Abstract:

One type of strategy designed by states in response to the challenges of globalization has been to develop and exploit knowledge-based industries. Such a strategy came upon the realization that the capacity for innovation –technological or social – is critical in the global competitiveness environment and that countries which are able to develop close links between their universities and their businesses, and successfully commercialize the new knowledge will survive and thrive in the global economy. Consequently, they consolidated the magic knowledge triangle innovation – research – education and stimulated industry – knowledge interactions in order to be able to better commercialize the new knowledge. This paper addresses these topics with a special focus on how China deals with innovation on its way to achieving the global superpower status. Until now, the Chinese mode has been working based on a combination of manufacturing, imported technology and substantial flows of foreign investment. Each of these factors has its contribution to the high competitiveness levels of the Chinese economy. Recently, China has decided to place education, knowledge production and innovation at the heart of growth processes. After the „Made-in-China” label has conquered one market after the other, focus is now placed on how to increase its profitability and competitiveness and how to change its growth mode. In 2006, China launched the national program „The Medium to Long-Term Science and Technology Development Program”, which is meant to enhance its capability for innovation and knowledge production. It calls on China to become an „innovation-oriented society” and to make science and technology progress a primary driver of economic and social development. And it is complementary to the massive investment program of establishing highly competitive education and research institutions. The significance of the science and innovation program embraced by China will be discussed from at least three larger perspectives. First, it is a living proof that the first driver of today’s global competition is technology. If China is to become a global power, it needs to challenge US supremacy in this field. Otherwise, it will remain a second rank power, in spite of the fact that it possesses impressive foreign exchange reserves and excels in different areas. China plans to win its technological independence, as an acknowledgement of the fact that this is a prerequisite for being a global competitor. Second, the gaps between the US and China in the technology and innovation field are sensible and are widened by some psychological factors, too. Traditionally, the image of the United States is associated with technological breakthroughs. Consequently, its products are more desirable, since they embody the brand of technological prowness. In order to close the gap, China will have to enhance its innovation capacity in the first place and come up with its own technologies. At the same time, it has to produce these independent technologies at a low price. The Chinese cost innovation in the field of commodities and manufacturing will have to be replicated in the technological and innovation field. Third, the analysis of China’s strategy to become an innovation-oriented society will underscore the need to strike a balance between technological and social innovation (institutions, social organization, management and financial models etc.) in order for development to happen.

Keywords:

innovation, technology, china, development, globalization.