4 Innovation-driven Development and the Belt and Road
Zhou Fangye
Concepts and features of innovation-driven development
Innovation-driven development is the core element of China’s new development concepts and is at the top of the five development concepts of “innovation, coordination, green development, opening up, and sharing”. Innovation-driven development means that innovation becomes the primary impetus for development, and scientific and technological innovation combines with institutional innovation, administration innovation, commercial mode innovation, format innovation, and cultural innovation, facilitating the transition of development mode to ongoing accumulation of knowledge, technological progress and improvement of labour force quality, and promoting the economy to progress to the stage of more advanced form, more delicate division of labour and more reasonable structure.[1]
First, innovation-driven development is centred on scientific and technological innovation. A nation thrives when its science and technology thrive; a nation is powerful when its science and technology are powerful.[2] The Communist Party of China has been adhering to the important thought of Marxism regarding “socially productiveforce of laboris above all the power of science”[3] and is committed to promoting the innovative development of science and technology. In this regard, MaoTse-Tung clearly pointed out: “We cannot just follow the beaten track traversed by other countries in the development of technology and trail behind them at a snail’s pace. We must break away from conventions and do our utmost to adopt advancedtechniques in order to make China a powerful modern socialist country in not too long a historical period”.[4]
Since the reform and opening up, the Chinese Communist Party has constantly put forward new ideas for scientific and technological innovation. From Deng Xiaoping’s statement that “Science and technology constitute a primary productive force”[5] to Jiang Zemin’s proposal of “invigorating China through science and education”, to Hu Jintao’s statement that “we must keep to the path of independent innovation with Chinese characteristics”, and then to Xi Jinping’s statement that “to implement the innovation-driven development strategy, we must firmly grasp this ‘bull nose’ of scientific and technological innovation”,[6] the Communist Party of China has conducted long-term exploration and practice.
Second, innovation-driven development is a systematic project of all-round innovation. Innovation-driven development is a complex social systematic project involving all areas of economy and society.[7] Scientific and technological achievements should meet the needs of the state, the requirements of the people, and the market demands, and accomplish the three-step jump from scientific research to experimental development and finally to promotional application. Only in this way can they realise the true value of innovation and innovation-driven development.[8] Therefore, to promote innovation-driven development, we should step up efforts to improve the innovation mechanism, establish a national innovation system, and build an ecosystem featuring close coordination and interaction among various innovation entities as well as unimpeded flow and efficient allocation of innovation factors, and bring about the carriers, institutional arrangements and safeguards for achieving innovation-driven development.[9] We should promote scientific and technological innovation, enterprise innovation, product innovation, market innovation and brand innovation in an all-round way, accelerate the transformation of scientific and technological achievements into practical productivity and promote close integration of science and technology with economic development.[10]
Third, the starting point and standpoint of innovation-driven development is “putting people first”. To promote innovation-driven development, China adheres to the basic standpoint of “putting people first” and has proposed the development goal of “mass entrepreneurship and innovation”.[11] As far as the starting point is concerned, the fundamental driving force for innovation-driven development comes from the people’s innovation. This is different from innovation by a small number of people such as experts, scientists, engineers, and so on. It is the real innovation by the people and all-involvement innovation. Each innovator is not only the subject of innovation, but also the beneficiary, communicator, and sharer of innovation activities and innovative ideas. The micro-innovation of hundreds of millions of innovators and entrepreneurs every day and every minute will surely converge into a continuous gathering of ideas, knowledge and technologies, inducing an exponential growth of social innovation and eventually making it the largest innovation in the world. The fundamental purpose of innovation-driven development is to stimulate the vitality of the people, which is an important condition for accelerating innovation-led and innovation-driven development in China.[12]
Fourth, innovation-driven development is independent innovation with an open international vision. Innovation-driven development adheres to independent innovation with Chinese characteristics because “only by firmly holding core technologies in our own hands can we truly seize the initiative in competition and development and fundamentally guarantee national economic security, national defense security and other securities”.[13] Therefore, we must give to play the superiority of socialism, pool resources to undertake major national initiatives, focus on major issues, grasp cutting-edge technologies, adopt an “asymmetric” catch-up strategy, and seize the commanding heights for technological competition and future development. However, we cannot possibly pursue independent innovation behind closed doors. Under the grand background of deepening economic globalisation, the flow of innovation resources are accelerating around the world, and the economic and technological ties among different countries are becoming closer. No country can solve all innovation problems by solely relying on its own efforts.[14] Therefore, to promote innovation-driven development, we must adhere to the combination of bringing in and going global, integrate into the global innovation network with a more proactive attitude, absorb global innovation resources with a more open mind, adopt a more active strategy to promote the output of technologies and standards and build an open innovation mechanism at a higher level.[15]
Path and achievements in innovation-driven development
