Playing a trump card in global business

Changing trends
"Foreign multinational companies are keen on housing RD facilities in China to tap the huge market and enjoy benefits such as cost efficiency. This is gradually turning China from a world factory to a global innovation hub," says Dan Steinbock, research director of International Business at the India, China and America Institute, a think tank in the US, who believes that China can complete the transformation in 10 years.
"Innovation is often measured by input indicators, such as RD and output indicators, such as patents," Steinbock says. "The global patent power is shifting from the West to China, as measured by the number of patent applications received. In terms of RD expenditure, China is still significantly behind the US, but the gap is shrinking and China is likely to overtake America as the world's greatest innovation investor in about a decade." The indicators are crude, but they do reflect significant trends, he says.
China, which spent $134 billion on RD in 2011, ranked third in the world while the US retained the top slot, spending $415.19 billion.
However, China had had the most rapid growth in RD expenditure worldwide with average annual growth of 17.1 percent between 2005 and 2011, according to the Chinese Academy of Science and Technology for Development.
In output, China overtook the US, becoming the country that registered the most patent applications globally in 2011 for the first time. The US regained the top position last year, but the World Intellectual Property Organization based in Geneva said China, which ranked the fourth in the world, still saw strong double-digit growth in filings.
Despite the promising future, the Global Innovation Index 2013 published on July 1 by Connell University, INSEAD (European Institute of Business Administration) and WIPO (World Intellectual Property Organization) shows that China ranks 35th among all the 142 sampled countries in innovation, compared with 34th in 2012 and 33rd in 2011.
However, Bruno Lanvin, the report's co-editor and executive director of INSEAD's European Competitiveness Initiative, does not doubt China's future as a global innovation hub. He says the decline in its ranking is because of the changed methodologies used in the research and China continues to outpace its peers in middle-income economies in innovation.


Source: China Daily
Time: 2013-07-15