241 Id. : A Configurational Approach 51 Wen Jiabao, “Speech at the National Science and Technology Conference,” Jan., 9, 2006. The executive said his company felt no more discrimination selling products in China than in other nations, such as India, and that it has a fair opportunity to provide input on formation of standards. The National Science Council also operates Taiwan’s highly successful and widely imitated Hsinchu Science Park, established in 1980, and several others in southern Taiwan. 221, Piramal illustrates the way in which some Indian companies are harnessing the nation’s high pool of scientists and engineers and forging strategic alliances in a bid to become global players in innovation. Accomplishments include development of biomedical sensor chips, medical visualization products, and what is advertised as the world’s first 16 nanometer, single-cell static random-access-memory device. significant issues in China.99 Because only a small portion of university businesses are successful—and can pose serious financial liabilities for universities—the government has been encouraging universities to yield management control at enterprises to professionals so they can be run as modern businesses.100, According to Chinese statistics, enterprises are the chief drivers of innovation in China. Companies were to repay the funds when they became profitable. In 2002, the Chinese government and Maryland set up a joint research park near campus that now houses facilities of companies from Beijing, Shanghai, and Guangzhou. 338 Federal Ministry of Education and Research, ICT Strategy of the German Federal Government: Digital Germany 2015, November 2010 (http://www.bmwi.de/English/Redaktion/Pdf/ict-strategydigital-germany-2015,property=pdf,bereich=bmwi,sprache=en,rwb=true.pdf). 106 See The Economist, “Up, Up and Huawei: China has Made Huge Strikes in Network Equipment,” Sept. 24, 2009. 348 Details on the Excellence Initiative can be found on the German Research Council (Deutsche Forschungsgemeinschaft) Web site at http://www.dfg.de/en/magazine/excellence_initiative/index.html. Private Chinese companies mainly care about being able to buy the best products. (June 2011). The nation has some 500 biotechnology companies, and the nanotechnology sector boasts 740 companies and 50,000 industrial jobs.304 Germany also ranks No. The NSF will fully match funds for start-ups, which will be assessed based on their “potential to disrupt a current industry and create new ones,” according to the disruptive innovation methodology of Harvard Business School professor Clay Christensen.287, •    Grants for polytechnics to perform translational research on R&D conducted by universities and public research institutes. Sometimes companies and universities pool their R&D personnel. The institute’s goal is “to stimulate economic activity,” according to General Manager Wim de Waele.415. Global Competitive Environment represents the structural making of the world characterized by the free flow of technology and human resources across national boundaries as well as the spread of Information Technology (IT) and mass media presenting an ever-changing and competitive business environment. 455 Data: Canada Research Chairs Web site. 3 in innovation and No. In 2007, the ministry launched the Top Cluster competition in which industryled strategic partnerships around Germany vied for €200 million in BMBF funds. 115 “Corning Sets Up Research Center on the Mainland,” Chinadaily.com (June 29, 2011). The other is the rapid rise of China (and to a lesser extent India). ZIM’s stated goals are to encourage SMEs to dedicate more efforts to innovation, reduce the risks of technology-based projects, and rapidly commercialize research.359 ZIM has different programs to support cooperative research projects between enterprises and research organizations, R&D commercialization projects by individual SMEs, and innovative networks involving at least six companies. 379 For a history of the organization, see, 60 Years of Fraunhofer-Gesellschaft, Munich: FraunhoferGesellschaft, 2009. Japan had largely missed out on the U.S.-led booms in biotechnology and software.478 Japan’s commercial scene, dominated by large conglomerates, was not producing many dynamic start-ups. 246 Executive Yuan, R.O.C. Recognizing that the global market for energy-efficiency and environmental products is projected to reach €2.2 trillion by 2020, the BMBF,331 BMWi, Fraunhofer, and other organizations also have ambitious programs to commercialize technology through regional innovation clusters, public-private, 330 Federal Ministry of Economics and Technology and Federal Ministry for the Environment, Nature Conservation and Nuclear Safety, Energy Concept for an Environmentally Sound, Reliable and Affordable Energy Supply, Sept. 28, 2010 (http://www.bmu.de/files/english/pdf/application/pdf/energiekonzept_bundesregierung_en.pdf). 