The Chinese Scientific, Technological and Innovative Landscape

La Cina offre diversi aspetti di ispirazione e interessanti prospettive di collaborazione. L’Europa sarà in grado di seguire il buon esempio di questo straordinario leader mondiale fornendo nel contempo strategie vincenti, combinando ristrutturazione e cooperazione? Ne ha parlato, in collegamento da Bruxelles, Michele Genovese, responsabile della EU Liason Unit dell’ APRE – Agency for the Promotion of European Research, al convegno “Quo Vadis Europa?” del 4 aprile alla LUMSA.  Qui, in inglese, la sintesi del suo intervento, che durante il Convegno è stato corroborato da interessanti slides, intitolato “Introduction to the Chinese Scientific, Technological and Innovative Landscape. Co-Incubation and Funding Opportunities in Europe and in China”.

China is  probably the strongest and most competitive emerging economy thanks to the ability to plan and execute impressive and forward looking  strategies, under a competent leadership and the active collaboration of its people.  Massive foreign investments have been attracted, bringing into the Country capitals, expertise, technologies and vital contacts with the rest of the World.

Michele Genovese (APRE) in collegamento da Bruxelles

The success of E.U. emerging competitors is not due to accident or luck: emerging economies follow a strategic approach to innovation and implement it.  Innovation is the policy objective which drives all other policies (education, skills, regional development, standards, tax policy).  It is steered and monitored at the highest level and receives massive investment specially in the emerging Asian Countries; the one  with more success is China.

China, notwithstanding all its contradictions in terms of an authentic democratic political approach and resulting  consequences on individual freedoms and sometimes even on human rights, achieves impressive results in terms of production, competition, distribution of wealth among its people, consolidation of the infrastructural network and, more than all, the setting up of an sensational human capital.  All these  developments find their roots on  solid policies of  technological innovation more and more based on own resources rooted on a solid  cultural heritage: notwithstanding the strong ideological influence of the dominant political Party, the teaching of great thinkers such as LaoZi and Kongzi (Confucius) are still deeply rooted in the Chinese way of thinking and behaving.

The Innovation landscape

An imaginative China has emerged. Chinese experts are now among the world’s best. Relatively marginal Chinese firms are coming up with business-model innovations. The question is now: will Europe succeed in keeping the achievements of a consistent leadership  in cooperation with the emerging economies ? To overcome this challenge it needs  to re-establish its own confidence and that of its partners and competitors through stability, growth and imaginative political will. China offers several aspects of inspiration. Will Europe be able to follow the good example of this amazing world leader while providing itself win-win strategies, combining renovation with  cooperation?

Many Chinese companies are still behind advanced standards in several key industrial sectors, but it is increasingly clear that  more and more Chinese world-class firms operate successfully. As potential partners, Europeans can select those which might have more  impact and invest in  the most  promising scenarios. However it is very likely that strategic choices will escape more and more from their control.

Innovation in a changing, challenging world

Recent changes in the global economic system have influenced the overall perception of the economic and social reality.  The explosive growth of technology and computing and the speed of low cost communication determined a  replacement of priorities: from stability to ongoing changes and sustainability. Innovation is now considered the main driver of economic growth: technical progress combined with innovation is deemed necessary for the enhancement of economic productivity, a core factor, essential for national economies to work in a competitive world. It is a pivot of European and Chinese RDI policies.

The components of innovation determine the performance of an economy, its growth, productivity and sustainable development. Innovation policies, along with the creation and application of knowledge, are an area of public policy intervention: they help solve current problems, to anticipate and to tackle challenges.

Internationalization is inherent to innovation, both aim to help innovative companies:

  • to cooperate as freely as possible
  •  to incorporate an international strategy into their development
  •  to launch the innovative products they develop into the international markets. 

China’s innovative records: short historical background.

