Fu Xiaolan says China urgently needs to upgrade the level and efficiency of innovation. Provided to China Daily

Academic wants China to reassess the way it handles innovation

China has been a loud and persistent proponent of innovation in the past 10 years or so, its leaders often declaring how important is and saying it should be one of the main driving forces of economic reform and development.

In everyday life the impact of innovation can be seen in more effective products, processes, services, technologies, or ideas that are readily available to markets, governments and society.

In China, high-speed trains, solar energy and supercomputing developments and its space exploration show that the country has something to boast about, and yet the feeling persists that something is missing in its innovation, science policy analysts say.

One of those keen to see the country do better is Fu Xiaolan, director of the Technology and Management for Development Centre at Oxford University. Fu, born in China, is also author of the book China's Role in Global Economic Recovery, and innovation is one of her research interests.

China needs to throw its weight behind the world's push for innovation and in doing so draw all of the benefits it can from the exercise, she says.

Fu says China has invested a lot in innovation and has grown extremely quickly, but that it urgently needs to upgrade the level and efficiency of innovation.

These days no country can succeed without openness and taking a role in global innovation, she says.

"China needs to use unconventional modes of integration, including transnational collaborative innovation, outward direct investment and mobility of highly skilled talent. It should also take part in setting international standards and in the activities of international organizations.

"China needs scientists and engineers who are not only good at their research but who are good at communicating, organizing and taking a lead in international organizations."

The country also needs to clearly communicate to the world the meaning of the expression "indigenous innovation", a term governments, academics and businesses in China often use to describe the country's technology-led economic transformation over the past decade, she says.

Fu says some people outside China misunderstand the term, thinking it means the country plans to close its doors, feeling it does not need foreign technology.

In fact indigenous innovation means creating something from which benefits can be drawn, including passing on intellectual property rights, all of that achieved through collaboration and modification.

Fu, who has studied and worked in China and Britain for more than a decade, says developed countries such as Britain, France and Germany all have innovation policies.

China has done well in organizing innovation projects, she says.

"National goals are broken down into several industrial goals, key projects are identified and then people organize all these projects."

As for output, innovation in China has outperformed the other BRICS countries, Fu says, adding that China is catching up and has rapidly increased research and development and other areas of innovation.

However, a country's ability to innovate "is multifaceted and needs to be comprehensively measured through a score system", she says.

The European Commission has developed an annual Innovation Union Scoreboard that provides a comparative assessment of the research and innovation performance of all the EU member states and the relative strengths and weaknesses of their research and innovation systems.

It helps member states assess areas in which they need to concentrate their efforts to boost their innovation performance. On a more limited number of indicators, available internationally, it also covers Australia, Brazil, Canada, China, India, Japan, Russia, South Africa, South Korea and the United States.

Taking the EU as a whole, China ranked 7th in the Innovation Union Scoreboard last year. South Korea and the US obtained the highest scores. China's score was about 40 percent of what South Korea and the US scored and half of what Japan scored.

Compared with EU countries, China did better only in the number of doctoral graduates, because of its population.

To raise efficiency in innovation, China should extend many reforms related to the innovation system, Fu says.

Innovation is not only science and technology, she says, but takes in education, R&D, business, financial support, taxation and banking.

Reform is needed not only in education but also in economics, she says, partly because of the huge economic advantages state enterprises enjoy at present.

"Resources have not been allocated efficiently within the economy, and have not been reallocated to the areas that need resources."

China needs to reform the system and increase competition so that resources are allocated efficiently and are directed to the innovation sector, she says.

Her research shows that the country's small and medium-sized enterprises and private companies have too few resources, whereas in the EU these sectors are the most dynamic driving force of innovation. The Chinese government needs to provide more information on what funding and training is available, she says.

China will increase investment in R&D in the coming years, she says. In 2012, R&D accounted for 1.98 percent of the country's gross domestic product, edging out EU member states, which together managed 1.96 percent, according to estimates that the Organization for Economic Co-operation and Development will publish this month.

In the past a lot of investment went into development research, but now investment in basic research needs to increase, Fu says.

China also needs to upgrade its industrial structure and its technological capability, she says. It also needs to overhaul career appraisal, rewards and promotion criteria in universities, other institutions and companies. In universities, for example, "we should tell people that quality is more important than quantity".

China has made great progress in protecting intellectual property rights, but still needs to do more, she says.

The government should use more pull rather than push policy measures to create a better environment and attract people, she says.

It also needs to use more "horizontal" policies as opposed to "selective" policies, she says.

Horizontal policies are those that benefit everybody, such as on education, R&D and training.

Such policies comply with World Trade Organization rules, and nobody can complain about a country that invests a lot in education, she says. But if policies that benefit a select few are adopted, there will be problems.

Fu also stresses the importance of using international knowledge and talent to improve China's innovative capacity.

The country is not short of scientists and engineers, she says, but does lack star talent, including scientists and engineers with high-level creativity.

"The Chinese government should use the international talent and multinational companies to set up their laboratories in China.

"China should open up the innovation system and attract not only returnees (Chinese scientists and engineers trained abroad), but also international talent from everywhere."

Wang Mengzhen contributed to this story.

zhangchunyan@chinadaily.com.cn

( China Daily European Weekly 02/14/2014 page32)