This article examines the concept of brokerage models of innovation. It discusses the principles of brokerage theories and explains that while traditional models of innovation focus on the generation of novel solutions, brokerage theories focus on how managers recognize and recombine existing resources. Brokerage models of innovation also highlight how organizations are embedded within larger field landscapes and how managerial strategies, structures, and actions aimed at innovation will be enabled or constrained by the institutional dynamics unfolding at these larger levels. This article also highlights the innovation lessons from Thomas Edison, Elmer Sperry, and Design Continuum.
Lorenzo Massa and Christopher L. Tucci
This chapter offers a broad review of the literature at the nexus between Business Models and innovation studies and examines the notion of Business Model Innovation in three different situations: Business Model Design in newly formed organizations, Business Model Reconfiguration in incumbent firms, and Business Model Innovation in the broad context of sustainability. Tools and perspectives to make sense of Business Models and support managers and entrepreneurs in dealing with Business Model Innovation are reviewed and organized around a synthesizing meta-framework. The framework elucidates the nature of the complementarities across various perspectives. Finally, the use of business model-related ideas in practice is discussed, and critical managerial challenges as they relate to Business Model Innovation and managing business models are identified and examined.
Giovanni Dosi and Xiaodan Yu
The chapter analyzes the basic ingredients and processes underlying the “great transformation” from traditional, mostly rural economies to economies driven by industrial activities and advanced services, able to systematically learn, imitate, and innovate. In that transformation, a major driver is the accumulation of knowledge and capabilities. Thus, the chapter addresses the nature of such knowledge and the ways its accumulation co-evolves with the “economic machine”—presiding over income growth and distribution—and with the systems of social relations, institutions, and policies. The latter are crucial in nurturing (or hindering) technological and organizational learning. Even if these vary a lot across historical experiences, all successful episodes have in common fundamental departures from “pure market” prescriptions, but rather shape market signals and the very nature and strategies of economic actors. Finally, in the context of these “historical lessons,” the chapter focuses on the analogies and specifications of the case of China.
This chapter reviews conceptual and empirical arguments for expecting the structure and nature of capital markets to impact on the financing of innovation. Market failure and innovation systems approaches to problems in the financing of innovation are reviewed, including approaches based on the varieties of capitalism, insider and outsider financial systems, and legal rights literatures. The complementarity between financial markets and other markets coordinating the allocation of resources is emphasized so that the impact of financing problems on innovation behaviour cannot readily be separated from wider system effects. The chapter concludes that there are generic issues involved in the financing of innovation related centrally to the long-term and uncertain nature of the pay-offs to innovation investment. The evidence suggests that different financial systems embedded in different financial market and legal structures address different elements of this problem in different ways. Relatively coordinated and bank-financed insider systems appear to offer greater commitments of long-term patient capital alongside investment in firm-specific human capital. There are big pay-offs in these systems in terms of incremental innovation in particular. The death of bank-based coordinated systems has been, as Mark Twain remarked on reading his obituary, greatly exaggerated.
Substantial innovations have happened in China’s financial sector over the past four decades, ranging from the significant increase of institutions, changes of market structure, and development of products to the improvement of regulatory frameworks. These changes and innovations reflect China’s transition from a centrally planned economy to a modern market economy; persistent demand of various financial services derived from the government, corporations, and individuals in a period of rapid economic growth; and alternatively occurring regulation and deregulation by the authorities. The unprecedentedly advanced progress of technology, especially the emergence of modern information revolutions, makes all these changes and innovations possible. Financial innovation has made profound impacts on China’s economic efficiency, financial stability, and social equality, among them some quite positive and some relatively negative.
Justin Yifu Lin and Jianjun Zhou
China has adopted a transition strategy and industrial policies pragmatically according to its economic reality since the reform and opening up started in 1979. The organic combination of an effective market with a facilitating state was the main reason for the success of China’s economy in the past four decades. In the process of China’s economic development, industrial policies have played a crucial role in both industrial upgrading and technological progress. Relying on the comparative advantage—following strategy, China has fully utilized its latecomer advantage. Chinese enterprises learn advanced technologies from developed countries when the opportunities exist and do indigenous innovation when needed. Pragmatism and learning capacity has been the most important endowments and comparative advantages of the Chinese government and enterprises. With learning capacity, the government and enterprises can pragmatically explore the comparative advantage of the existing factor endowments and convert latent comparative advantages into competitive advantages to promote continuous transformation, upgrading, and sustainable development.
This chapter provides an overview of China’s role in global migration flows, as both one of the largest sources of international migrants and an increasingly popular destination for work, travel, or study. The chapter reviews key trends related to China’s outbound and inbound migration, including geographical distribution, citizenship and visa issues, employment, and other forms of migration. It also summarizes relevant policy and institutional developments, including the recent creation of China’s National Immigration Administration. Finally, the chapter outlines a series of measures to improve migration governance, raise global talent competitiveness, and enhance international cooperation on migration. It is proposed that China play a larger international role in this field and promote a more person-centered approach to global migration governance.
