Flickr/Pere Tubert Juhe

[ZHENGZHOU AND BEIJING] For China to become a world leader in innovation, it should address regional differences and promote corporate input, according to a report by the Organisation for Economic Co-operation and Development (OECD).

The report, released this month (11 September), acknowledges that with spending on research and development (R&D) matching that of Germany, China is already a global player in science and technology.

But the country lags in innovation capability and performance compared to OECD countries with a similar level of R&D investment, although China ranked second in global publications levels in 2006.

According to the report, China's innovation system is not fully developed and inadequately integrated. It describes the system as an "archipelago", a large number of "innovative islands" with insufficient links between them.

Current regional patterns of R&D and innovation create too great a physical separation between knowledge producers and potential users, the authors say.

In addition, although foreign investment in China has increasingly contributed to innovation, the domestic business sector has been slow to make productive use of accumulated R&D investment, human resources for science and technology, and related infrastructure, the report indicates.

The Chinese government is looking to address this. For example, a recent study found that of 22 Chinese biotechnology firms investigated, all had received government funding (see Regulations 'hinder' China biotech investment).

But besides funding companies directly, "it is important for China to improve the framework conditions for innovation, which will contribute to building an innovation culture and provide the conditions and incentives for firms to shift their attention to innovation," Gang Zhang of the OECD Directorate for Science, Technology and Industry and one of the report's authors, told SciDev.Net.

And Feng Jun, president of Beijing Huaqi Information Digital Technology, a leading Chinese technology company, says the government has distributed its funding too evenly among companies, instead of focusing on a few to gain key breakthroughs.

Link to the executive summary of OECD report