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date: 28 November 2020

Abstract and Keywords

This chapter examines the modern development of innovation in China at three different levels: country, industry, and firm. The country-level analysis focuses on the dynamics of China’s innovation policy framework and the evolution of the country’s national innovation system; the industry-level analysis investigates the achievements and failures of China’s industry policies in recent decades; and the firm-level analysis explores different innovation management practices in three types of enterprises (state-owned enterprises, entrepreneurial firms, and multinationals) in China. Utilizing a cultural framework (values, institutions, and cognitions), the chapter explains why China has lagged behind the West in its science, technology, and innovation since the seventeenth century (Needham’s Grand Question) and points out that to move forward China needs not only to strengthen its innovation infrastructure, such as establishing a market-based financial system, enhancing its market mechanism, and improving its educational system, but also to develop a more global mentality in innovation, such as integrating China into the global ecosystem of innovation by de-emphasizing the national origins of scientific discoveries and following global rules.

Keywords: China, business model innovation, national innovation system (NIS), indigenous innovation, innovation policy, culture

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