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ALI F. FARHOOMAND

NATIONAL INNOVATION SYSTEMS OF CHINA AND
THE ASIAN NEWLY INDUSTRIALISED ECONOMIES:
A COMPARATIVE ANALYSIS

Introduction

The Asian newly industrialised economies (ANIEs), Taiwan, South Korea, Singapore and Hong Kong, have achieved high rates of economic growth despite severe economic challenges.1 ANIEs have since been dubbed as the “Tiger Economies”. Some contend that the success is the result of productivity gain on account of high capital investments in advanced technologies, eg, advanced machinery and information technology (IT).2 Others argue that the source of growth is on account of effective assimilation of technological innovations. If one examines the extent of innovation in terms of the US patent data3 across the developing economies, it is evident that most of the ANIEs have consistently achieved higher innovation than other emerging economies in both Asia and Latin America since the 1980s.4 [see Table 1].

This so-called “Asian Miracle” has intrigued many curious minds from all over the world. A search is on to ascertain its reasons, in the hope that lessons learnt can be replicated in other developing economies. This is especially so for China, which is fast becoming a global economic power. A number of academic researchers and policymakers have begun to speculate on the possibility of China repeating the success of the ANIEs to become the next innovation powerhouse. With this being the focus, specific questions have been raised: What are the current innovation strategies adopted by the ANIEs? What are the differences between the ANIEs and China in terms of their respective strategies? Based on the comparison, how likely is it for China to achieve the same level of innovation as the ANIEs?

This research note is developed to address the above questions. Applying a three-step approach, we will:

  • Introduce the analytical framework and the associated factors;
  • Identify the specific measures devised and implemented in each ANIE, and map these measures against the previously defined factors; and
  • Identify the comparable measures devised and implemented in China, map them against the previously defined factors, and compare the findings with the results obtained from the previous step.

TABLE 1: NUMBERS OF US PATENTS GRANTED TO SELECTED ECONOMIES

  1980íV
1984
1985íV
1989
1990íV
1994
1995íV
1999
Asian Newly Industrialized Economies        
Taiwan 397 1,772 5,271 12,366
South Korea 91 424 2,890 11,366
Hong Kong 113 177 270 570
Singapore 20 47 148 499
Emerging Economies in Asia        
India 40 64 126 316
China 7 129 239 332
Indonesia 5 10 26 18
Malaysia 6 13 43 89
Thailand 7 11 15 56
Emerging Economies in Latin America        
Mexico 191 202 189 257
Brazil 110 156 260 353
Argentina 100 82 109 183
Chile 12 18 32 44
Venezuela 50 103 121 145

Source: Mahmood and Singh (2003)

1 Mahmood, P. I. and Singh, J. (2003) “Technological Dynamism in Asia”, Research Policy, Vol. 32, No. 6, pp. 1031-1054.
2 Krugman, P. (1994) “The Myth of Asia’s Miracle”, Foreign Affairs, Nov/Dec 1994, Vol. 73, No. 6, pp. 62-78.
3 Patent is commonly used indicator of innovation. As the US is the “largest and technologically most advanced market in the world, any sufficiently big invention being patented anywhere with a global market in mind is likely to be patented in the US.” (Mahmood and Singh 2003).
4 Mahmood and Singh (2003).
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