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New normal’ needs sci-tech innovation

Popularity 8Viewed 2558 times 2015-3-16 11:33 |System category:News| innovation, normal

CHINA’S “new normal” economy has entered a period of medium-to-high growth, and shifted to one increasingly driven by new factors such as sci-tech innovation rather than conventional factors such as labor, natural resources and capital.

 

On March 5, Premier Li Keqiang said in a government work report that China had lowered its 2015 economic growth target to around 7 percent and is ready to fuel the economy through sci-tech innovation. Li’s speech emphasizes the indispensable role of sci-tech innovation: benefiting “new normal.”

 

As China’s demographic bonus gradually fades away, natural resources dwindle and environment quality worsens, the promotion of sci-tech innovation to adjust to the “new normal” is urgently needed.

 

Statistics by the Organization for Economic Cooperation and Development show that sci-tech innovation has contributed to around 70 to 80 percent of its members’ growth. Historical experience also proves that sci-tech innovation has helped many countries prosper: the epoch-making invention of steam machine in the U.K., the internal-combustion engine in Germany and the computer in U.S. all made them more prosperous.

 

China has a different story, though, because it is a newcomer regarding sci-tech innovation. China has had a long learning curve: in the past 30 years, the economy had been mainly driven by conventional factors, and China’s market-for-technology strategy, or opening up the market in exchange for importing advanced foreign technologies, hasn’t really improved its sci-tech innovation ability because multinationals hardly sell their core technologies. With innovation lagging behind, many sophisticated technologies are still monopolized by foreign companies and China’s sci-tech contribution to growth remained as low as 55 percent in 2011.

 

Despite the late start, China’s sci-tech innovation is rapidly gaining momentum. To reinforce its innovation ability, the government has done lots of homework. Since the 1980s, China has initiated three high-tech development plans, Project 863, Project 973 and the National Hi-tech Supporting Plan (2006-2020), which have reaped remarkable results in areas like automatics, IT, quantum communication, new materials and gene engineering. Also, thousands of enterprises and academic institutes have been cooperating in researching, with lots of achievements transformed directly into the market application.

 

At the same time, China has been investing significantly in research and development. The ratio of a country’s R&D expenditures to its GDP is the most important indicator to measure a country’s sci-tech strength level. After the 2008 recession, many developed economies decreased their R&D expenditures, but China did the opposite. In 2013 and 2014 alone, China’s R&D expenditures rose to US$190 billion and US$214 billion, respectively. The amounts accounted for 2.08 and 2.1 percent of the country’s GDP, respectively, which exceeded the standard of 2 percent for a developed country.

 

Continual work and investments in sci-tech innovation have paid off. China ranked top in the world in invention patent filings for the fourth consecutive year in 2014. The Wall Street Journal predicts that China would overtake the U.S. and the EU as the biggest R&D investor by 2020, when 2.5 percent of China’s GDP will be spent on R&D and sci-tech contribution to growth will rise to 60 percent.

 

However, every coin has two sides. In 2014, for example, only 10 percent of new invention patents were transferred for industrial applications, with the rest sleeping in archives. Many R&D funds were either embezzled or used deficiently. Dozens of mega companies dominated in innovation, excluding millions of small-and-medium-sized enterprises.

 

Although lots of advancements have been made, as the “new normal” persists, China needs to do more to strengthen sci-tech innovation. Premier Li reiterated that China would invest more in high-tech sectors, build an innovation-friendly environment and an effective assessment system for sci-tech development and support small-and-medium-sized enterprises in joining the country’s innovation strategy. Hopefully these policies will help China release the potential of sci-tech innovation and build a sustainable “new normal.”

(Opinions of the writer in this blog don't represent those of China Daily.)


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Reply Report ColinSpeakman 2015-3-16 23:22
One Chinese businessman said to another: Premier Li says we need more innovation.

The other replied: OK which new invention should we copy next?

Any reference to the Apple watch is purely coincidental!

Seriously though, China will need  a lot of innovation to shake off the image of copying.
Reply Report voice_cd 2015-3-17 09:24
Thanks for sharing your opinion here. We have highlighted your blog.
Reply Report KIyer 2015-3-17 12:50
Good post that reflects the reality of many relevant issues. China like many other Eastern countries needs to get in the forefront of new products. There needs to be commensurate progress in innovative marketing and advertising that determine commercial success. It requires a Chinese media that plays its part in this effort.
Reply Report seanboyce88 2015-3-17 20:15
invention patent filings

I wouldn't use this as a statistic to judge innovation. Many such patents include a smog mask...with tea leaves on the inside.

R and D is the next step for China, I think it's industrial revolution is coming to an end and it better react fast to keep up. As China's traditional industries move to south east asia in search of cheaper overheads, China now has to begin contesting with the big guns of the technology world. However, with the money they are spending...throw enough mud at a wall....It may just work.

Good article.
Reply Report Dr.Bill.Shen 2015-3-18 18:42
a new term has been employed to describe the upcoming wave: 4th Generation Industrial Revolution. Total automation with wide range of utilization of robotic machinary are at the very center. Innovation is the critical component.
Reply Report J.E.Overington 2015-3-19 06:51
ColinSpeakman: One Chinese businessman said to another: Premier Li says we need more innovation.

The other replied: OK which new invention should we copy next?

Any ...
That is false, Colin. To shake off the liars' reputation that liars gave to China while stealing from Chinese inventions such as the printing press, all China has to do is show some examples of work done and relevant carbon dating results. The facts say it clearly to anyone with half a brain. China has books predating the Gutenberg (theft based?) development. In the early meetings between China and westerners, it is the Chinese who were the more advanced of the two and who in the 1400s decided against building empires to subjugate our ancestors to slavery. Through the bank system changes, we are returning to times we knew. People who insist on disbelieving the noses on their faces they see in their reflection can cut off their own noses to make their disbeliefs correct.
Reply Report ColinSpeakman 2015-3-19 07:45
J.E.Overington: That is false, Colin. To shake off the liars' reputation that liars gave to China while stealing from Chinese inventions such as the printing press, a ...
I think we all accept and admire the historic creativity and fantastic inventions in China's past  and that,despite the dampening down under Chairman Mao, it remains in the DNA. It was a comment as  joke, as you recognised, however some behaviour  in recent years has given credence to the copying mentally, lack of respect for IPC, etc.
Reply Report J.E.Overington 2015-3-19 14:24
Jon Borwein's blog let me know intellectual property wars are raging.

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