Since the “innovation-driven development strategy” was formally launched at the 18th CPC National Congress in 2012, the Party and state leaders have repeatedly emphasised the importance of innovation-driven development and successively promulgated various decisions and arrangements to implement the innovation-driven development strategies and build an innovation-oriented country and create a world power in science and technology. In 2015, the CPC Central Committee and the State Council issued Several Opinions of the CPC Central Committee and the State Council on Deepening the Reform of Systems and Mechanisms to Accelerate the Implementation of Innovation-driven Development Strategies, which introduced the plan for deepening the science and technology system reform and the pilot plan for promoting comprehensive innovation and reform. In 2016, the CPC Central Committee and the State Council issued the Outline of the National Strategy of Innovation-Driven Development, which specified the strategic background and requirements of the innovation-driven development strategy, proposed the strategic deployment and strategic tasks and identified the strategic guarantees and organisational implementation. In the same year, the State Council issued the 13th Five-Year Plan on National Scientific and Technological Innovation, which specified the general ideas, development goals, major tasks, and major measures for scientific and technological innovation during the 13th Five-Year Plan period.
The Outline proposed the three-step goals for innovation-driven development. Step 1, China should become an innovation-oriented country by 2020 and basically establish a national innovation system with Chinese characteristics to give strong support for building a moderately prosperous society in all respects. Step 2, China should move to the forefront of innovation-oriented countries by 2030, realise fundamental transformation of the driving force for development and greatly improve the level of economic and social development and international competitiveness to lay a solid foundation for building China into a major economic power and a society of common prosperity. Step 3, China should become an innovation power and a major world centre for science and innovation by 2050 to support the building of a prosperous, strong, democratic, culturally advanced, harmonious, modern socialist country and the realisation of the Chinese dream of national renewal.
The Outline stressed the importance of promoting six transformations to achieve innovation-driven development: transformation in the model of development from an inefficient model focusing on scale expansion to a more sustainable one focusing on quality and efficiency; transformation in the driving force of development from traditional factors to innovation factors; transformation in the industrial sector from the lower-to-medium end of the value chain to the medium-to-higher end; transformation in the status of innovation capability from being “behind, on a par with or ahead of” other countries at the same time but mostly “behind” to being “on a par with” or “ahead of” other countries; transformation in the allocation of resources from focusing on R&D to a balanced distribution along the industrial chain, innovation chain and capital chain; and transformation in innovation entity from an “elite group” of science and technology professionals to the interaction between the “elite group” and the general public involving innovation and entrepreneurship.
In recent years, the quantity and quality of China’s S&T input and output have both significantly increased, and it is now an important period to shift from quantitative growth to qualitative improvement. In terms of input, China’s total spending on research and development reached 1567.67 billion yuan in 2016, accounting for 2.11% of its GDP, and China’s total spending on research and development exceeded the average of the EU’s 15 countries; the full-time equivalent of research and development personnel was 3.878 million person-years, the full-time equivalent of research and development personnel per 10,000 population was 28.1 person-years, and China ranked first in total number of research and development personnel in the world.
In terms of quantity and quality of output, the number of domestic patent applications accepted in China was 3.281 million in 2016, including 1.193 million invention patents, which was an increase of 74% and 128.1%, respectively, over 2012. The number of international patent applications filed under the Patent Cooperation Treaty by Chinese inventors reached 43,168, ranking third in the world for 4 consecutive years; scientific papers published by Chinese scholars in international journals ranked second in the world, the times papers were cited rose to fourth place, and the proportion of papers from China published in the Science Citation Index journals to the world’s total rose from 3.2% in 2000 to 16.3% in 2015. Meanwhile, major advances have been made in science and technology, including the successful launch of the Tiangong-2 space lab, the commissioning of the deep-sea manned submersible Jiaolong and of the 500-metre aperture spherical telescope (FAST) Tianyan, the launch of the dark matter probe satellite Wukong and the quantum science satellite Mozi, and the test flight of the airliner C919.[16]
In 2017, the report to the 19th CPC National Congress once again clearly set the development requirement of “making China an innovation-oriented country” and put forward four development priorities. First, we should aim to reach frontier areas of science and technology, strengthen basic research, and make major breakthroughs in pioneering basic research and path-breaking and original innovations. We will strengthen basic research in applied sciences, launch major national science and technology projects, and prioritise innovation in key generic technologies, cutting-edge frontier technologies, modern engineering technologies, and disruptive technologies. These efforts will provide powerful support for building China’s strength in science and technology, product quality, aerospace, cyberspace, and transportation and for building a digital China and a smart society. Second, we should give a role to resource allocation in a market economy and develop a market-oriented system for technological innovation in which enterprises are the main players and synergy is created through the joint efforts of enterprises, universities, and research institutes. Third, we should put people first, fully mobilise their enthusiasm, initiative, and creativity, attach equal importance to achievements and talent cultivation, and combine the results of scientific research with talent cultivation. Fourth, we should foster a culture of innovation, and strengthen the creation, protection, and application of intellectual property to create a good atmosphere and guarantee for innovation-driven development.
