paper 1: changing policy for innovation capacity-building (mu)

2010-7-1 1

Changing Policies for Innovation Capacity-building in China

Director-general, Prof. Dr. Mu RongpingInstitute of Policy and Management (IPM), CAS

The 3rd Workshop on Innovation and Performance ManagementBusiness School Kent University, Canterbury UK 1-4 July 2010

P2

Contents

I. Introduction

II. Innovation Capacity & Innovation Development

III. Policies for Innovation Capacity-building

IV. Conclusion Remarks

P3

Understanding Developmenteconomic development

economic & natural development

economic & natural & societal development

human being centered development

---Scientific Outlook for Development

---Harmonious Society

---Innovation-driven nation 2020

I. Introduction I. Introduction

P4

I. I. Introduction

Global financial crisis/climate change:--threats? --opportunities?--long term or short termMeasures for recovering from the crisis:--10 plans for energizing industrial developments --4 trillion RMB investments in domestic markets--S&T are expected to make great contribution for economic recovering from the crisis.

P5


•China has become one of the world’s largest countries in terms of gross expenditure on R&D (GERD). The ratio of GERD to GDP in China has increased from 0.90% in 2000 to 1.54% in 2008, but much lower than that of developed countries such as USA(2.68%), Japan (3.44%).

P6


•The number of Chinese applications for invention patent in China increased dramatically during the period from 2000 to 2008.

The efficiency of researchers in China in terms of invention patents is lower than that in most developed countries. In 2007, the number of Chinese invention patents granted per 103 researchers was 22.4, much lower than that in Korea (413), in Japan (203), in Germanys(46); China filed 3.8 PCT patents per 103 researchers, much lower than that in Germany (62.7), Japan (39.1)

P7

What is innovation-driven nation?

What is innovative development?

What is innovation capacity?

It is necessary to set up an indicator system with a view to monitoring the evolution of innovative development and innovation capacity in China, and to identifying key policy issues on innovation and so as to provide necessary support for innovation policy-making.


P8

National innovation capacity is the ability of a country to conduct scientific discovery, technological innovation and related commercialization activities.In a broad sense, national innovation capacity is the ability of a country to integrate innovation resources with a view to transforming them into fortune. It is the integrative capacity that promotes economic and social development.Innovation-driven countries usually has powerful national innovation capacity, which indicates high efficiency and effectiveness of innovation activities, and drives social-economic development with a comprehensive coordination and sustainable way.


P9


P10


P11

Evolution of National Innovation Capacity Index of China (2000-2007)

6.968.03 8.79

10.5012.44

14.63

16.65

19.59

0

5

10

15

20

25

2000 2001 2002 2003 2004 2005 2006 2007

Year

Inno

vatio

n C

apac

ity In

dex

Input, Output, Condition, Performance (25 indicators)


P12

8.609.89

11.57

14.16

17.19

20.86

24.17

29.06

5.326.18 6.02

6.847.69 8.40 9.13

10.12

0

5

10

15

20

25

30

35

2000 2001 2002 2003 2004 2005 2006 2007

Year

Inde

x

innovation strenth innovation effectiveness

Scales/strength (11 indicators)

Efficiency/effectiveness (14 indicators)


P13India

MexicoTurkey

BrazilArgentina

south AfricaPoland

PortugalGreece

Czech RepublicChina

RomaniaSlovak Republic

HungarySlovenia

SpainSingapore

IrelandBelgium

ItalyNew Zealand

Russian FederationAustria

AustraliaCanadaIcelandNorway

KoreaLuxembourgNetherlands

FranceIsrael

United KingdomFinland

GermanySweden

JapanUnited States

Index45.2629.1520.3018.3918.3517.6517.1215.7115.5814.6213.6213.5513.4313.3112.4712.4412.4012.0912.0311.3210.7810.619.258.737.967.026.986.916.916.555.725.414.704.634.173.873.626.96

Rank123456789

1011121314151617181920212223242526272829303132333435363738 Argentina

IndiaRomania

MexicoTurkey

south AfricaBrazil

PolandSlovak RepublicCzech Republic

HungaryGreece

PortugalRussian Federation

SloveniaSpain

New ZealandSingaporeAustraliaBelgiumIrelandChina

AustriaItaly

IcelandIsrael

CanadaNorwayFinland

LuxembourgNetherlands

FranceKorea

United KingdomGermanySweden

JapanUnited States

Rank123456789

1011121314151617181920212223242526272829303132333435363738

Index56.9636.7526.6325.2024.7424.5023.6122.0421.4321.0621.0318.6118.4718.3417.7317.2416.6516.4116.3015.8615.1714.9314.7012.2911.1810.3210.3110.10

