BOFIT Viikkokatsaus / BOFIT Weekly Review 2016/02
Products of high-tech firms last year constituted the largest category of Chinese exports, accounting for about 30 % of China’s industrial product exports. In 1990, over half of exports consisted of low-tech products. The rise of Chinese technology in Asia is stunning. China accounted for 9 % of Asian high-tech exports in 2000, but 44 % in 2015.
The Global Innovation Index (GII) 2015, published jointly by Cornell University, INSEAD and the World Intellectual Property Organization (WIPO), compares the innovation activities of 149 countries using several indicators. China was ranked 29th in the survey and the top performer among upper middle-income countries. China has invested heavily in innovation since the 2008 recession, and succeeded in improving the quality and efficiency of its innovations. In 2015, China ranked 18th for quality of innovations and 6th by innovation efficiency. To improve the efficiency of innovation activity, China needs particularly to improve its political, regulatory and business environments. The country’s GII rankings could further rise in coming years as the 2016–2020 five-year plan sees innovation as a source of growth.
China’s innovation policy, however, has been criticised for being protectionist. The US-based think tank, the Information Technology and Innovation Foundation (ITIF), reports that China’s “innovation mercantilism” strengthened last year. The ITIF defines innovation mercantilism as a national strategy where technology exports are promoted through protectionist measures.
Other BRIC countries posted much lower GII scores than China. Russia ranked 48, followed by Brazil at 70th place and India at 81st. Even if Russia slightly boosted spending on innovation activity after the financial crisis, its ranking has been stable in recent years. The ITIF also accused Russia of engaging in innovation mercantilism. Brazil and India also climbed in the country rankings in 2011–2015, but not nearly as fast as China.
Finland ranked sixth in the 2015 GII, down two places from 2014. Finland’s investment in innovation was particularly impressive (3rd out of 149), even if investment in innovation activity had not returned to the pre-2008-crisis levels. Finland came out on top in the survey in the “institutions” and “human capital and research” sub-categories. There was room for improvement in the innovation output (10th) and efficiency (41st) categories.