chapter  5
64 Pages

Towards a new C-system of innovation

ByMarcus Conle´

Since the turn of the century, China has attracted attention that goes beyond the fact that economic growth rates have remained remarkably high for about three decades already. As can be seen from the comparative assessment of innovation indicators in section 1.4, China is rapidly narrowing the gap between itself and the leading economies. Concomitantly, some Chinese enterprises have made an appearance on the world markets: Lenovo, which has turned into one of the major computer manufacturers after having acquired the PC division from IBM in 2004; Huawei Technologies, a telecom solutions provider which managed to become a main supplier for European operators like Vodafone; Build Your Dreams (BYD), a world leader in rechargeable batteries that entered the market with all-electric cars and hybrid models; and SiBiono GeneTech, the first company worldwide that brought a gene therapy drug to market. Given China’s swiftly increasing levels of inputs committed to strengthening the country’s innovative capacity, some observers already see the country turning into the next ‘technological superpower’ in the not too distant future (e.g. Sigurdson 2005; Wilsdon and Keeley 2007). This statement is, for now, usually voiced in connection with a set of conditional clauses, but the view is nonetheless quite noteworthy against the background of China still being a developing country in the midst of transition from a planned to a capitalist system. At the time of writing, the structure and effectiveness of the C-system is difficult

to assess since, because of its transitional character, China’s system is very much in flux and any analysis of it is exacerbated by the dynamics of time and space. On the one hand, the fact that China is a capitalist system in emergence requires a refocusing of the analysis from an analytical description of the system’smanifestation and reproduction to an examination of the processes leading to its establishment in the first place. That is, whereas leading capitalist systems such as those of the USA and Japan can be classified as specific varieties according to the systems’ reasonably stable patterns observed in the recent past, the reference to a C-system points to a (equilibrium) pattern that will eventually form in the future. So far, many institutional arrangements have proven to merely be ephemeral stepping stones on the way to such a future system. This institutional instability does not mean that institutional change in China is random or that history is unimportant for the

manifestation of the emergent C-system. On the contrary, the evolution is highly path dependent. But as has been argued consistently throughout this book, path dependence does not imply rigidity and deterministic outcomes. China can serve as an excellent example for ‘plastic’ processes leading to quite surprising effects.1