Invigorating innovation and adoption: Dissecting the government funding behind China’s R&D ecosystem

China’s 12th Five-Year Plan demonstrates the Asian giant’s resolve to accelerate the state-controlled economy’s transition from manufacturing powerhouse to innovation engine, as the government’s 30-year history of funding R&D shows no signs of slowing, according to a research report from Lux Research.

China’s public investments in scientific and high-tech research, implemented through national programs, are embedded in a complex, geographically diverse and evolving institutional landscape, constituting nearly 70% of all R&D funding, which reached $91 billion in 2009.

Among Lux Research’s other key conclusions:

  • Sweeping innovation agenda. China’s innovation programs are driven by its current manufacturing base, a growing domestic market and an appreciation of the country’s future societal needs. Funding has been significant and focused, and will only grow over the next five years.
  • Broad and substantial support for biotech and healthcare. Fundamental R&D spending in the life sciences under 973 programs dwarfs any other area, while a National Science and Technology Major Program will pump over CNY 27 billion ($4.26 billion) into pharmaceutical industry development including active pharmaceutical ingredients (APIs), drugs, and Traditional Chinese Medicine.

 

  • Refined focus on renewable energy. The world’s most populous country is investing heavily and holistically into current and emerging renewable energy technologies. From CNY 4.9 billion ($771 million) for EV-related application R&D, through funding for numerous pilot lines for next generation PV, to CNY 1.05 billion ($165.16 million) for connecting renewable energy and electric vehicles to large-scale grids, pivotal local technology opportunities are strongly supported.
  • Intellectual property (IP) rights regime will reach global standards. China’s focus on innovation means its IP base will spread from a few heavyweights to small and medium enterprises, and start-ups. As Chinese IP assets gain critical mass in foreign countries, its leaders will be forced to provide greater protection to foreign IP in China in order to ensure Chinese rights are protected overseas. Changes will not be sudden but the timeline towards IP protection equality is measured in years, not decades.

The report, titled “Dissecting the Government Funding behind China’s R&D Ecosystem,” is part of the Lux Research China Innovation Intelligence service.

About Lux Research

Lux Research provides strategic advice and on-going intelligence for emerging technologies. Leaders in business, finance and government rely on us to help them make informed strategic decisions. Through our unique research approach focused on primary research and our extensive global network, we deliver insight, connections and competitive advantage to our clients. Visit www.luxresearchinc.com for more information.

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