147 For example, see Adam Segal, “China’s Innovation Wall: Beijing’s Push for Homegrown Technology,” Foreign Affairs, Sept. 28, 2010 (http://www.foreignaffairs.com/articles/66753/adamsegal/chinas-innovation-wall) and US-China Business Council, Issues Brief: China’s Domestic Innovation and Government Procurement Policies, March 2011. life sciences, “the United States and China are, in every sense, building a global partnership,” noted Deputy Assistant Secretary of State Anna Borg.150, Cooperation through universities is also growing. Some 10 percent of R&D expenditures as of 2005 in Flanders involved industry partnerships with academia, compared to 6.9 percent in the EU and 6.3 percent in the U.S.398 Flanders has initiated a variety of new public-private partnership programs in recent years to promote collaboration further.399 They include regional innovation “cooperation networks,” centers for collective research that serve traditional industries, and “competency poles” that often are located near universities. By 2050, greenhouse gasses are to be 80 percent below 1990 levels, while renewable sources will account for 60 percent of total consumption and 80 percent of electricity generation.330, To achieve those goals, there are detailed “fields of action.” They include investing aggressively in renewable sources such as offshore wind power and bioenergy; expanding nuclear energy and promoting clean coal-fired plants; upgrading the national power grid; research and incentive programs to promote energy efficiency in industry, buildings, and households; aggressively promoting green transportation; and expanding R&D in innovative new energy technologies. 238 European Commission Enterprise Directorate-General, op. Coordination among German’s big research institutions also has traditionally been spotty. 100 Xue, “Universities in China’s National Innovation System,” op. In 2000, wages and benefits of average Chinese factory workers in the Yangtze River Delta, the nation’s leading export region, were one-20th those of comparable workers in Southern U.S. states. 133For example, see presentations by James M. Forcier of A123 Systems in Building the U.S. Renewable energy is an especially high priority. Patents earned CSIR labs rose from low single digits to more than 200 between 1995 and 2005. Forty-six percent of Canadians aged 25 to 64 are post-secondary graduates, the highest rate among OECD nations.444 Canada spent 63 percent of GDP on higher education R&D as of 2007, by far the highest level among G7 nations.445 It also had the most citizens aged 25 to 64 with a tertiary education-49 percent.446 Canada has an extensive network of 24 national research institutes under the National Research Council, which employ 4,500 and hosts 1,200 guest researchers. Building on the original idea of Professor Klaus Schwab and the guidance of Professor Xavier Sala-i-Martin of Columbia University, the GCI 4.0 is the culmination of a rigorous process initiated in 2015 involving extensive review of the empirical literature and numerous workshops and consultations. The talent pool is constrained by the facts that only around 12 percent of college-age Indians are enrolled in higher education, and only 16 percent of Indian manufacturers offer worker training, compared to 42 percent in South Korea and 92 percent in China. 377 Greta Vervliet, Science, Technology, and Innovation, Ministry of Flanders, Science and Innovation Administration, 2006. 104 U.S. company interview in Beijing (June 2011). Google has set up R&D centers in Bangalore and Hyderabad and regards those operations as on par with those at its headquarters in Mountain View, California, according to Google executive Ram Shriram. 3 UNESCO, Institute for Statistics Database, Table 25, Gross Expenditure on Research and Development in constant dollars. The U.S. devotes 17.4 percent of its R&D spending to basic research, another 22.3 percent to applied research, and 60.3 percent to R&D development.11 China invests 82.7 percent of national R&D spending to development of products and manufacturing process, while devoting just 4.7 percent to basic research and 12.6 percent to applied research.12 [See Figure 5.1], When it comes to creating truly innovative products, however, China still is regarded as an underachiever.13 One hurdle is weak R&D spending by Chinese companies, especially state-owned enterprises.14 Even though business enterprises in China accounted for 73 percent of R&D spending in 2009,15 a World Bank study of nearly 300,000 Chinese enterprises big and small found that the vast majority did not conduct continuous R&D and described Chinese industry as “manufacturing without innovation.”16, China’s weak protection of intellectual property rights is a serious restraint on innovation, preventing companies from enjoying the full profits of their inventions and making foreign investors wary of conducting