David McHardy Reid, Guotai Chi, Zhi Chong Zhao and Ilan Alon
Performed over a five-year time horizon, this paper aims to analyze the progression rates of technological innovation across 15 sub-provincial Chinese cities. The authors quantify…
Abstract
Purpose
Performed over a five-year time horizon, this paper aims to analyze the progression rates of technological innovation across 15 sub-provincial Chinese cities. The authors quantify and rate innovation performance, then rank the cities based on a purpose-built index designed to gauge the rate of technological progress.
Design/methodology/approach
Using the inferior constraint method, and a variety of national sources of data, the authors construct an innovation index based in part on new product sales revenue, proportion of college students, research and development expenditure of industrial enterprises in relation to gross industrial output value, contract deals in technical markets per capita, hazard-free treatment rate of waste, enterprises with technical development agencies accounts for industrial enterprises, number of high-tech enterprises and invention patent ownership per million population.
Findings
The findings provide a methodology for indexing cities, with 15 Chinese provincial cities as examples. Among the top five cities with the highest technological innovation index were Shenzhen, Nanjing, Guangzhou, Hangzhou and Wuhan. In the bottom were Shenyang, Changchun, Dalian, Xi’an and Harbin.
Research limitations/implications
This study applied a new model of innovation at the city level for China. Application to other industries (real estate, manufacturing, etc.) and countries will extend boundaries of this model and show its wider applicability.
Practical implications
Companies can use this research and methodology when seeking new investments in high tech and innovative products. Locations offering more hospitable environments should be prioritized ceteris paribus.
Originality/value
One weakness of much of the international business and competitiveness literature is that it often views the country as the primary unit of analysis. In this way, nuanced views of the institutional environments within countries are often overlooked. This paper proposes a measure of regional rates of innovativeness across China.
Details
Keywords
The purpose of this paper is to question the conventional wisdom that China fails to produce distinctive innovation; its capabilities limited merely to copying and reverse…
Abstract
Purpose
The purpose of this paper is to question the conventional wisdom that China fails to produce distinctive innovation; its capabilities limited merely to copying and reverse engineering. The author postulates that the lack of innovation is a delayed activity since China is undergoing a process of building absorptive capacity (AC) as a precursor to innovation.
Design/methodology/approach
The author probes this question by drawing on the concept of AC, a competence separate from innovativeness and a precursor to it. By drawing on the AC literature three propositions are established. Subsequently, these propositions are examined, in part, with data drawn from 34 interviews conducted in China with CEOs, other senior corporate officers and government officials. In this way, the author explores the challenges to innovating.
Findings
Thomson Reuters 2015 Top Global Innovators report listed no Chinese company among its top 100 list of innovative companies. The author’s belief, however, favors China to become a source of innovation. A positive tilt derived from both interviews and recent reports published by Bain & Company, Booz and Co as well as McKinsey & Co. This evidences, the author argues, China is acquiring AC, a competence independent of innovation but a necessary antecedent to decoding and deploying the intellectual property in its portfolio. The collective effect of this is that the perception of China as a source of innovative activity will show an uptick when the AC threshold is reached.
Research limitations/implications
This is a viewpoint paper grounded on an exploratory study.
Practical implications
Guidance on AC development is valuable to government policy makers promoting innovation in China and those attempting to arbitrage these developments. Similarly, policy makers in competitive nations should also be aware that their innovation-focused industries may need nurturing and bolstering since they may be at risk of being swept away by a tsunami-like innovation wave from China.
Originality/value
This is an original take on the relationship of AC and innovativeness in China. The author argues that in contrast to the conventional wisdom China has the potential for innovativeness.