Friday, November 11, 2011

Review: Breakthrough? China’s and India’s Transition from Production to Innovation

A. Preliminary

Growth and change in China and India has attracted attention for two reasons: first, because it shows that the following OECD countries continues to be possible. Second, because it affects the entire world, generating new opportunities but also new threats. In the case of China, the external effect is much greater than that in India since China started its export activities earlier, trade / GDP ratio was higher and was part of a network of East Asian exports.

Conversely, the ability of innovation is concentrated in UniEropa countries, the United States, and Japan. However, this began to change. There are indications that China and India are developing a significant innovation capability. Although OECD countries are still leading in almost all areas of tenologi, the gap distance between them narrowed in recent years.

Before we investigate further, it should be emphasized that what is to be understood is whether and how China and India switch from production to innovation. Analytical framework emphasizes that no single approach is adequate to understand the link penyusulan process. Section 3 attempts to assess the progress made on the basis of the available, as a whole. Section 4 analyzes four specific industrial sectors, although based on secondary sources, provide the answers you need. Section 5 summarizes the conclusions and dissect which tend to be better technology to process and which penyusulan way. Section 6 reflects the implications for OECD countries and the developing world.

2. Framework of Analysis

The main argument in this section is that no single approach is sufficient, which is needed is to combine the analytical framework to capture the development of innovation capability by China and India.

a. Innovation systems approach

This approach has been used to analyze the achievements of China and India (Krishnan, 2007; Li, 2005) and perhaps the most influential approach in the whole world.The starting point for the study of innovation systems is that innovation is an interactive process (Lundvall, 1988). Innovation system consists of companies that produce and innovate and the public and private organizations that conduct basic and applied development. Proportion of centers of innovation systems approach is the ability to innovate depends on the density and quality of relationships between companies and the relationship between companies and related institutions.

Initially focused on the national innovation system (Freeman, 1995), then switch to a local or regional innovation systems (Iammarino, 2005). This is due to two reasons: there is tremendous variation within countries, especially major powers, and geographical and cultural proximity facilitates an interactive process which is the heart of innovation system development. On the other hand, innovation is considered as yag learning process is socially embedded and slowly understood that tdak independently by each of intuition and culture. That should be highlighted is the importance of synergy to interact and competitiveness.

Some countries succeed and others fail to implement it. Failure is partly due to two things: first, the innovation systems approach does not have mastery of the analysis of relationships with key actors outside the region. Second, an understanding of the dynamics of innovation systems approach is still lacking.

b. Pengetian external relations

Systems approach to innovation becomes weak when discussing external relations.While external relations are very important in complementing and transformation of internal relations. China's manufacturing export growth can be understood if we see inset china company into global value chains. Insight we can from these approaches can be used to understand the transition of China from production to innovation capabilities.Starting from the acquisition of production capabilities. This capability is obtained by ontegrasi producers of developing countries into the chain which is coordinated by pemimpen UniEropa-based company, the United States, and Japan, or their intermediaries Taiwan and Hong Kong.

Regarding the spread of innovation capabilities, a more ambiguous, and the second power block kontelaaasilah that accelerates innovation activities.