Lan Xue, Daitian Li, and Zhen Yu
This chapter provides an updated discussion of China’s national and regional innovation systems. First, it introduces the unique development path and distinct characteristics of China’s national and regional innovation systems. Second, it reviews the evolution of China’s national and regional innovation systems, which is divided into five periods: the pre-reform era (1949–1978), the end of the chaos and the beginning of a new era (1978–1985), the reform of China’s science and technology (S&T) system (1985–1998), the scaling-up of S&T system reform (1998–2006), and the improvement of the national S&T system (2006–2013). Third, it describes the overall structure of China’s national innovation system, illustrating the components and interactions (e.g., university-industry linkages, military and civilian integration) within the system. Then, it evaluates the overall performance of China’s national and regional innovation systems. Lastly, it points out future directions for deepening the reform of China’s national innovation system and continuing to pursue innovation-driven development.
Gary H. Jefferson and Renai Jiang
This chapter assesses China’s science and technology (S&T) progress through the lens of the patenting literature in the context of China. In particular, after presenting an overview of China’s patent production over the past twenty-five years, it investigates the following questions: What accounts for China’s patent surge? What are the implications of the surge for patent quality? Does the nature of the patenting reveal China’s S&T direction and comparative advantage? How has the international sector affected China’s patent production? What has been the role of the government—the central, provincial, and local governments—in shaping patent production? And finally, how heterogeneous is China’s regional patent production; are patenting capabilities diffusing across China?
Jizhen Li, Ximing Yin, and Subrina Shen
Science-based innovation in universities and diffusion through university-industry linkages are the keys to strengthening national innovation capability, especially for emerging markets. This chapter provides a critical overview of China’s innovation and technology transfer between the university and industry in the context of globalization and the new industrial revolution. By doing this, the chapter attempts to provide critical insights for relevant stakeholders—whether they be researchers, innovators, entrepreneurs, government officials, investors, or international organizations—in China’s development, innovation, and technology transfer. The chapter illustrates three aspects related to China’s innovation and technology transfer in comparison with other major players in the field. Then it further analyzes the drivers and challenges of China’s science-based innovation and university technology transfer for understanding the future of China’s innovation and technology transfer.
Peter J. Williamson
This chapter traces the evolution of Chinese innovation strategies starting with cost innovation, accelerated innovation, and its roots in Shanzhai and concluding with digital innovation, which is at the leading edge of Chinese innovation. The distinctive features and antecedents of each of these Chinese approaches to innovation are explained and illustrated. Cost innovation involves using Chinese cost advantage in radically new ways to offer customers around the world dramatically more for less. Accelerated innovation is achieved by re-engineering innovation processes to increase the pace of innovation while reducing costs. The genesis of these capabilities to accelerate innovation can be traced back to Shanzhai: the practice of rapidly copying competitors’ products. Finally, digital innovation by Chinese companies using big data, machine learning, and artificial intelligence algorithms is explored.
Jiang Yu and Yue Zhang
In the past two decades, China has achieved impressive progress and built competence in digital technology–enabled products, processes, business models, and hyperscale e-infrastructure. Driven by the globally largest internet user scale and fast catching up of information technologies, China’s strategy has been transformed from survival to growth and is transforming to market leadership. Now China has built its competence not only in telecommunication, consumer electronics, and PCs but also in some complex technology products like supercomputer systems. China has also witnessed the rise of hyperscale internet giants and the establishment of super e-commerce and mobile payment systems. However, there are still some great challenges that need to be overcome in some “bottleneck” technologies like the semiconductor and software sectors. China is thus seeking ways to move beyond the “global factory” model and cultivate its own technology-intensive industries and innovation capabilities. In the future, it is critical to maintain an open strategy among fierce global competition.
Vito Amendolagine, Xiaolan Fu, and Roberta Rabellotti
Pursuing the “Go Global” strategy launched in 1999, China has recently become one of the major outbound investors worldwide. In the first stage, Chinese outward foreign direct investments (OFDIs) were directed to developing countries, mainly driven by resource-seeking motives; afterward, they started targeting advanced economies, searching for new markets and new technologies. This chapter provides some descriptive evidence of dynamic trends and spatial/sectoral distribution of the Chinese OFDIs that are more likely to affect investors’ innovation capabilities: greenfield investments in research and development activities and cross-border acquisitions of medium-high-tech companies located in technologically advanced countries. Moreover, it discusses the impact of such OFDIs by providing a critical review of the existing literature about the moderating factors that enhance the chances of positive outcomes and the learning mechanisms though which investors source new knowledge from foreign subsidiaries. It concludes with suggestions for future research.
