The Changing Models of International Technology Transfer in China Zhou, Yuan (1); Xu, Guannan (2) 1: Tsinghua University, China, People's Republic of; 2: Beijing University of Posts and Telecommunications, People's Republic ofChina ABSTRACT In recent years, there have been some changes in technology transfer and cooperation activities that are different from traditional unidirectional technology transfer paradigm. This paper aims to explore the changing models of international technology transfer in China. This research examines the transfer of technology in three aspects: scientific knowledge, explicit technology, and tacit technology. Based on the network methods, we adopt a framework that integrates quantitative bibliometrics and patent analysis methods, complemented by qualitative enquiries with domain experts. Specifically, the research selects two emerging industries as representative cases: wind turbine and dye-sensitized solar cell. We find that the technology transfer models have experienced significant changes when considering scientific knowledge flows and industrial technology cooperation – the technology transfer models are different between these two emerging industries. The newer technology transfer models of dye-sensitized solar cell signify the rising innovation capacity of Chinese institutions which allows them to play more central roles in global innovation network. Keywords: international technology transfer; patent; bibliometrics; China 1 The Changing Models of International Technology Transfer in China INTRODUCTION Many scholars within innovation literature have looked at international technology transfer for innovation diffusion from a nation state perspective (Freeman, 1986; Nelson, 1993). In this context, China has been a recipient of transferred technology from developed economies such as the US and the European Union (EU) countries (Lema et al., 2015) for at least three decades. This followed the classical North-South technology transfer model involving Foreign Direct Investment (FDI), Overseas Development Aid (ODA), or a variety of measures for domestic absorption of foreign technologies. Many argue that the traditional technology transfer model has successfully helped China to build competitive manufacturing capacity as well as to catch up in many conventional industries (Urban et al., 2015). In many emerging industries the technologies are newly developed or even in its nascent stage, and still have uncertainties that need to be researched. In these cases, emerging countries may participate in early-stage research and contribute to global innovation communities with scientific inventions or industrial technologies – very different from cases in traditional industries where technologies are already well-established, and developing countries just adopt the mature technologies in a routine way. This is particularly true in emerging industries in China, where local players may no longer be passive recipients of well-developed technologies form developed countries. Rather, they engage in more knowledge-oriented cooperation in scientific research as well as industrial innovation with their partners in developed countries (Urban et al., 2015). These phenomena may bring new insights to the theory of international technology transfer and 2 cooperation, which has been intensively discussed since the early 1980s but with few fundamental changes (Ockwell and Mallett, 2012). In addition, there is even fewer literature that use multi-dimensional quantitative data such as integrated patent/bibliometrics to examine the technology transfer and cooperation for various industries, partially due to the scarce of suitable data and methodologies. This paper, therefore, attempts to fill these gaps by addressing the following questions: what are the new models of international technology transfer and cooperation for emerging industries in China? And how do the transfer patterns evolve? We will also explore what these differences in technology transfer and cooperation activities may tell us about the China’s changing institutional settings and rising capacity in emerging industries. Policy implications for technology transfer for developing countries will be discussed. The remainder of this paper is organized as follows. Section 2 provides a review of existing literature. Section 3 discusses our methodology. Section 4 conducts the case studies and cross-case analysis. Section 5 discusses the findings and draws conclusions. LITERATURE REVIEW: INTERNATIONAL TECHNOLOGY TRANSFER FOR EMERGING TECHNOLOGIES IN CHINA The term “technology transfer” encompasses the diffusion of technologies and technology cooperation across and within countries (Urban et al., 2015). 1 It considers “the process of learning to understand, utilise and replicate the technology, including the capacity to 1 Usually, the term technology diffusion describes a wider effect, which is not strictly related to the productive sector, whereas the term transfer and cooperation may suggest a more intentional approach (Costantini and Liberati, 2014). In this paper, however, we view both as synonymous. In addition, we follow Kogut’s argument that simple replication or reverse-engineering is NOT recognized as a measure of technology transfer/cooperation (Kogut and Zander, 1992) – it may indicate the unidirectional flow of technology, but in many cases it conveys incomplete knowledge with the loss of technical details and in an and inappropriate way. 3 choose it and adapt it to local conditions and integrate it with indigenous technologies” (Hedger et al., 2000:1.4), and particularly refers to the movement of knowledge among firms or sectors located in different countries. As aforementioned, developing countries requires additional conditions that transform the technology stock into development achievements. These may comprise absorptive capacity, institutional quality, as well as the sector-specific technological contents. Institutional setting may involve many aspects, such as the quality of governance, the degree of control of property rights, the degree of corruption, the height of transaction costs, the rules of law, and the political instability. In addition, there are also informal factors, such as caste, ethnicity and trust, and reputation. On the other hand, disparate sector-based technological contents may produce different effects in different context, so technology transfer patterns may vary across different sectors (Boschma and Iammarino, 2009) – this will be specifically explored in this study. Specifically, for emerging technologies in developing countries, there is a strand of literature highlights the global implications of a rising China (Kaplinsky and Messner, 2008) and discusses how innovation capabilities have been rapidly growing in developing countries. Awate et al. (2014) discuss about the catch-up strategies of emerging-technology firms in developing economies and conclude that this is fundamentally different to the firm strategies of developed countries. This has also influenced the thinking on technology transfer and cooperation in developing economies. Current literature highlights how historically Asian and European firms were engaged in different forms of technology transfer and technology cooperation and how Asian firms are increasingly catching up (e.g. Gosens and Lu, 2013; Zhou et al., 2015a; Lema et 4 al., 2015). Some literature also mentions how recently Chinese and European firms are engaged in new models of technology cooperation (e.g. Lewis, 2013). Though limited, some research tentatively explores most recent phenomenon of “Reverse” South-North technology cooperation, which can be defined as technology cooperation that is driven by emerging economies in the Global South that were formerly technology importers in an unidirectional way. According to Urban et al. (2015), there are four models: 1. the capital for the technology cooperation comes from emerging economies; 2. overseas market access is driven by firms from emerging economies, potentially opening up access to new markets; 3. Technologies are jointly developed by firms from emerging and developed economies; 4. The origins of innovation (such as patents and other IPRs) come from emerging economies. This paper, therefore, focuses on the latter two that concern about technological innovation, and explore whether these models do exist. METHODOLOGY As aforementioned, bibliometrics and patent analysis has been proved effective to examine the explicit knowledge flows across borders, while tacit knowledge flows may be detected by using qualitative enquires. In order to address our research questions (see Section 1), this paper develops a framework that integrates bibliometrics, patent analysis and qualitative interviews to analyze the new patterns of international technology transfer and cooperation for emerging industries in China. This framework focuses on three dimensions related to examining the technology transfer and cooperation of emerging-industry in China: (i) the scientific knowledge transfer/cooperation (indicated by bibliometrics co-authorship network); (ii) the 5 explicit technology transfer/cooperation (indicated by worldwide patent citation network); (iii) the tacit technology transfer/cooperation (studied by interviews and desktop research). In this study, two emerging industries have been selected as representative cases in China: Wind turbine industry, and Dye-sensitized Photovoltaic industry. The case selection was purposive rather than random. A theoretical