China’s High-Quality TechnologyInnovation: Scenario Narrative andMeasurement System

Chen Qiangyuan1, Zhao Haoyun2, Lin Sitong3, Shen Yu*4

1 National Academy of Development and Strategy (NADS), Renmin University of China, Beijing, China

2 Business School of Central South University, Changsha, China

3 School of Economics, Shanghai University, Shanghai, China

4 School of Finance, Southwestern University of Finance and Economics (SWUFE), Chengdu, China

Abstract: The world today is undergoing disruptive, transformative shifts driven by anew wave of technological revolutions and industrial changes. In this context, a centralquestion for China’s innovation-driven development strategy is how to effectively identifyand measure high-quality technological innovations. Drawing on the stylized facts andscenario narrative of China’s technological landscape, this paper proposes a frameworkand measurement system for evaluating high-quality technological innovations. WhileChina’s top-level design for technological innovation is guided by policy documents, theincreasing number of enterprises applying for “high-tech enterprise” status has coincidedwith a decline in the quality of patent filings. In response, this paper first underscores thechallenges and necessity of measuring the quality of technological innovations. Second,we introduce the high-quality technological innovation indicators and employ them toassess the quality of tech innovations at the firm level, utilizing an approach that combinesanalogical narrative, gene coding, text analysis, semantic logic, and a database of grantedinvention patents in China. Third, we examine the systematic and individual biases inherentin citation counts, a commonly used indicator, under specific contexts, and employ agranular instrumental variable approach to validate the effectiveness of the indicators.Finally, we develop a “family tree” of the indicators and explore their application scenariosthrough a combination of established and extended indicators. Our findings provide atheoretical foundation for evaluating China’s technological innovation quality, inform policyincentives, and offer insights for academia to apply high-quality technological innovationindicators in different contexts.

Keywords: Innovation quality; technological innovation; measurement system; family tree

JEL Classification Codes: D83, H25, M20

DOI: 10.19602/j.chinaeconomist.2025.01.01