Universities/Research Institutes and Regional Innovation Systems: the Cases of Beijing and Shenzheni
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World Development Vol. 35, No. 6, pp. 1056–1074, 2007 Ó 2007 Elsevier Ltd. All rights reserved 0305-750X/$ - see front matter www.elsevier.com/locate/worlddev doi:10.1016/j.worlddev.2006.05.013 Universities/Research Institutes and Regional Innovation Systems: The Cases of Beijing and ShenzhenI KUN CHEN University of California, Berkeley, USA and MARTIN KENNEY * University of California, Davis, USA Berkeley Roundtable on the International Economy, USA Summary. — This paper explores the role of universities and research institutes (URIs) in the devel- opment of the Chinese economy through a comparison of the development of the Beijing and Shenzhen technology clusters. The two locations, while embedded in the same national innovation system, have exhibited completely different evolutionary trajectories. In the case of Beijing, the URIs have played an extremely important role in the development of largest high technology clus- ter in China. In contrast, in Shenzhen, which is now the third most important cluster in China, has in the last twenty years policy makers have consciously worked to establish and attract institutions of higher education. We suggest that the Chinese experience, though not without problems, pro- vides an interesting model for other nations with strong URIs. Ó 2007 Elsevier Ltd. All rights reserved. Key words — China, Beijing, Shenzhen, universities, clusters, research and development 1. INTRODUCTION firms (Kenney, 1986; Shane, 2004; Zucker, Dar- by, & Brewer, 1998). 2 It is now widely accepted that universities The discussions of high-technology regions and public research institutes (URIs) played a have focused on developed countries. 3 In the substantial role in the development of many cases of Taiwan (Saxenian, 2004) and India high-technology regions in the United States (Arora, Gambardella, & Torrisi, 2004), univer- and abroad (Bresnahan & Gambardella, sity research does not appear to have been a 2004). In the United States, the two most suc- significant contributor to regional growth thus cessful clusters of high-technology firms in both far; although in Taiwan the Information Tech- the information technologies and biotechnolo- nology Research Institute played an important gies are the Boston and San Francisco Bay role in the development of the Hsinchu areas, which are also the locations of the top Technology Park (Noble, 2000). In all of these four universities (Kenney & von Burg, countries, well-trained university graduates 1999). 1 The presence of global-class universi- ties in these two regions is partially responsible for their success. Their students often remained I‘‘Universities as Drivers of the Urban Economies in in the area and eventually became entrepre- Asia’’ sponsored by the World Bank and Social neurs, and the research conducted at their uni- Research Council (May 24–25, 2005). versities, at times, became the seed for new * Final revision accepted: May 18, 2006. 1056 UNIVERSITIES/RESEARCH INSTITUTES AND REGIONAL INNOVATION SYSTEMS 1057 were critical inputs. In the last decade, three IT ship of a commercial firm would invalidate its industry-based clusters, Beijing, Shanghai, and tax-exempt status—a line that private and pub- Shenzhen, have emerged in China. 4 This paper lic research universities have been unwilling to examines the role of URIs in the development cross. Thus, national laws and decisions pro- of IT clusters in Beijing and Shenzhen. We will vide the parameters for the actions of organiza- argue that in the case of Beijing, the URIs were tions such as universities. critical contributors, while in Shenzhen they The literature treats URIs as an endow- made no contribution. ment. Regions have excellent URIs or they Universities have long been considered do not. Beijing and Shenzhen are interesting important institutions in national innovation because Beijing is the Chinese city most en- systems (NIS) (Lundvall, 1992; Nelson, 1993). dowed with top-quality universities and re- Over the decades the university has been dele- search institutes (URIs), while Shenzhen only gated a variety of roles in addition to education 20 years ago had no URIs, yet it has experi- and research; these include public service, enced significant high-technology growth. As improving national competitiveness, helping an illustration, after Beijing and Shanghai, to ameliorate social injustice (e.g., affirmative Shenzhen firms are the recipients of the great- action), and regional economic development. est amount of technology-oriented venture The NIS perspective highlights the fact that capital (Zero-2-IPO, 2005). In contrast, Bei- countries organize innovation differently. Not jing had little in the way of industry, while unexpectedly, the role of universities in each Shenzhen was the earliest growth pole in the NIS differs significantly. The NIS perspective new export-oriented Chinese economy. Given has been criticized by scholars who have as- their different endowments, the development serted that innovation processes in industries trajectory of the two regions with respect to and regions differ even within the countries. 