9.409.048.477.947.627.366.596.596.345.80

Innovation Capacity Index 2000 Innovation Capacity Index 2006


P14

-2%

0%

2%

4%

6%

8%

10%

12%

14%

16%China

KoreaTurkey

IndiaBrazil

Mexico

Spain

Portugal

Norway

Ireland

France

Greece

Poland

Italy

Luxembourg

BelgiumSingapore

Netherlandssouth Africa

SloveniaUnited Kingdom

CanadaAustria

Germany

Iceland

Czech Republic

Sweden

Slovak Republic

Australia

Hungary

Japan

United States

New Zealand

Argentina

FinlandIsrael

RomaniaRussian Federation

Annual Growth Rate of National Innovation Capacity Index (2000-2006)


P15Innovative Development Index in 2000 Innovative Development Index in 2006

IndiaChina

South AfricaRomania

TurkeyRussian Federation

BrazilPoland

MexicoSlovak Republic

HungaryCzech Republic

SloveniaArgentinaPortugal

GreeceSpainKorea

ItalyIreland

AustraliaFranceCanada

BelgiumAustria

GermanyNetherlands

United StatesUnited Kingdom

FinlandNorway

JapanSwitzerland

SwedenIndex54.1749.9649.6248.0347.0646.9345.8744.5342.7542.7042.4942.4842.4541.7440.6537.9937.2637.1432.3031.7931.2831.2329.6228.0127.2826.3826.2824.6123.9622.0919.1515.4715.368.24

Rank123456789

10111213141516171819202122232425262728293031323334 India

South AfricaChina

RomaniaMexico

Russian FederationTurkey

BrazilArgentina

PolandSlovak Republic

HungaryCzech Republic

SloveniaPortugalGreece

SpainItaly

KoreaAustralia

CanadaBelgium

United StatesGermany

AustriaFranceIreland

JapanFinland

NetherlandsUnited Kingdom

SwitzerlandNorwaySweden

Rank123456789

10111213141516171819202122232425262728293031323334

Index66.8165.0463.0857.1856.7356.6554.6754.4453.9852.4852.2052.0252.0151.9249.5349.2647.7747.6640.4539.5539.0236.8036.7833.1832.4731.6330.7430.2329.6829.0526.2320.8717.119.88

Industrialization，Informatization, Urbanization, Education & Health, S&T development


P16

0%

1%

2%

3%

4%

5%

6%Romania

TurkeyChina

Norway

Ireland

Korea

Hungary

Spain

Netherlands

France

Switzerland

Italy

Greece

Slovenia

Brazil

PortugalCzech Republic

Russian FederationPoland

Sweden

Austria

Belgium

Canada

Germany

United Kingdom

Slovak Republic

Finland

India

Australia

United States

South Africa

Japan

MexicoArgentina

Annual Growth Rate of Innovative

Development Index (2000-2006)

-10%

0%

10%

20%

30%

40%

50%Russian Federation

RomaniaSlovak Republic

Czech Republic

Hungary

Poland

Greece

Ireland

South Africa

Norway

Slovenia

Spain

India

Portugal

Belgium

TurkeyNetherlands

CanadaFinland

France

Italy

Australia

United Kingdom

Sweden

Korea

Switzerland

Germany

Austria

Brazil

China

Mexico

United States

JapanArgentina

Annual Growth Rate of Industrialization

Development Index (2000-2006)

GDP/Capital，CO2 Emission/GDP，Energy Consumption/GDP


P17


Chinese government has issued supportive policies to implement the outline of M&L term plan for national S&T development in 2006, and 76 detailed regulations and policy documents by the end of 2009. These policies have effectively promoted the capacity-building for innovation in China, which has profound impact on economic and social sustainable and green development.

P18


P19

Four principles for the 12th five year plan (Sept. 2009)

Overall planning and consider all factorsInnovation-driven Green Growth (sustainable)Work together and share with each other (harmonious).

