China’s Innovation Machine

Abstract

This chapter sets the context of China’s innovation machine. It introduces its characteristics, including massive numbers of innovators embedded in China’s manufacturing and supply chains that offer efficiency, flexibility, and resilience; the emergence of the digital economy; and pragmatic government policies that have seen the nation progress from a period of catch-up with world leaders to a position of leadership in some fields. It explains the importance of Chinese culture for innovation and the ability of the nation to operate with ‘multiple institutional logics’ of state control and market forces. Challenges confronting China’s innovation machine are outlined, including in some areas of advanced technology and basic research, the fracturing of globalization, and the reascendancy of central planning.