Knowledge-based innovation in China: the agenda and challenges

Citation

Lu, L. and Jin, C. (2009), "Knowledge-based innovation in China: the agenda and challenges", Journal of Knowledge-based Innovation in China, Vol. 1 No. 1. https://doi.org/10.1108/jkic.2009.40401aaa.001

Knowledge-based innovation in China: the agenda and challenges

Article Type: Editorial From: Journal of Knowledge-based Innovation in China, Volume 1, Issue 1

Developing and enhancing national innovation capacities in a knowledge-based economy has become an increasingly important issue in advanced industrial and developing societies alike. China, where a stable and high growth rate has been attained in recent years represents a unique setting for innovation theorists, economists as well as business practitioners. The unprecedented growth of China’s economy offers significant potential for both Chinese and foreign business organizations with an intention to enter the China market either through foreign direct investment, international trade or establishing R&D centres in collaboration with Chinese organizations. Whilst developed countries such as the US, Japan and western EU countries are regarded as the “knowledge hub” in terms of R&D development and innovation capacities, China as a leading nation in science (Zhou and Leydesdorff, 2006) and a scientific power (ranked after the USA, UK, Germany and Japan in 2005) has become one of the emerging R&D destinations for leading global firms. From now on, China phenomena will change the knowledge balance of the world (Jakobson, 2007).

However, the emerging trend of knowledge-based innovation (KBI) has brought about significant challenges not only on Chinese firms in terms of developing and enhancing sustainable competitive advantages based on knowledge creation, but also on Chinese policy-makers in terms of building up and implementing the appropriate science, technology and knowledge innovation policy to meet the national and global challenges of 21st century.

KBI has been approached by many economists and innovation theorists from different perspectives. For instance, the concept of new production of knowledge indicates that new process and practices of knowledge creation have become much more heterogeneous and that social networks are playing an important role in trust building and knowledge sharing between innovation actors (Gibbons et al., 1994). With the parallel processes of globalisation and localisation, the local availability of knowledge and skills is becoming increasingly important. The notion of the learning region emphasizes the interactions and trust relationships between regional innovation actors to create a learning environment that underpins an innovative region (Cook and Morgan, 1998). In addition to the creation of a favourable external innovation environment, the organizational absorptive capacity (Cohen and Levinthal, 1990) is also critical for developing an innovative and learning organization. In the last decade, higher education institutions (HEI) as the key sources of knowledge and innovation has been paid increasingly attention by policy makers. The role of HEI has been driven from the traditional education and research institutions towards “knowledge institutions” that plays a key role in technology transfer and knowledge-based activities at the regional level as well as national and international level. The interactions between academia, industry and government have created the “Triple Helix innovation networks” in which knowledge is created, shared and diffused across the institutional spheres (see Etzkowitz, 2008). Developing KBI also faces significant organizational and management challenges. How to organize knowledge-based activities and manage innovation networks are the key issues facing innovation actors when working across organizational, institutional and national boundaries.

Despite numerous studies on KBI, much of the literature and existing research has been primarily focused in the context of developed countries. There has been lack of provoking research conducted in the context of China – a developing country that is now in the transition from the world manufacturer to the leading nation in KBI. There is a strong need to take a broad view of where innovation comes from and where it applies and to look at innovation beyond the traditional science and technological invention by investigating various forms of innovation and the process of knowledge generation. It is also important to consider the drivers of the new forms of innovation at both national and regional level. Given the complexity of the national innovation system (NIS) and the variety of different regional contexts in China, it is hard to describe the development of KBI in China based on a single model. Hence, attention not only needs to be paid to the changes of national science and innovation policy and its impact on the NIS, but also to the nature and varieties of different regional practices in developing KBI and the implications to policy makers. In addition, one must also keep in mind the contextual nature of innovation: one set of innovation policies does not necessarily fit all sectors. This leads to the requirement for academic researchers and innovation theorists to gather sound intelligences and investigate different sources that contribute to innovation in different economic sectors in China and the design of the appropriate innovation policies to the Chinese conditions.

