International Technology Transfer to China: The Case of Biotechnology

Abstract

Since the early 1980s, the Chinese government has been driving the evolution of an endogenous innovation system. Various policies were adopted to foster the improvement of technological capabilities in the past two decades. The characteristics of the Chinese innovation system have been gradually reshaped. Such structural evolution affects the development of the Chinese biotechnology industry as well. The purpose of this study is to investigate the significance of the changes in the Chinese innovation system for biotechnology transfer. Three major trends have been discerned.\nFirst, the enhancement of a patent system has provided a vehicle for innovators to convert knowledge into marketable formats. Filing for patent protection is becoming an ordinary practice across industries. Second, the formalization of the business contract system has demonstrated great effect on the user-producer interactions between international biotechnology firms and their Chinese counterparts. Third, biotechnology research has become one of the most popular industries in China. Due to the increasing mobility of the research and development (R&D) workforce and the restructuring of the R&D financing scheme, scientists and engineers are able to work where their knowledge is valued and needed most. Also, the concentration of research manpower and funds may encourage the positive feed-back of China`s biotechnology innovation system. International technology transfer can be an effective strategy to engage this positive cycle.