5 utilizing URIs diverged significantly. 7 As po- For example, Saxenian (1994) argued that the lar opposites, these two cities can provide in- institutions and entrepreneurship of Silicon sight into the deeply held belief by local Valley and Boston differed appreciably, some- officials throughout China that universities thing she attributed to cultural characteristics, are the fount of high-technology development rather than path dependent historical outcomes that will lead to prosperity. and different industry foci. 6 When discussing Chinese growth and statis- Though recognizing the importance of the tics, it is important to note that governmental NIS for understanding how innovation oc- statistics are often deceptive because officials curred in countries, geographers argued that are under pressure to meet targets and plans, innovation systems had a strong regional char- therefore there is a tendency to minimize the acter (Cooke, 1992, 2001; Storper, 1997). The negative and maximize the positive. The Chi- regional argument fits with the findings of econ- nese definition of ‘‘high technology’’ is very omists such as Jaffe, Trajtenberg, and Hender- broad and only some of the activities would son (1993) and Feldman (1993) that inventors conform to the commonly accepted definitions cite other patents originating in the same loca- of high technology in developed countries. In tion more frequently than patents outside the China, personal computer assembly is consid- location even when controlling for the existing ered ‘‘high technology’’, while few in the Uni- geography of related research activity. This ted States would define it as such. Because suggests that it might be profitable to consider firms considered to be in high technology re- whether there were regional innovation systems ceive tax and the other benefits, there are ulte- (RIS) that consisted of private and public rior motives for declaring oneself to be a high sector actors interacting to create local arrange- technology firm. In the case of Chinese tech- ments and relationships encouraging innova- nology parks, Cao (2004) in a withering anal- tion (Doloreux, 2003; Edquist, 2004; Wolfe, ysis finds that the government, though 2003). emphasizing innovation, has in practice been The linkages between the NIS and various more interested in simple quantitative statistics RISs are often omitted or assumed by those such as rates of growth, numbers of firms, and studying regions (Niosi, 2005). The NIS is value of exports. In the case of Chinese patent important because it sets the basic parameters statistics, it is generally accepted that many of for what is possible. For example, in China uni- them are of dubious merit, and also an versities can own profit-making firms, while in increasing number of them are filed by foreign the United States a university’s direct owner- firms seeking protection in China, and thus are 1058 WORLD DEVELOPMENT not Chinese in origin. Where possible we use section begins with a discussion of the historical data from other sources, however often Chi- background within which the Chinese URIs nese government data is all that is available. evolved. Though the number and quality of what is counted is suspect, it is likely that the trends do represent an underlying reality. 3. THE CHINESE CONTEXT Until approximately the 15th century, China 2. LITERATURE REVIEW was the global technology leader. With the rise of Western Europe, China increasingly lagged The literature broadly defines the NIS as a behind Europe and later the European settler network of institutions, policies, and agents states, particularly the United States, in the supporting and sustaining scientific and techni- development of new technology and economic cal advance (Crow & Bozeman, 1998; Furman, growth. The reasons for China’s decline are Porter, & Stern, 2002; Nelson & Rosenberg, not certain, however by the 19th Century China 1993; Porter & Stern, 2001). In knowledge no longer played a significant role in the global economies, URIs are vital actors in the crea- economy; nor was it a contributor of new tion, acquisition, dissemination, and utilization technical or scientific knowledge (Adas, 1989; of knowledge (Nelson & Rosenberg, 1993). Mokyr, 1992; Needham, 1954). Three core actors to an NIS are URIs, industry, In 1895, China established its first Western- and government (Etzkowitz, 1999; Mowery & style university in Tianjin. This was followed Rosenberg, 1993). in quick succession