Social capital, the weakest link, is now targeted

Overseas experience shows, that most innovation is a result of collaborative efforts, which presuppose well-established networks. While in China vertical linkages with customers and suppliers are strong and contribute to innovative activities, most achievements stem from firms’ own R&D and only a few percentages from collaborative projects, let alone projects with overseas collaborators (Figure 4). In particular, inter-firm collaboration, which could potentially be an important source of spillovers, is relatively low. The first national-level manufacturing innovation platform, established in June 2016 aims at exploiting potential synergies and complementarities across activities and strengthen the link between development and commercialisation.

Figure 4. International networks in innovation activities are still to be developed

International co-authorship of articles and co-inventions.[Photo/ Source from OECD Science, Technology and Industry Outlook 2016, OECD Publishing, Paris.]

The author is Head of China Desk, Economics Department of OECD (Organisation for Economic Cooperation and Development).