How Far Is China From Closing The Innovation Gap?

More investment in R&D is a good sign for the innovation sector but there are still problems to be solved


Innovation in China has long been a victim of government interventions, with new entries, ideas, and projects stringently reviewed and supervised before they are launched.

This is the result of a number of factors, but primary among them is that the Chinese authorities are concerned about what innovations could pose a threat to national security if not controlled. Whether or not such concern is justified, the bureaucratic processes they’ve implemented have greatly slowed the innovation sector and will continue to do so even with increasing investments in R&D for new technologies, products, and services. It's undeniable that China has the potential to have a strong innovation sector and startup-friendly environment, but will not come close to achieving it if does not relax its approach.

During the meeting of the 12th National Committee of the Chinese People's Consultative Conference (CPPCC) in Beijing, Wang Zhibiao, a member of CPPCC, pointed out that, despite the nation being gripped by a wave of innovation and entrepreneurship, problems related to policy implementation and risk awareness need to be addressed. Chinese and foreign entrepreneurs find dealing with legislation and getting the essential paperwork done intimidating, and poor communication between authorities and businessmen that results from the complex process disrupts the innovation growth. However, Wang Zhibiao also added that local and central authorities provide more than 2,000 supportive policies for those who are in need. The vast majority of the surveyed entrepreneurs then argued that they weren't even aware that such policies exist or thought that applying for such support would be too difficult and time-consuming.

China has suffered, by its own high standards, terrible economic growth over the last few years. If this situation is to change, it’s in the country's interests to drive a new wave of innovation, by taking steps to improve communication between authors and business, and ensuring that regulation activities are easier to understand and supportive policies are well publicized.

In 2015, 4.4 million new enterprises were successfully registered in China. The Chinese government is also soon to announce its state-level innovation platform. Some even say that by 2019, the amount of money invested in R&D may surpass the United States. It seems like the country is finally moving in the right direction. However, the same problems remain for the majority of the emerging startups, and their projects are often of poor quality and not capable of disrupting established industries in the way that has been done in other parts of the world.

Investment in R&D is also often not properly managed. The robotics industry is a good example of this. The tech world was once shaken by China's success in the robot industry, with the country considered the center of a revolution that would change the world. Today, the industry is on its knees, caused by the mass duplication of technology, over-investment, and low-quality models. Industry and Information Technology Vice Minister Xin Guobin says that China's robot sector had too much blind expansion during the years it was growing. The lack of focus in investment has meant that there is now a dearth of high-tech performance products, while the market is now drowning in low-end industrial robots that most of the time are only capable of basic functions like carrying and unloading items.

China has more than enough capacity to innovate, with strong financial resources, a well-developed infrastructure, and an influential position economy-wise. The Chinese innovation gap is narrowing to a degree because of the increased spend on R&D and government-led initiatives, but it's critical to focus on how money is invested and making sure bureaucracy is not too overwhelming to ensure the quality and exclusivity of upcoming products. 

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