Archaeological or historical evidence show that China has been for centuries a source of innovations, scientific discoveries and inventions: paper making, compass, gunpowder, printing, sericulture (historic Chinese monopoly).  Mechanics, hydraulics and mathematics were applied to  metallurgy, astronomy, agriculture, engineering,  craftsmanship, naval architecture and warfare.  Plough dates back to the Longshan culture period; it allowed high agricultural production yields and  the rise of Chinese civilization ( Shang Dynasty 1600–1050 BC). Chromium was already largely used in China in 210 BC, as witnessed by the weapons find near the Terracotta Army in Xi’An. A sophisticated economic system gave birth to paper money (Song Dynasty 960–1279). The navigational aid of compass and naval engineering allowed the legendary missions of Admiral Zheng He from 1405 to 1433. China’s first emperor Qin Shi Huang (221–210 BC) built the  Lingqu canal which  passed  through a mountain range and connected the Xiang and Lijiang rivers. 

The new landscape:

Since China became a world manufacturing power, several “experts” expressed  doubts  about China’s innovative capabilities, calling it: the empire of 山寨 shanzhai, counterfeit.

 More recently international media started talking more positively about China’s innovation capabilities:   “ China has entered a new era. A new generation of entrepreneurs defined by their youth and exponential growth nature has generated new energy and vigor into the country”wrote Tse Edward in the article:  China’s disruptors. What drives China’s Innovation?  published by the magazine Forbes on 14 March 2016. More and more opinionists converged on this guideline and today we can say that  China’s innovation is openly recognized by opinion leaders and by the wide public, recognising without reservations China’s innovation capabilities.  WHY ? Let us try to analyse a few explanations:

  1. Free competition/emulation:   In the early 1980s, at the beginning of China’s era of reform and opening to the world, the Chinese discovered the underdevelopment of their society and the huge gap between the Chinese  and industrial Countries’ economies.   This was a great shock for a nation proud of its historical background and of more recent revolutionary utopias. The struggle for worldwide success is still a strong source of inspiration for Chinese investors.
  2.   Dimensions  of the Chinese market:  Free competition, opening up of the markets, massive foreign investment strongly interact with the size and rapid adaptability of China’s market, driving high  growth rates, stimulating  innovators towards new objectives. Increasing,  forward looking expectations of China’s market potential determine new investments, productions and higher standards of life.
  3. Capital resources:  In the past 20 years investors in China have benefited from exceptional returns, stimulating new and more competitive initiatives.
  4. Societal challenges:   A strong demand rising from the basic and more sophisticated needs of a huge population have also contributed to the development of rapid and innovative solutions.
  5. Computers and Internet:  Electronic tools, informatics programs, engineered computational systems and their practical applications have found in China strong producers, great innovators and hungry consumers.  
  6. The transition from a planned state economy to free market conditions:   Although cumbersome, state-owned enterprises still play a key role  in the Chinese economy, their presence in a market defined by fast changes, intense competition, and need for innovation and their scarce adaptability to market conditions allow less privileged but more dynamic innovative companies to  take advantage of this market gap, reaching extraordinary growth rates and attracting new actors. 

Conclusions

China is actually a powerful Country and a world actor in terms of global GDP, industrial production, competitiveness. Its rapid progress challenges and inspires its competitors, who are often also investors in China and/or industrial partners. They have often strong, vested interests in the development of China’s production. Obviously, public  programs on innovation alone are unable to assure better terms of cooperation within win/win strategies. 

Aula Magna LUMSA – Convegno “Quo vadis Europa?” del 4 aprile 2019

Strong cooperation policies are required, with rapid adaptation to changing realities.  In this sense, a more focused  exploitation of trade and investment impact seems necessary along with parallel policies on research and innovation and in particular :         widespread mobility programs concerning  students, researchers, entrepreneurs, Universities’ joint degree programs;  the adoption of  individual initiatives by businessmen but also by researchers and institutions evenoutside formal arrangements.

Michele Genovese
EU Liason Unit – APRE – Agency for the Promotion of European Research

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