Innovation capacity-building covers all fields of social, economic and science & technology system, focusing on following: innovation in strategic emerging industries and service industry innovation for energy saving & emission decreasinginnovation on urbanization and urban management


P20

Main Tasks for Innovation Capacity-building•S&T mega-projs, knowledge & tech. inno programs•Development of strategic emerging industries--new energy/bio-tech (medicine/breeding/manufacturing)--information network/new materials.--high end manufacturing/electric cars •Upgrading/restructuring of key industries--shipbuilding, automobile, steel. •Innovation in modern service industriies•National Innovation Cities--e/s/t/s


P21

(1) To Increase Investment in S&T&I•To set up a diversified investment system for STI, to increase STI expenditure dramatically, and to maintain a growth rate faster than governmental regular revenues.•To optimize the structure of R&D expenditure and national S&T programs so as to stimulate enterprises’ investment in innovation.•To set up a new mechanism for managing public R&D expenditure, especially a performance evaluation system, to improve the efficiency and effectiveness of STI, with a focus on expenditure in research organization, talents, and national S&T programs.


P22

(2) Tax Incentives •To share the risk of innovation in enterprises by means of tax deduction (sharing 12.5% of enterprises’ R&D expenditure).

To deduct tax of imported facilities & instruments, and to speedup the depreciation of the facilities and instruments so as to upgrade enterprises’ experimental capacities.

•To provide tax incentives for equipments & instruments & materials imported by ETDC & ERC & National S&T projects so as to promote capacity building for innovation in enterprise.

•To support the development of transformed PRIs, venture capitals, and S&T service institutions by providing tax deduction.


P23

(3) Government Procurement Policy•To promote the indigenous innovation by providing various measures of government procurements, concerning identification of indigenous innovative product and related evaluation measures, for instance, to give high priority to indigenous innovation products in national significant construction projects. •to initially and selectively purchase indigenous innovation products so as to encourage enterprises invest more in innovation product development and capacity-building.


P24

(4) Innovation Based on Imported Technology•To strengthen the management of technology import and assimilation. Key national projects should build innovation capacity based on imported advanced technology.

•To make special technology policy with a list technologies to

be encouraged/limited to strengthen the capacity-building for innovation in enterprises.

•To support cooperation among industries, universities and research institutes in innovation based on imported advanced technologies.


P25

(5) To Create and Protect the IPRs.Chinese government has taken many measures to create and protectintellectual property rights (IPRs) since 2006. •To compile a list of key technologies and products for which China should hold related patents.•To support enterprise to generate & protect IPRs, to engage in standard-making procedure at national and international level.•.To shorten the examination cycle for invention patents, and improve the system for IPR protection and information service.•To support enterprises to set indigenous technical standards jointly with universities and PRIs, to integrate them in R&D, design and manufacture.


P26

(6) To Build National Infrastructure/Platform for S&T•To construct lots of experimental bases, infrastructure and platforms, including the scientific facilities and large equipments, the platform of natural resources and scientific data, for NKLs/NEL/NERC.

•To support enterprises, especially transformed research institutes and large enterprises to establish TDCEs and NELs through cooperation with universities and research institutes.

•To establish a sharing mechanism to make the platform for STI open to all users, for instance, to evaluate the openness and effectiveness of these platforms.


P27

(7) To Train Qualified HR & Make them Flow to Firm•To train talents in different level from top scientist to skilled workers, to encourage talents flow from Universities to enterprises.

•To recruit/bring up world leading scientists/experts in strategic research fields via national program for hi-level innovation talents. --China has recruited more than 800 oversea top experts working in China via “The Recruitment Program of Global Experts”.

•To bring up scientists/engineering technologists and innovation teams in national S&T programs, and platforms on STI such as NELs/NERCs.

•to reform income distribution/incentive mechanism in enterprisesby providing some preferential policies, to attract talents.


P28

(8) Financial Measures for Indigenous InnovationChinese government has taken a number of financial measures to support indigenous innovation since 2006:

•To given high priority in financing national megaprojects for S&T, national projects concerning the industrialization of hi-tech.

•To improve the financial services to SMEs for innovation, to improve the legal framework by making venture capitals easily invest in start-ups.

•To establish multiple capital markets to support indigenous innovation, including a stock market for technology-based SMEs, stock transactions for hi-tech enterprises and regional transaction market for property rights.


P29


Innovation is a social process, its success is determined by diversified stakeholders of innovation such as scientists, technologists, engineers, entrepreneurs.

P30


• Innovation is a complex process of value creation, including: scientific & technological value, cultural value, economic value and the social value, concerning the activities ranging from scientific discovery, technological invention, methodical innovation, and their applications as well as social diffusion.

P31


It is expected to explore the potential of social innovation and to develop and experiment new theory for innovation development by building a batch of National Innovation Cities, focusing on innovation for key industries, strategic emerging industries, modern service industries and for social development.

P32


Innovation-friendly environment is the key for developing the potential of social innovation, especially the potential of human creativity.

2010-7-1 33

Thank you!Thank you!