How China Enhances Its Innovation Capability: The Perception of Executives in International Joint Ventures

摘要

China offers fertile ground for studying how business executives can understand the process of enhancing innovation capability in an environment where the government has a paramount role in creating innovation networks. Before Deng Xiao-ping's economic reforms in the late 1970s and early 1980s, the Chinese government controlled every aspect of industrial production through a strict system of central planning. One of the main motivations for China's "Open Door" policy was to attract foreign direct investment through international joint ventures and to get access to Western technology. Twenty-four interviews with executives from eight businesses involved in such ventures led to six propositions that present the main elements in the creation of Chinese innovation capability, and a flow diagram is used to highlight the key factors that influence these developments. With active government support, both local and foreign multinational firms can join research-led universities to mutually enhance innovation capabilities in a Chinese setting.