Innovation-driven development leads the building of the Belt and Road
Innovation-driven development and the Belt and Road Initiative complement each other. Xi Jinping pointed out that “we should build the Belt and Road into a road of innovation. Innovation is an important force powering development. The Belt and Road Initiative is new by nature and we need to encourage innovation in pursuing this initiative”.[17]
On the one hand, innovation-driven development is the fundamental driving force of the Belt and Road Initiative. In the initial stage, the driving force of development of the Belt and Road Initiative mainly stems from the free flow of natural resources, labour, capital, and other production factors. By relying on policy coordination, connectivity of infrastructure, unimpeded trade, financial integration and understanding between people, it breaks down trade and investment barriers across countries and explores the economic growth potential of the countries along the routes, especially the developing countries, so as to inject new vitality into the global economic recovery. However, in the medium to long term, the driving force of the development of the Belt and Road Initiative will ultimately depend on comprehensive innovation with scientific and technological innovation at the core.
Developing countries will face mounting population, resource, and environmental pressures, and the old path of fighting for investment, resources, and environment will lead the country nowhere. Only through innovation-driven development will developing countries be able to enhance their total factor productivity and international competitiveness in the process of building the Belt and Road and build a fairer and more rational global industrial division of labour system to ensure that the countries along the routes can have a more favourable development position in global value chains.
On the other hand, the Belt and Road Initiative provides an important platform for innovation-driven development. First, it is a cooperation platform for technological innovation. With the further development of globalisation, information technologies and the Internet, innovation elements are more open and flowable and we cannot possibly pursue innovation behind closed doors.[18] The Belt and Road Initiative helps to improve China’s ability to allocate global innovative resources; it helps enterprises deploy their global innovation networks, establish overseas R&D centres, merge and acquire foreign innovative enterprises and R&D institutions or carry out cooperation with them in the form of joint venture or equity participation based on international rules, and improve their ability to operate intellectual property rights abroad; it encourages foreign investors to invest in emerging industries of strategic importance, high-tech industries and modern service industries, and supports multinational enterprises to set up R&D centres in China to realise the combination of attracting investment and introducing talents and technologies; it encourages and guides internationally renowned scientific research institutions to jointly establish international science and technology centres in China, and attracts international innovative talents to work in China and participate and undertake the national science and technology programmes so as to make better use of both domestic and foreign innovation resources.
Second, the Belt and Road Initiative provides a platform for transformation of innovation achievements. The main characteristics of today’s global technological revolution are the transformation from “science” to “technology”. The basic requirement is to industrialise major basic research achievements.[19] This requires acting in response to the major needs of economic and social development and strives to open up the channels through which technologies are transformed into practical productive forces.[20] The Belt and Road Initiative helps deepen the reform in the field of intellectual property, improve the ability to create, use, protect, and manage intellectual properties, and establish the international investigation and oversea right protection mechanisms to fight against infringement on intellectual property rights; it helps raise the level of China’s standards, strengthens the development of basic and generic standards, improves the interactive support mechanism for technological innovation, patent protection and standardisation, encourages enterprises, alliances, and associations to participate in or lead the development of international standards and promote China’s superior technologies and standards to become international standards; it helps promote the establishment of Chinese brands and an international mutual recognition brand evaluation system and promotes the internationalisation of high-quality Chinese brands, thus creating a favourable international environment for transforming innovation results into real industrial activities at the institutional and institutional level.