sensitive R&D in China.17 Other often-cited weaknesses are shortages of the right kind of human resources, weak linkages between government-funded research institutions and the private sector,24 a science and technology establishment that prizes the quantity of journal publications and patents over quality and addedvalue, and over-dependence on government bureaucracy in investing R&D funds. They include: •    The paramount importance of investment in education to provide the skills base upon which an innovation-led economy is based. For a good analysis of China’s information technology and communication strategy by Indian software-industry association Indian softwareindustry association NASSCOM, see “Tracing China’s IT Software and Services Industry Evolution,” whitepaper prepared by NASSCOM Research, August 2007 (http://www.businessstandard.com/general/pdf/082107_01.pdf). Another was realization that innovation would have to propel a greater share of future growth. (June 2011). 364 Remarks on May 24, 20111, by Dietmar Harhoff of the Commission of Experts for Research and Innovation at “Meeting Global Challenges” symposium in Berlin, op. 386 Fraunhofer Ventures Web site, http://www.fraunhoferventure.de/en/, images by moving his or her fingers. The company has licensed drug candidates to Eli Lilly and other Western pharmaceutical companies and has new biological entities in clinical testing that are potential treatments for asthma, diabetes, and rheumatoid arthritis. 225 “Electronics Development Fund to Promote innovation Soon—Official,” Indo-Asian News Source (February 21, 2011). As a result, universities launch few start-ups. Engineers based in different nations collaborated around the clock. 361 The program receives around 6,000 applications a year. 33 OECD, Main Science and Technology Indicators: Volume 2011/1, 2011, p. 18. It has developed highnickel stainless steel, ultra high-strength sheets use in automobiles, and “thirdgeneration steel.”82, The several thousand research institutes still controlled by government agencies employ around 277,000 R&D staff and focus on applied research and development relating to government missions.83 The Chinese Academy of Science has numerous institutes that have created some 400 enterprises84. 492 See presentation by Takehiko Yasuda of the Research Institute of Economy, Trade, and Industry in 21st Century Innovation Systems for Japan and the United States. The Federal Ministry of Economics and Technology, known by its German acronym BMWi, also has a range of technology and innovation programs. In its first five years, the center earned 44 patents. 1, March 2012. 178 Vinod K. Goel, Carl Dahlman, and Mark A. Dutz, “Diffusing and Absorbing Knowledge,” World Bank, op. To address challenges in R&D investment and with the skilled workforce, the Canadian government also remains committed to expanding research collaborations with foreign companies and universities, to improving incentives to attract direct foreign investment, and to recruiting top talent. The apparently endless stream of cheap labour is starting to run dry. Economic Bulletin 2, 2011. 17 For examples of U.S. industry complaints, see John Neuffer, “China: Intellectual Property Infringement, Indigenous Innovation Policies, and Frameworks for Measuring the Effects on the U.S. Economy,” written testimony to the United States International Trade Commission Investigation No. 227 Council of Scientific and Industrial Research, “New Millennium Indian Technology Initiative,” (http://www.csir.res.in/external/heads/collaborations/Nmitili/NMITLI%20Information%20in%20brief.pdf). Launched by the BMBF in 2008, the program allocates funds to strategic partnerships between scientific organizations and industry aimed at speeding up the translation of ideas and research findings into marketable products. 4, Feb. 25, 2008 (http://www.ias.ac.in/currsci/feb252008/452.pdf). Fraunhofer alumni at German companies also help provide the institutes with relationships for new business. The company's operating situation depends on both external and internal factors. On a visit to Washington in January 2011, President Hu signed a joint statement with President Barack Obama in which he pledged that “China will not link its innovation policies to the provision of government procurement preferences.” The statement also said China will seek to join the WTO Government Procurement Agreement by the end of 2011.141 At a meeting with U.S. and Chinese businessmen, President Hu said of companies setting up operations in China: “In terms of innovation productions, accreditation, government procurement, (and) IPR protection, the Chinese government will give them equal treatment.”142 On June 29, 2011, China’s Ministry of Finance said it would not require companies to transfer patents and other intellectual property to China as a condition for selling equipment and technology to the government. 