NIS Transformation and Recombination Learning in China

This paper applies the notion of national innovation systems (NIS) to analyze the transformation of China’s NIS in the 1980s and 1990s. It focuses on two issues. Firstly it probes the interaction between policy-making and reform practice that leads to the transformation of a huge sized government-run industrial technology R&D system, becomes it fitting to the changed macro-economic conditions. Secondly, it analyzes underlining learning mechanisms, as we call it re-combination learning, that assisted the NIS transformation and a rapid pace of economic growth during the market reform time. This paper demonstrates the analytical power of the NIS approach in the developing country circumstance of China. Section 1 “Universal Science and Specific Institutions” illuminates the importance of institutions and outlines the unique institutional structure of China’s NIS developed prior to the market reform. Section 2 “Analytic framework: Innovation Systems, NIS Transformation, and Learning” elaborates analytical concepts and tools for the paper. Section 3 “NIS Transformation” addresses the policy process responsible for the success of the transformation. It explains the frequently asked question: Why Did a Gradual Process Work? Section 4 “Recombination Learning” analyzes the learning process associated with the system’s transformation. This section makes as well a comparison of the learning in China in the examined period with that analyzed for South Korea and Taiwan. Section 5 evaluates the NIS Transformation in China. Finally a short section concludes this work.