectual property rights and p p p y gp p p y gintroduce technical standardsintroduce technical standards

By taking advantage of its big marketing potential and economic globalization ChinaBy taking advantage of its big marketing potential and economic globalization Chinapotential and economic globalization, China will actively participate in the formulation of

d l ti f i t ti l t d

potential and economic globalization, China will actively participate in the formulation of

d l ti f i t ti l t dnorms and regulations for international trade.

In a bid to win the initiative in global

norms and regulations for international trade.

In a bid to win the initiative in globalIn a bid to win the initiative in global competition, it is necessary to encourage the

t bli h t f t t b d t d d t

In a bid to win the initiative in global competition, it is necessary to encourage the

t bli h t f t t b d t d d testablishment of patent-based standard systems for technology and measurement, and special establishment of patent-based standard systems for technology and measurement, and special licensing regulations.licensing regulations.

To protect intellectual property rights and To protect intellectual property rights and p p p y gp p p y gintroduce technical standardsintroduce technical standards

A coordinated mechanism between governmental departments and business entities A coordinated mechanism between governmental departments and business entities g pwill be set up. g pwill be set up.

Efforts will be accelerated to develop our own system of technical standards and put them into Efforts will be accelerated to develop our own system of technical standards and put them into practice in some key manufacturing realms where core technologies have been developed or practice in some key manufacturing realms where core technologies have been developed or g pwhere domestic companies are in a strong market position.

g pwhere domestic companies are in a strong market position.market position.market position.

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