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On the Diverse Origins of Innovation-Driven Development in China

Authors: Henning Kroll*, Fraunhofer ISI / Leibniz Universität Hannover, Germany, Peter Neuhäusler, Fraunhofer ISI
Topics: Economic Geography, China
Keywords: China, innovation
Session Type: Paper
Presentation File: No File Uploaded

In recent years, China has become a major player on the world stage of economic and technological achievements. Nonetheless, its spatial disparities in innovation capacity remain staggering. While some regions have taken the global lead in specific sectors others remain lagging behind. More importantly, however, the current momentum of socio-economic development originates from structurally very diverse environments. While this is well known, earlier studies often failed to sufficiently account for regional environments' complexity. In consequence, they remained unable to identify distinct manifestations of specific mechanisms of growth. To alleviate that shortcoming, the authors compile a novel dataset integrating information on both the internal composition of technological portfolios and such on the local match of capacities in science, technology, and industry at provincial level. With a view to better understanding China's overall dynamics of growth, our analysis then puts forward two propositions: First, that the thematic fit between capacities at different levels remains an influential factor as long most locale's technological basis remains limited and focused. Second, that common assumptions on the decisive role of related variety will not hold until a situation of evolutionary development on a broader technological basis is eventually achieved in a large number of regions. By means of fixed-effects models, our study provides evidence of both, suggesting while there are increasing manifestations of related variety these are mostly a function, rather than the origin of successful growth. Furthermore, a dedicated cluster analysis documents the increasing spread of mature, technologically more complex innovation environments across Chinas provinces.

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