59 Estimate in Springut, Schlaikjer, and Chen, op. Developed in collaboration with MIT and China’s Zhejiang University, the university will have a multi-disciplinary curriculum and research programs. China is one of the leading exporters of solar cells and modules, but they use mature polycrystalline silicon technologies.103 Asked to cite examples of important innovations by Chinese companies in any industry, multinationals executives in China could not come up with any. Still, the vast majority of SMEs spend little on regular R&D, according to Germany’s Center for European Economic Research.356 Mr. Jäkel cited difficulty raising funds for R&D from banks as a major reason. “The indigenous innovation ‘web of policies’ is expected to make it difficult for foreign companies to compete on a level playing field in China,” the ITC reported.67 An American Chamber of Commerce report said “the plan is considered by many international technology companies to be a blueprint for technology theft on a scale the world has never seen before.”68, Chinese officials and economists have sought to assure foreign companies that China’s intent is not to steal foreign technology and shut foreign products out of its market. “We support the institutes that are successful in the market and want them to grow further,” Ms. Hellwig explained. Large Canadian and foreign corporations can claim 20 percent credits that can be used to offset federal taxes due within the next 20 years. four high-level research institutes: Interuniversity Micro-Electronics Centers (IMEC), the Flemish Interuniversity Institute for Biotechnology (VIB), the Flemish Institute for Technological Research (VITO), and the Research Center for Broadband Technology (IBBT). Competitive Environment: Definition A competitive environment is the dynamic external system in which a business competes and functions. •    The value of increasing public and private investment in research and development, with at least 3 percent of GDP generally viewed as a desired target. “ITRI is not only charged with raising the technological level of Taiwan, but also with increasing the level of its productive capabilities. government R&D spending as a percentage of GDP to No. Mr. Ren said China is developing a “comprehensive policy and institutional framework” for renewable energy. Access at http://investtaiwan.nat.gov.tw/matter/show_eng.jsp?ID=433. qualify for subsidies of up to $19,300 per car available to other hybrids in China unless it transfers core technologies to domestic manufacturers.140, In response to high-level complaints by foreign governments, Chinese leaders in 2011 sought to allay major concerns. 16 Chunlin Zhang, Douglas Zhihua Zeng, William Peter Mako, and James Seward, Promoting Enterprise-Led Innovation in China, Washington, DC: The International Bank for Reconstruction and Development/The World Bank, 2009 (http://siteresources.worldbank.org/CHINAEXTN/Resources/3189491242182077395/peic_full_report.pdf). Switch between the Original Pages, where you can read the report as it appeared in print, and Text Pages for the web version, where you can highlight and search the text. The competitive intelligence (CI) team commonly monitors and analyzes 1. These “projects” include developing technologies and services to make model regions “carbon-dioxide neutral,” development of smart grids and large power-storage systems, technologies that help people live well into old age, deploying electric vehicles on Germany roads by 2020, and developing new work organization models that allow people to remain productive longer. D. degrees and the institute received tax reductions for five years to enter business. foreign trade, “Germany has a marked weakness in foreign trade in the area of cutting-edge technologies.”319 German R&D-intensive products overall make a positive contribution to Germany’s foreign trade, but not in the most R&Dintensive areas. Even though Japanese R&D investment and output of patents remained quite strong on world standards throughout the 1990s, Japanese companies stumbled as they tried to make the transition from products derived from well-developed technologies to the creation of more fundamental breakthroughs.477 Japan’s competitiveness in industries such as semiconductors and consumer electronics waned with the rise of new rivals in South Korea and Taiwan. International collaboration is likely to become a more important aspect of Taiwanese innovation strategy. The competitive advantages are conditions that permit an organization to produce a good or service at a lower price or in a more desirable fashion for customers. alliances with Johnson Controls and Visteon. construction at Oak Ridge National Laboratory. 103 See Dexter Roberts and Pete Engardio, “China’s Economy: Behind All the Hype,” BusinessWeek, Oct. 23, 2009. The Chinese government actually uses several definitions of innovation. 