China’s massive increases in spending on R&D and on developing the scientific infrastructure have been well documented, but until now it was considered that the West still had the edge in terms of innovation.
While China is increasing its innovation capacity, the common view is that inward investment and trade patterns show it still lags in terms of technological sophistication, with more focus on the lower end of R&D.
But a study published this week, using patent activity to assess innovation activity in China, presents new evidence on how technologically advanced the country is. While other research has used patents as a tool for studying innovation, this work goes beyond counting patents, to look at citations from patents to the scientific literature.
It is argued that this is the way to measure innovation activity that is ‘near science’ and thus can be shown to be applying outputs from China’s big investment in R&D to drive innovation.
As the authors put it, “patent applications that cite a paper in the scientific literature represent ideas that are closer to the science base than patents that only cite other patents.”
Using this metric, the study claims to show - in contrast to past studies of the quality of Chinese innovation looking at exports or levels of foreign direct investment – that Chinese innovation is at least as technologically advanced as that in the West.
The research, published by the UK think tank, the Institute for Fiscal Studies, also shows an increase in European multinationals creating new knowledge using inventors based in China. Indeed, western multinationals are increasingly locating innovation activities in emerging economies, including China, and this is becoming an important driver of global knowledge transfer.
The evidence from patents is that Chinese inventors are often working alongside peers from a company’s home base in creating patentable technologies.
In 2010, China ranked fourth in the world in terms of the number of Patent Cooperation Treaty (PCT) patents it filed, behind only the US, Japan and Germany. The country’s rate of advance has been dramatic: in 2000 China filed 1.8 per cent of PCT patents, by 2010 it filed 7.5 per cent. Individual Chinese companies have also become big patenters: in 2010 ZTE Corp was the second biggest filer and Huawei Technologies the fourth biggest.
The rate of growth is dramatic, but the absolute number of Chinese patents filed is still considerable smaller than the US, or of Europe as a whole. Other studies looking at bare patent numbers have been used to downplay fears that having out-competed Europe in volume manufacturing, China is now poised to do the same in high value-added manufacturing and in the development of novel products and processes.
But looking at patent applications that cite the scientific literature – and taking this as an indication of an innovation that stems from fundamental research – the researchers found that proportion of patents by Chinese inventors that are near the science base is at least as high as the proportion of patents filed by Western inventors.
“That is, Chinese inventors display the capacity to innovate alongside US and European inventors at the technological frontier,” the report concludes.
Innovation in China: the rise of Chinese inventors in the production of knowledge
Rachel Griffith, Institute for Fiscal Studies and the University of Manchester; Helen Miller, Institute for Fiscal Studies
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