Innovation-Driven Development inChina: Catch-Up and Beyond

Wu Xiaobo, and Wu Dong*

School of Management, Zhejiang University, Hangzhou, China

Abstract: Since the adoption of the reform and opening-up policy in 1978, China haspursued an innovation-driven development strategy. After decades of catching up withadvanced nations, China is taking the lead in certain technological advancements andshifting from dynamic secondary innovations under open conditions to original innovationsat a higher level of openness. In a new round of technological and industrial revolutions,shorter technological lifecycles and ever-changing technological paradigms present astrategic window of opportunities. Based on our review of the emerging driving forces ofsmart manufacturing and unicorns, we suggest that China urgently needs to develop a newnational innovation system to help its companies take the lead and bypass the constraintof existing technology paradigms to seize emerging opportunities. This paper providesa theoretical guidance for China’s innovation-driven high-quality development. Lookingahead, we suggest that innovation-driven development must adapt to rapidly changingtrends.

Keywords: Innovation-driven development, paradigm shift, technological catch-up,

JEL Classification Code: O35

DOI: 10.19602/j.chinaeconomist.2023.07.04