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Encyclopedia of Technology and Innovation Management by Gina Colarelli O'Connor, V. K. Narayanan

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Chapter 41. Evolution of China's National Innovation System and Its Challenges in Technological Development

Mei-Chih Hu[79] and John A. Mathews[80]

This chapter utilized the data available in the various national and international S&T databases that combine firm-level, industry-level, and country-level observations to examine the progress and processes involved in China's national innovation system over the last 20 years. Four weaknesses and challenges in the process of building the national innovation system in China were identified as originating in China's historical separation of science and industry. By examining China's technology transaction, it is found that the dramatic rise in the demand for technology in the limited companies sector comprising SMEs is further evidence that, since 2000, SMEs have become an essential part of China's economy. In the process of building China's innovation infrastructure, the concurrence of internal and external factors plays an important role in affecting innovation capabilities. After the implementation of the 10th Five-year S&T Plan (2001–2005), new innovations and instruments are available in China's managed economy, in which the building of absorption capacity in the private sector is emerging and is evidence that China's innovation system is evolving and continuously moving forward.

Introduction

The performance of a national innovation system largely depends on how its constituents, including government, enterprises, bridging institutes, ...

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