Strategies of innovation

Protection of intellectual property rights could help China grow its own technologies and domestic brands.

Whether or not China can realize its ambitious strategy of developing itself into an innovative and creative nation will be decided to a large extent by whether it can boost the competitiveness of its homegrown technologies, its cultural power and the influence of domestic brands.

To facilitate this process, the country needs to take more concrete and effective measures to strengthen protection of its intellectual property rights (IPR) and innovation.

The country should look at the remarkable achievements of its manufacturing sector in a cool-headed manner. In 2010, China ranked as No 1 in the world in terms of the manufacturing volumes of a variety of products, but that does not mean that the country is a global manufacturing power.

Despite its ever-expanding manufacturing scale in recent years, the productivity of China's manufacturing sector is still at a generally low level.

China's manufacturing generally lies at the middle- and low-end of the global manufacturing chain. Statistics show that the value added by China's labor is only $1,790 per person a year while it is 6.5 times higher in Japan and 10.2 times higher in the United States.

To extricate itself from this position, China should make unremitting efforts to accelerate its much-needed industrial restructuring, develop some new industries and try to improve and enforce a stricter patent system. That means the country should not only focus on expanding the quantity and scale of its patents, but it should also try to improve their quality and utilization efficacy, particularly core patent technologies.

To this end, more effective measures need to be taken to raise the proportion of the country's scientific research input to its gross domestic product (GDP), which was only 1.7 percent in 2010, slightly higher than the world's average of 1.6 percent.

In some other innovation-focused nations, research input, accounts for 2 percent of their GDP. In the Republic of Korea (ROK) this proportion is as high as 3.1 percent.

While trying to increase its ratio of research input to GDP, China must also strive to convert more of its scientific and technological research into practical applications. Currently, only about 25 percent of technological research has been used for industrial or market purposes in China, much lower than the 60 to 80 percent average in some developed countries.

China should try to improve the contribution of its scientific and technological innovations to the growth of its GDP. The developed countries have relied much on technological progress for their growth.

In today's international arena, competition among different countries mainly lies in soft power competition, a new concept that includes their national cohesion, the attractiveness of their social system and cultural influence.

As an important means of boosting its soft power, a country's cultural influence can be boosted through raising the innovativeness and competitiveness of its cultural sector.

To boost China's cultural influence, a rigid and binding copyright system is desperately needed to guarantee and facilitate the realization of these goals. This is common practice in countries with a booming cultural industry.

China's intellectual property imports still outnumber its exports, highlighting the urgency for the country to take some effective measures to develop itself into an intellectual property heavyweight.

China should try to increase the amount of its cultural products in the international market to change the West-dominated international cultural scene.

Currently, the US has more than 43 percent of the world's cultural market and European countries 34 percent, Asian and South Pacific countries have only 19 percent. Of the market share among Asian and Pacific nations, Japan has 10 percent and the ROK 3.5 percent.

At the same time, China should take more effective measures to promote the growth of domestic intellectual property and raise its contribution to GDP.

Compared with the rest of the world, China's intellectual property has been developing at a relatively slow rate. The sector's contribution to the country's GDP growth, at 6.7 percent, is also at a lower level. The proportion in the US is 25 percent, in Japan 20 percent and in European countries 15 percent.

China needs to try and boost the influence of domestic brands in overseas markets and change its long-formed image as a low-end processing workshop.

The author is president of Zhongnan University of Economics and Law and also director of its Center for Studies of Intellectual Property Rights.