Thursday, 12 November 2015

China's state-led innovation model: does it really work?

From our friends at Oxfirst comes another free webinar. This one is entitled "How China’s state-led model is harming innovation and growth". The basic proposition behind it is that China wants leading technology industries, driving Beijing’s strategy to escape the ‘middle income trap’. However, Radomir Tylecote’s PhD research on Chinese solar photovoltaic (PV) patenting suggests that (i) the Chinese system is not be producing the innovation required, that (ii) and Beijing’s attempts to drive innovation are actually hindering it. As the webinar-blurb explains:
Beijing’s strategy involves investing in tech firms through shareholding and R&D funding. By comparing patenting output and quality among Chinese solar firms, Radomir’s research establishes that firms with more state backing – in shareholding and funding – see innovative capabilities fall.

Meanwhile, firms with central government ownership are especially likely to waste R&D funding. But private entrepreneurs often cannot protect their IP from infringement by state firms, and take on state shareholding to do so. Radomir will discuss how majority state-ownership leads to the registration of ‘junk’ patents in less ambitious technological fields, as employees respond to the government’s incentives to patent. But private entrepreneurs face challenges protecting their innovations in court from infringement by state-owned competitors, and in obtaining funding.
The webinar takes place on Friday 27 November 2015 3:00 PM - 4:00 PM GMT.  To sign up for participation, click here.


Neil Wilkof said...

Interesting summary. I seem to recall that Mariana Mazzucato has a lengthy discussion of the solar photovoltaic industry in her book, "The Entrepeneurial State, Debunking Public v. Private Sector Myths", including regarding China. Her book has attracted much attention and I read somewhere that she is now an advisor to Jeremy Corbyn. I wonder how the Ph.D. research alligns with her analysis of the role of the Chinese state in this industry.

Lawrence said...

The problem is China still has a top-down mentality, not having the subtle controls for decentralising policy. The SOEs were picked as national champions, not withstanding evidence that private firms like Xiaomei have been more successful in in consumer oriented response. See recent McKinesy report on the 4 models of innovation and why China is not that great at translational research.