Institutional Logics in Innovation

This chapter analyses the different institutional logics surrounding China’s innovation machine, including the ‘visible hand’ of the state and ‘invisible hand’ of the market. The idea of innovation in China resulting from centralized decisions in government is shown to be a myth; instead, it results from the interaction of initial bottom-up innovations and subsequent top-down direction, support, or correction. The cultural roots of China’s multiple institutional logics are explained, including the role of hierarchy, the tolerance of ambiguity, and the search for unity. Balance is sought within Chinese bureaucracies, between central and local governments, and between formal and informal authority. The chapter analyses Chinese policy frameworks for science and technology, innovation, intellectual property, education and talent, environment, industry, and the reform of state-owned enterprises. A case study of the car industry is provided, focusing particularly on how policy instruments are used to encourage carmakers to capitalize on the opportunities presented by the new technology trajectory of new energy vehicles.