chapter  3
The change of the development model and its impact on innovative activity: analytical framework and evidence from China
Pages 13

Introduction Since the early 1990s, development economists have begun to notice the obvious change of the development model. On the one hand, the “late development” path followed by Asia’s rst and second generations of developers, Japan and South Korea for instance, has become increasingly less ef cient, if not totally irrelevant, for recent developers; on the other hand, some new stylized facts began to appear in the development process of current developers, notably China and India, the two emerging giants. For example, in China and Japan’s high-growth periods, China’s trade dependency and growth of labor productivity are much higher than those of Japan, but Chinese corporations’ R&D expenditure and the rate of prot are much lower than those of Japanese corporations. Furthermore, the high-growth in Japan was linked to the developmental processes in which newcomers, say Sony and Honda, reached the technical frontier; China’s longlasting growth, however, did not witness the appearance of world-class corporations. These facts hint that Japan and China have different growth patterns and that the dominant development models in the 1960s and the 1990s are quite different (Song 2011).