R&D in China: Historical and
Institutional Perspectives
Erik Baark
Division of Social Science
HKUST
Knowledge Society?

Knowledge society and Innovation have
become popular terms in China recently
 Modernization and competitiveness relies on
innovation
 New knowledge is an essential component of
innovation

Ultimately, Chinese society should become a
knowledge economy
 But what do concepts of knowledge and
innovation mean in China?
Traditional Chinese Concepts of
Knowledge

Chinese traditional culture profess much
respect for knowledge
 Treasuring up of knowledge, learning, and
teaching
 Imperial examinations
 Exploitation and transmission of scientific
knowledge

But concepts of knowledge and the
process of acquiring it was different from
those that emerged in Europe
Concepts of Knowledge: Greek
and Chinese
Chinese
Greek
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Focus on nature and
elements of nature
Exploring material objects
and causes of phenomena
Sought knowledge for
fame and livelihood as
teachers
Contending ideas debated
Few opportunities for
practical use
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Focus on cosmic order
and principles (dao)
Heaven, earth, society and
human body interacted in
a resonant universe
Chinese intellectuals used
knowledge as advisors to
rulers
Consensus rather than
divergence
Practical application of
knowledge in government
Based on Lloyd and Sivin: The Way and the Word (2002)
The Imperial Style of Inquiry

Totalism: An ordered structure integrating everything that exists
 The same order runs through both human and natural
spheres
 Provides justification for imperial authority – that is
responsible for universal harmony

Strengths
 Stability, shared values through education, self-discipline based
on role models

Weaknesses
 Failure to recognize new knowledge outside established
order
 Primacy of mind over matter
Based on Munro: The Imperial Style of Inquiry in Twentieth-Century China (1996)
Balance of Exploitation &
Exploration
Exploitation: Adoption of existing
technology or routine (duplicative or
creative imitation)
 Exploration: Discovery of new
technology or creation of new
routines (creative innovation)
 Chinese organizations are
predominantly following an
exploitative strategy

Learning: From Imitation to
Innovation

The dominance of an exploitative
approach to learning
 Emphasize rote learning
 Promotes imitation

Chinese actors need to adopt
strategies that also emphasizes
exploration, that is, innovation
Innovation & Creativity

Innovation also involves a break
with the past – the gale of creative
destruction
 Social and cultural institutions need to
foster creativity
 Acceptance – or perhaps celebration –
of individuals who deviate from the
norm: Li Bai, Ren Xiong

Integration of creation and
application of knowledge
 Cooperation of many actors in the
innovation process
 Vital importance of flow of knowledge
Creativity, Invention and
Intellectual Property

Traditional attitude to art and craftsmanship
promoted copying of old masters
 “To Steal a Book is an Elegant Offense”
 Useful for diffusion of technology, but not
necessarily for invention

Although China has been home to a large
number of important inventions, few were
protected by any legal institutions (such as
IPR)
 The current record of IPR in China shows
weak incentives for invention
China’s Innovation System

The PRC science and technology system
is fragmented and based on traditional
concepts of “linear process of innovation”
 Ideal: Basic research  Applied research and
development  Manufacturing – But basic
research weak and isolated
 Fragmentation between creation of knowledge
and application of knowledge
• Based on excessive “division of labor” in the
innovation system
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Some signs of integration of knowledge
creation and application in spin-off firms
Problems of China’s National
Innovation System
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Enterprises still not the center of innovation
Government interferes too much in innovation
process
Financing of innovation weak
Innovative potential of small enterprises
ignored
Exaggerated reliance on research institutes
Deficient flow of knowledge
Generic infrastructure for knowledge creation
and dissemination weak
Based on 柳卸林: 21世纪的中国技术创新系统工程 (2000)
Concluding Remarks

The process of creation and application of
knowledge in China is shaped by the social
context of learning and discovery
 Confluence of knowledge and power relations
 Focus on exploitation, rather than exploration

Innovation also influenced by tradition
 Lack of “creative destruction”
 Dominance of the linear model concept in policy
 Deficient integration of research and development
activities
 Limited flow of knowledge