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Innovation builds foundation for high-quality growth

21ST CENTURY BUSINESS HERALD | Updated: 2023-11-09 07:37
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A mascot of the 2023 WIC Wuzhen Summit is seen at the World Internet Science and Technology Museum in Wuzhen, Zhejiang province on Nov 7, 2023. [Photo by Gao Erqiang/chinadaily.com.cn]

China's high-tech industry investment increased by 11.4 percent year-on-year in the third quarter. In the first three quarters, the country's high-tech manufacturing industry and equipment manufacturing industry accounted for 15.3 percent and 32.9 percent of the overall added value of industrial enterprises above designated size respectively. As of the third quarter, the number of industrial enterprises above designated size was 478,000, an increase of 26,000 over the number at the end of 2022.

China is undoubtedly in a process of upgrading from low-end to high-end manufacturing through sci-tech innovation, otherwise it might have already entered the process of deindustrialization.

Not long after World War II, the United States fell into stagflation and faced competition from German and Japanese enterprises due to overcapacity and high-cost growth. The US relied on innovation to get out of that dilemma, with entrepreneurs being the main body of innovation.

However, innovation requires not only entrepreneurship, but also the support of knowledge and talents. The knowledge economy has become a key economic and industrial driver in the US ever since. Under the joint efforts of the US government and enterprises, with the integration of the entrepreneurial spirit and knowledge talent, the US has created an information technology revolution, with the high-tech industry as the leader of the "new economy". This has helped the US check its deindustrialization, and consolidated its leadership in the world.

China should learn from the development experience of the US, commit itself to seizing the historical opportunity of a new round of scientific and technological revolution and industrial transformation, and promote the expansion of digital, intelligent and green industries so as to overcome the middle-income trap and avoid deindustrialization.

To that end, Chinese enterprises should take advantage of the new technology revolution to upgrade their R&D, production and operation. The Chinese government should carry out institutional reform to pave the way for innovation in the fields of not only science and technology, but also finance, talent, education, intellectual property rights protection, etc, and increase the supply of new infrastructure. The pro-innovation strategies China has carried out over the past decade enable it to always keep its focus on making breakthroughs in key fields, so that it is not distracted by the changes and uncertainties in its external development environment.

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