Dynamics and Factors of Innovation Gap Between the European Union and China
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Dynamics and Factors of Innovation Gap Between the European Union and China Arkadiusz Michał Kowalski 1 Received: 20 January 2020 / Accepted: 27 October 2020/ # The Author(s) 2020
Abstract The article focuses on the problem of innovation gap in the world economy, as there are in general countries with developed national innovation systems, playing the role of technology leaders, and those with developing innovation systems, acting as innovation followers. Western European economies belong usually to the first group whereas China is traditionally classified in the second group; however, the analysis conducted in this study reveals a continuous catch-up process of this country towards the European Union in terms of the level of innovativeness of the economy. The purpose of this paper is to measure the dynamics of innovation gap between China and the EU average, and to identify the determinants of its evolution. Although for most of the analyzed indicators related to innovation, China’s performance is much below the EU average, the growth rates for Chinese economy in 2008–2018 have been higher than these of the EU, indicating convergence process. The key to development success in China lies in closing the technological gap by importing existing technology, and strengthening internal capabilities to utilize and improve on those technologies. Different reasons for China’s economy improvement in terms of innovativeness are analyzed, including external factors (e.g., foreign direct investments, which are concentrated mostly in eastern provinces, and associated technology transfer) and internal aspects (like science, technology and innovation policy, investment in research and development, and emergence of innovative regional clusters). The conclusion is that dynamic processes of increasing innovative potential of China provide with a solid fundamental for further convergence and diminishing innovation gap between this country and the European Union. Keywords Innovativeness . Innovation gap . Technology transfer . Clusters . Research and
development . China . Innovation divide
* Arkadiusz Michał Kowalski [email protected]
1
Department of East Asian Economic Studies, SGH Warsaw School of Economics, Collegium of World Economy, Al. Niepodległości 162, 02-554 Warsaw, Poland
Journal of the Knowledge Economy
Introduction The research problem that is receiving an increasing interest in international economics is structural changes taking place in the world economy, especially the shift of manufacturing activity, including high and medium-high technology industries, to emerging countries, mainly China. Whereas traditionally, research and development (R&D)-led technological progress was concentrated in developed countries, which generated most of the innovation (Furman and Hayes 2004; Dosi et al. 2006), nowadays we witness the emergence of innovation hubs in developing economies, out of which China is making a considerable progress in innovation performance. A significant change in the geography of innovation po
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