China’s Drive for the Technology Frontier

China has become an innovation powerhouse in high-tech industries, but the widely held view assumes the Chinese model is built on technological borrowing and state capitalism. This book debunks the myths surrounding the Chinese model with a fresh take on China’s strategies for technological innovation. The central argument is that indigenous innovation plays a critical role in transforming the Chinese high-tech industry. Like any successfully industrialized nation in history, indigenous innovation in China allows industrial enterprises to assimilate knowledge developed elsewhere, utilize science and technology resources and human capabilities accumulated in the country, and eventually approach the technological frontier. The question is, how do Chinese businesses and governments engage in indigenous innovation?Employing the "social conditions of innovative enterprise" framework developed by William Lazonick and colleagues, this book analyzes how the interaction of strategy, organization, and finance in leading Chinese high-tech firms underpinned by national institutions enables indigenous innovation with Chinese characteristics. It features detailed case studies of two critical high-tech industries—the telecom-equipment industry and the semiconductor industry—and within them, the business histories of leading Chinese innovators. The in-depth look into China’s experience in indigenous innovation provides valuable lessons for advanced and emerging economies.