It is in this context that the Journal of Knowledge-based Innovation was developed with the following distinctive features:

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  It targets a growing and developing market (China) which has attracted increasing attention from international academics, business practitioners, economists and policy-makers both from East and West.

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  It focuses on the hot topic – KBI, which is currently the centre for developing national competitive advantages in both developed and developing countries in terms of how to successfully generate new knowledge and apply new knowledge in the commercial world.

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  It aims to address the problems of how to manage the “innovation gap” at both national and regional level by exploring the nature of the Triple Helix model and collective relations in China and investigating the appropriate innovation policies, R&D strategies for firms in China, the role of higher educational institutions in the knowledge economy and new initiatives emerging from the interactive innovation networks, which are of great interest to both Chinese firms and foreign R&D firms and multi-national corporations operating in China.

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  The editorial team which combines scholars from both eastern and western countries brings different perspectives of KBI innovation in China and provides potential audiences with critical analysis and robust debates on the relevant research issues.

In this inaugural issue, we are pleased to offer our readers the first collection of works that address the significance of KBI in China and the challenges facing China firms as well as Chinese government in striving for an innovation-oriented country.

Xie Wei from Tsinghua University and Richard Li-Hua based in Salford Business School, open the issue by raising the question of what makes China an innovation-oriented country. In this paper, key factors that favour China’s strategy of building up an innovative country are identified including escalating R&D spending, the upgrading of technological capabilities and global linkages. However, it is argued that the key challenges facing the Chinese government is how to build up mechanisms that support the implementation of the innovation policy.

Eric von Hippel, the leading innovation researcher from MIT with his co-author Chen Jin based in Zhejiang University examined the existing innovation policy that has been biased towards the needs of producers through intellectual property rights. It is pointed out that role of users such as leading industrial organizations in developing new product based on market demand has been ignored. The paper calls for more policy attention paid upon the protection of user-centred innovation, especially in countries like China, where there has not been a long tradition of innovation policies favouring private producers, to consider and adapt the innovation policies to the new realities of user-centred innovation.

Although, Xie Wei and Li-Hua identified R&D spending as one of the key favourable indicators for China to develop an innovation-oriented country, how to build up R&D capacities and manage firms R&D performance remain unclear. The next two papers attempt to tackle the issue of managing R&D in China. Drawing upon a broad literature review, Francesco Sofo, from University of Canberra, proposed a framework of R&D management that include open innovation, connecting with the world, knowledge management, public approach, balanced development and communities of inquiry. In Chinese society, it is argued that the six elements are situated in the unique context of “Guanxi” (which is known as relationships or trust to a certain extent in the Chinese society) which is the key for learning in the process of knowledge based innovation. Shifting from macro to micro perspective, Huimin Ma, Yibing Peng from Huazhong University of Science and Technology and co-author Yongjiang Shi from University of Cambridge, took an organizational approach and studied the relationships between information technology enabled knowledge management capabilities and firms’ R&D performance.

To close the first issue, Naubahar Sharif and Erik Baark from Hong Kong University of Science and Technology presented dynamic innovation environment and the challenges facing HongKong to become a leading innovative region in China.

We would like to acknowledge the authors who toil in their scholarship of discovery to provide us with the carefully crafted academic work. We hope our readers enjoy not only the articles, but also the process of conducting dialogues with leading researchers who share the common research interests in the field of knowledge and innovation. We would like to express my sincere thanks to our reviewers for their invaluable comments and contributions that has brought us to this important point of the Journal.

In addition, we would also like to acknowledge the great relationships between the JKIC and China Association for Management of Technology (CAMOT www.camot.org), which provides an international platform for scholars who are interested in the development of technology and innovation in China to share new research ideas and discuss relevant topics and issues. Hence we are able to develop and engage the international spread of topics and authors for the JKIC.

Finally, we would like to acknowledge the great support from the Emerald Publishing Teams, in particular Claire Jackson and Victoria Buttigieg for their kind suggestions and advice during the process of editing the issue.

Lucy Lu, Chen Jin