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Business / Economy

Unleashing the power of innovation

By ANDREW MOODY (China Daily) Updated: 2014-07-07 07:47

Unleashing the power of innovation

From left: Edmund Phelps, George Yip, Bruce McKern, Han Jian. GAO ERQIANG/CHINA DAILY

"The Chinese don't have to reinvent the wheel or the steam engine, but the time will come when there is an earth-shattering innovation. I fully expect that to happen, but it is not necessary at the moment."

Some are skeptical that China will make technological breakthroughs.

Regina M. Abrami, coauthor of Why China Can't Innovate, with William C. Kirby and Warren McFarlan, argues that the academic system works against the free flow of ideas.

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"Young PhDs are often beholden to a university professor and basically told what they are going to do research on. So it becomes more like an apprenticeship program than self-mastery of a topic. China is not unique on this so it is not completely a East-versus-West thing, but it is a barrier to innovation."

Abrami, a senior fellow in the department of management at Wharton School, speaking from Hong Kong, says there is no issue with the innovative or intellectual capacity of the Chinese people.

"The institutional structures are such that although China has made tremendous leaps and bounds in terms of process innovations and spin-offs, you are not seeing these disruptive innovations."

The Chinese government set itself the target as far back as 2006 to transform the country into an innovative society by 2020 and a world leader in science and technology by 2050.

However, some doubt there is a direct relationship between R&D effort and economic performance.

Edmund Phelps, the Nobelprize winning economist and director of the Center of Capitalism and Society at Columbia University, believes there may be no link at all.

"It is curious that some industries have a lot of R&D going on and others do not. If you look at national data you see Germany is right up there in terms of R&D but it happens to focus on one or two industries that are relatively heavy on R&D. I just don't think R&D data is very meaningful or helpful."

Phelps, also dean of New Huadu Business School at Minjiang University in Fuzhou and author of Mass Flourishing, which raises innovation issues, also does not believe that despite Apple iPhones and the new information age, the current period is a great innovation age.

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