Third, the Belt and Road Initiative provides an incubation platform for “mass entrepreneurship and innovation”. The achievements in innovation-driven development depend not only on the height of technological innovation, but also on the breadth and depth of “mass entrepreneurship and innovation”. The Belt and Road Initiative helps to broaden the international vision of entrepreneurs, cultivates innovative entrepreneurs who are bold in making innovations and taking risks, and creates a specialised, market-oriented and internationalised team of professional managers; it helps foster innovative small and micro-enterprises, promotes distributed and networked innovation in the countries along the routes, explores business-model innovations, and encourages small and micro-enterprises to increase their capacity to turn out products that are new, distinctive, specialised, and sophisticated; it helps induce creative inspirations, encourages different cultures in the countries along the routes to exchangeor dialogue with each other, and develops creative products with stronger breath oflife and vitality with the help of local wisdom of each country. This will further strengthen the “people-oriented” social foundation for innovation and development.
[1] The Outline of National Strategy of Innovation-Driven Development, Gazette of State Council No. 15, 2016, Xinhua News Agency, Beijing, May 19, 2016.
[2] “Speech by Xi Jinping at the 9th Group Study Session of Members of the Politburo of the 18th CPC Central Committee”, September 30, 2013.
[3] Central Compilation & Translation Bureau, Karl Marx and Frederick Engels (Vol. 46), Beijing: People’s Publishing House, 1995, pp. 211-217.
[4] Party Literature Research Center of the CPC Central Committee, Collected Writings of MaoTse-Tung (Vol. 8), Beijing: People’s Publishing House, 1999, p. 341.
[5] Editorial Committee on Party Literature of the CPC Central Committee: Selected Works of Deng Xiaoping (Vol. 3), Beijing: People’s Publishing House, 1993, p. 274.
[6] “Speech by Xi Jinping at the 7th Meeting of the Central Leading Group for Financial and Economic Affairs”, August 18, 2014.
[7] “Speech by Xi Jinping at the Symposium Attended by Senior Provincial and Ministerial Officials for Studying and Implementing the Spirit of the Fifth Plenary Session of the 18th CPC Central Committee”, January 18, 2016, People’s Daily, 2nd ed., May 10, 2016.
[8] “Speech by Xi Jinping at the Seventeenth Academician Meeting of the Chinese Academy of Sciences and the Twelfth Academician Conference of the Chinese Academy of Engineering”, June 9, 2014.
[9] The Outline of National Strategy of Innovation-Driven Development, Gazette of State Council No. 15, 2016, Xinhua News Agency, Beijing, May 19, 2016.
[10] “Speech by Xi Jinping in the Inspection Tour in Guangdong”, December 7-11, 2012.
[11] The Outline of National Strategy of Innovation-Driven Development, Gazette of State Council No. 15, 2016, Xinhua News Agency, Beijing, May 19, 2016.
[12] Hu Angang & Zhang Xin, “Innovative Development: The Core of the National Development”, Journal of the Party School of the CPC Central Committee, Issue 2, 2016, p. 109.
[13] “Speech by Xi Jinping at the Group Discussion of Members from China Association for Science and Technology and the Scientific Research Community at the 1st Session of the 12th National Committee of the ChinesePeople’s Political Consultative Conference”, March 4, 2013.
[14] “Speech by Xi Jinping at the 9th Group Study Session of Members of the Politburo of the 18th CPC Central Committee”, September 30, 2013.
[15] Several Opinions of the CPC Central Committee and the State Council on Deepening the Reform of Systems and Mechanisms to Accelerate the Implementation of Innovation-driven Development Strategies, Gazette of State Council No. 10, 2015, Xinhua News Agency, Beijing, March 23, 2015.
[16] Mu Rongping, “Strengthening the First Motive Force of Innovation and Adding New Momentum to Drive Sustained Development”, People’s Tribune, S2, 2017.
[17] “Work Together to Build the Silk Road Economic Belt and The 21st Century Maritime Silk Road—Speech by Xi Jinping, President of the People’s Republic of China at the Opening Ceremony of the Belt and Road Forum for International Cooperation”, Xinhua News Agency, Beijing, May 14, 2017.
[18] “Speech by Xi Jinping at the 7th Meeting of the Central Leading Group for Financial and Economic Affairs”, August 18, 2014.
[19] “Speech by Xi Jinping at the 7th Meeting of the Central Leading Group for Financial and Economic Affairs”, August 18, 2014.
[20] Several Opinions of the CPC Central Committee and the State Council on Deepening the Reform of Systems and Mechanisms to Accelerate the Implementation of Innovation-driven Development Strategies, Gazette of State Council No. 10, 2015, Xinhua News Agency, Beijing, March 23, 2015.