5 Battelle and R&D Magazine, 2012 Global R&D Funding Forecast, December 2011. It is early to pass judgment on Canada’s efforts to stimulate private investment in R&D, since many of the new programs were implemented just prior to the 2008-2009 recession, which forced companies to cut back. 266 Bruce Einhorn, “A Creativity Lab for Taiwan,” BusinessWeek, May 16, 2005. Some studies suggest, however, that the spillovers will have a positive long-term impact as seasoned engineers leave foreign companies and join domestic ones.235, India’s national research organizations also are becoming more important global partners. Also see Vivek Wadwha, et al, “The Globalization of Innovation: Pharmaceuticals: Can India and China Cure the Global Pharmaceutical Market?” Duke University Pratt School and Engineering and Harvard Labor and Work Life Program, available at SSRN: http://ssrn.com/abstract=1143472. Funding applications by Finnish companies leapt by 40 percent in 2009.432 Other funds. The Ministry of Education plans to invest $1.7 billion over five years in first-rate universities. Dr. Jäkel of BMWi pointed out that the German government has no qualms about providing “cradle to grave” financial assistance for R&D and commercialization efforts by smalland medium-sized enterprises in the case of “market failure” by private lenders. 329, p. 1128, Sept. 3, 2010. universities, including Peking University, Tsinghua, Zhejiang, and Jiaotong, account for one-quarter of China’s scientific papers and citations.93 The percentage of Chinese researchers at universities has dropped steadily since 1999, to around 15 percent and, although government research grants to universities have grown dramatically, their share of total R&D spending in China has dropped since 1986 to around 8.5 percent, compared 12.8 percent in the United States.94 Even though more than half of Chinese university research is regarded as applied, there still is a debate at many universities over whether they should focus only on basic research, according to Joseph Zhou of Tsinghua University. Companies can deduct the full cost of R&D machinery and equipment. Job Duties and Skills. According to the independent web portal EurActiv, however, this target is increasingly unlikely to be met (www.euractiv.com). The constitution was designed to prevent the central government from having sole control over education. 247 U.S. Department of State, “Background Note: Taiwan,” Bureau of East Asian and Pacific Affairs, July 7, 2011. 255, To help manufacturing industries take root, government agencies also offer generous assistance, including research grants, early-stage capital, incubators, tax breaks, low-cost access to laboratories and production facilities at world-class science parks, and efforts to build local supply bases of key materials and components. accounts for only 10 percent of total R&D spending, it has been essential to stimulating R&D investment by companies. Each of these nations has revamped their national innovation strategies in order to increase R&D spending, collaboration between industry and academia, and new technology start-ups. 212 Under India’s Soviet-inspired planned economy from 1947 through the introduction of reforms in 1991, Indian companies were regulated by an system of licenses and permits derisively known as the License Raj that controlled what and how much companies could manufacture, prices, sources of capital, closing of factories, and firing workers. The Chinese government distinguishes “original innovation” (yuangshi chuangxin), “integrated innovation” (jicheng chuangxin) in which existing technologies are fused together in new ways, and “re-innovation” (yinjin xiaohua xishou zaichuangxin), in which imported technologies are assimilated and improved upon.120 China has put a heavy emphasis on assimilating foreign technology in order to develop indigenous products. Many state institutes still tend to focus on patents and publishing papers, however, rather than on disseminating technology to industry. Also, compensation for researchers no longer is restricted by government civil-service rules.345 However, these institutes are expected to orient more of their research around missions defined by the national High-Tech Strategy. In 2007, the government committed $46 million to fund large collaborative networks that support private-sector innovation headed by business consortia. 73 From presentation by Ren Weimin of the National Development and Reform Commission in Building the 21st Century: U.S. - China Cooperation in Science, Technology, and Innovation, op. Since the financial crisis in 2008, the U.S. economy and businesses have struggled to recover from the greatest economic crisis since the Great Depression of the 1930s. Revenue from industry must range from between 25 percent of National innovation system, February... 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