This chapter examines collaboration—the shared commitment of resources to the mutually agreed aims of a number of partners—and innovation management. Very few organizations, if any, can innovate alone, and collaboration with a select number of partners creates the complementarities necessary for innovation, encourages learning, and better equips organizations to deal with uncertainty and complexity. The chapter explores collaborations between firms and between businesses and universities, government policies for collaboration, the role of brokers, and collaboration and technical standards. The management of collaboration has to deal with the instabilities and tensions inherent in this organizational form. Critical tasks include partner selection and structuring and organizing the collaboration. The chapter argues the advantages of managing collaboration as part of the architecture of innovation ecosystems.
Xiaolan Fu, Bruce McKern, Jin Chen, and Ximing Yin
The Handbook of China Innovation, through the contributions of more than sixty leading scholars in the field of China innovation and development studies, attempts to provide a contemporary, authoritative, and critical assessment of the current state of knowledge on the topic of innovation in China. This concluding section, summarizes the main findings of this Handbook, based on the insights from each of the chapters and addresses the question of whether China will become a global innovation superpower. It considers China’s past, present, and future innovation prospects from the perspectives of macroeconomic policy, institutions, microeconomic policies, and managerial initiatives, considering the roles played by both the state and the private sectors and by both domestic and international actors.
Ritsuko Ozaki and Mark Dodgson
This chapter argues it is important for effective innovation management to understand how innovations are consumed. The diffusion of innovation depends on the fit between innovation and consumers’ circumstances and underlying values. Investigation as to how socially contextual and emotional factors, as well as more rational factors such as costs, utility, and technical functionalities, affect innovation adoption decisions is crucial. By using the example of Josiah Wedgwood, the chapter shows how innovation is affected by the broader social and cultural changes that influence patterns of consumption. It uses the examples of hybrid vehicles and green electricity tariffs to reveal the complexities in decisions to consume innovation, understanding of which better informs value propositions from innovation.
Candace Jones, Mark Lorenzen, and Jonathan Sapsed
Creative industries experience a variety of changes, which are driven by differing forces. However this variety may be understood by considering two dimensions: semiotic codes; the signifiers of symbolic value that consumers derive from products, and the material base; the formats, fabrics, and physical human activities underpinning these products. We characterize four types of change, based on high and low change combinations with semiotic codes and the material base: Preserve, Ideate, Transform, and Recreate. This framework is applied to a range of creative industries, from mature sectors like museums, architecture, and fashion, through the many transitions of film production, to contemporary digital advertising and online content creation. We show how each of the change types appear to have different drivers related to public policy, demand, technology, and globalization, offering an alternative classification framework to guide creative industries scholars, practitioners, and policy-makers.
Roberto Verganti and Claudio Dell'Era
Studies of innovation management have often focused their investigations on two domains: technologies and markets. Technological innovation has been capturing most attention, especially as far as radical technological change is concerned. Design has recently gained much attention among practitioners and scholars as a source of innovation. Still, the role of design in innovation and competition remains a rather young (preparadigmatic) area, with blurred boundaries and often unclear or contrasting perspectives. In this chapter we aim to provide a theoretically solid and empirically grounded view on design from a very specific angle: design as a source of innovation. The chapter first defines what innovation driven by design is and how it stands apart from other approaches of innovation. It shows that design is related to the innovation of the meaning of products and services: an innovation that concerns the purpose, the ‘why’ people use things, rather than the functionality and performance of products (i.e. the ‘what’ and ‘how’).
Rongping Mu, Jin Chen, and Rebecca Wenjing Lyu
Innovation studies (IS) has been an interdisciplinary research field over decades of development, based on economics, business and management, sociology, policy, organization studies, and other related subjects. This chapter examines the origin and evolution of the field of IS and systematically reviews the key academic achievements and contributors in the IS community. This chapter also proposes a comprehensive and integrated research review for IS in China. In fact, despite its irreplaceable and essential role in economy, innovation also enjoys an important position in theoretical research in China. Based on unique innovation management practices in Chinese enterprises, Chinese scholars have proposed several unique innovation theories, such as “3I pattern” (imitation, improvement, and innovation), indigenous innovation, total innovation management, etc. Now, during its transition from a major innovative nation to a super innovative nation, China is facing the challenge of how to stimulate more major innovation patterns that would “change the world” in the era of the knowledge economy; thus, based on a holistic review of Chinese innovation journey, we propose a Chinese innovation paradigm and discuss future directions for Chinese IS.
Venni V. Krishna and Nimesh Chandra
The growth and contribution of the Indian Institutes of Technology (IITs) from the 1950s symbolizes the foresight of a developing nation for educating a special cadre of engineering professionals towards building a modern, industrial society. Drawing inspiration from MIT, these institutes have given top priority to the selection of faculty and as well as students through a nationwide competitive examination. Though IITs constitute a small part of the higher education landscape, they play a very significant part in the knowledge-based society. One sector where IITs have made substantial contribution is information and communication technology (ICT) and related segments. IIT brand image became globally known through its alumni contribution in Silicon Valley. In India, IITs are seen as model institutions to be emulated not only in building a culture of research and innovation, but also in the modes of knowledge technology transfer and university–industry relationships.