China's Innovation Challenge: An Introduction

Lewin, A. Y., M. Kenney and J. P. Murmann (2016). China's Innovation Challenge: An Introduction. China's Innovation Challenge: Overcoming the Middle Income Trap. A. Y. Lewin, M. Kenney and J. P. Murmann. Cambridge, UK, Cambridge University Press, ISBN 978-1-107-12712-8: 1-31.

51 Pages Posted: 7 Mar 2016

See all articles by Arie Y. Lewin

Arie Y. Lewin

Duke University - Fuqua School of Business

Martin Kenney

University of California, Davis

Johann Peter Murmann

University of St. Gallen; UNSW Australia Business School - AGSM

Date Written: March 6, 2016

Abstract

The current Chinese development model is nearing its limits. The World Bank has cautioned that China could find itself in a “middle-income trap”. China recognizes that it must dramatically increase its capacity for innovation to avoid this trap. This chapter provides an introduction to the enormous complexities and challenges that China faces in transforming the diverse resources available to it for creating an innovation-based economy. It describes how China has over the past four decades developed from being largely isolated and irrelevant to the world economy to becoming the world’s second-largest economy. The chapter lays out two diametrically opposed scenarios for the future development of the Chinese economy. The first, optimistic scenario argues that China can build ever-stronger innovation capability and become a high-income nation. The second, more pessimistic scenario makes the case that, without radical reforms, existing Chinese political and economic institutions will inexorably relegate China to the middle-income trap. The chapter also introduces 14 essays by leading international scholars that collectively discuss with frankness the opportunities and challenges China faces across the different aspects of its society. It does so this by sketching the role of institutions, history, politics, culture, and competition in shaping the attitudes and capacities of individuals, firms, and entire sectors to become more innovative.

Keywords: China, innovation, multi-level analysis, Chinese Economy

JEL Classification: O10, O30, O40, O53, P20, P30, H10, H7, K11, K20, L50, M10

Suggested Citation

Lewin, Arie Y. and Kenney, Martin and Murmann, Johann Peter, China's Innovation Challenge: An Introduction (March 6, 2016). Lewin, A. Y., M. Kenney and J. P. Murmann (2016). China's Innovation Challenge: An Introduction. China's Innovation Challenge: Overcoming the Middle Income Trap. A. Y. Lewin, M. Kenney and J. P. Murmann. Cambridge, UK, Cambridge University Press, ISBN 978-1-107-12712-8: 1-31., Available at SSRN: https://ssrn.com/abstract=2743002 or http://dx.doi.org/10.2139/ssrn.2743002

Arie Y. Lewin

Duke University - Fuqua School of Business ( email )

Box 90120
Durham, NC 27708-0120
United States
919-660-7832 (Phone)
919-681-6244 (Fax)

HOME PAGE: http://www.fuqua.duke.edu/faculty/alpha/ayl3.htm

Martin Kenney

University of California, Davis ( email )

Community and Regional Development Unit
Davis, CA 95616
United States
5305745943 (Phone)

Johann Peter Murmann (Contact Author)

University of St. Gallen ( email )

Dufourstrasse 40a
Institute of Management and Strategy
St.Gallen, 9000
Switzerland
+41 71 224 23 64 (Phone)

HOME PAGE: http://professor-murmann.net

UNSW Australia Business School - AGSM ( email )

UNSW Sydney, NSW 2052
Australia
+61-2-9385-9733 (Phone)

HOME PAGE: http://professor-murmann.net

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