Lauren Dudley is a research associate in Asia Studies at the Council on Foreign Relations.
China has worked aggressively in recent years to upgrade its domestic innovation system as technology plays an increasingly significant role in great power competition. These measures, including a range of industrial policies to develop industries like artificial intelligence (AI), biotechnology, high-end manufacturing, new-energy vehicles, and 5G, seek to establish China as the global technological superpower by 2049. But while China is beginning to lead in some of these industries, misguided research incentives in Chinas innovation ecosystem have limited its innovation potential to date. Quantity crowds out quality.
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Technology and Innovation
The Chinese innovation ecosystem suffers from its quantity-based evaluation system, which informs how research grants, promotions, bonuses, and other professional awards are distributed. Researchers are judged on the quantity of papers they publish, SCI credits and impact factors (which measure the impact of scientific work based on the number of citations) they receive, and patents theyre awarded. These are imperfect measures of creativity and originality, and the focus on output consequently discourages researchers from taking on risky projects that are more likely to lead to significant technological breakthroughs.
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Chinese patent application data clearly represents this phenomenon. Because Chinas evaluation system rewards researchers who have the most patents, researchers are incentivized to submit patent applications for slightly modified versions of existing technologies or processes, known in China as utility patents. These modifications often only reflect small changes in the product but take less time, have a faster patent application processing time, and are more likely to receive a patent than more innovativeand time-consumingresearch projects. Domestic patent data for basic electric elements, processes that involve a single technical step like drying or coating, reflects this. In 2018, 79 percent of scientists who applied for a utility patent in basic electric elements received a patent. On the other hand, only 30 percent of applicants received invention patents in the same category.
Quantity-over-quality research incentives also explains why China lacks strong results in basic researchthe pursuit of discoveries that radically change our understanding of existing scientific conceptsdespite the Chinese governments recognition that basic research has become central to international competition, opened new fields, and led to many new innovations. Researchers who must publish or perish are unlikely to take on high risk, high reward basic research projects. As a result, only 5 percent of Chinas R&D funds are spent on basic research.
The Chinese Ministry of Science and Technology (MOST) and Ministry of Education (MOE) have found that in part as a result of these incentives in Chinas research system, there is a lower level of innovation in China than in other countries. This presents a major problem for China as it seeks technological supremacy in strategic industries. In response, the MOST, MOE, and other science-related Chinese government offices have released a series of policies in the past two months to realign research incentives and improve Chinas innovation ecosystem.
In February, the Chinese government published a plan to begin a one-year trial to improve the science and technology research evaluation system. This policy aims to shift the emphasis away from the quantity of researchers achievements and reorient it towards the quality, contribution, and impact of their findings. It will also reward researchers who contribute to Chinas strategic goals. While the policys language is broad and its proposed system unclear, it states that evaluation systems should be adjusted so that projects with important applications gain 10 percent relative to other projects, projects with strong academic impact gain 30 percent, and projects that make important contributions to Chinas economic and social development or national security gain 50 percent. And if universities do not reverse their tendency to focus on essays, job titles, academic qualifications, and awards when evaluating people and teams, the Chinese government threatens to suspend their access to national science and technology project funds.
More on:
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Technology and Innovation
Authorities also laid out similar changes to the patent evaluation system. Noting the tendency of Chinese researchers to submit many patent applications for insignificant changes to existing technologies or processes, the Chinese government has instructed universities to continually evaluate projects throughout their lifecycle so that their results are oriented towards outstanding transformations and changing capabilities.
Finally, for researchers to achieve these outstanding results, the Chinese government has called on universities to better encourage basic research. A work plan released by a group of Chinese government departments calls on universities to increase their support of scientists that have the courage to challenge the most cutting-edge scientific problems [and] come up with their own unique innovations. Beyond promoting basic research, the policy also calls on universities to encourage free exploration, give researchers more academic autonomy, and create a research environment that is brave enough to tolerate failure. With this mantra in mind, the Chinese government will expand financial support for research in basic disciplines such as mathematics and physics and strategic technologies including AI and smart manufacturing.
In effect, the Chinese government is realigning incentives so that more researchers will contribute to Chinas plan to develop core technologies, meet national strategic needs, and form first-mover advantage in emerging industries. If implemented as planned, China will be a step closer to becoming the global leader in emerging technologies, posing a significant challenge to the United States continued commercial success and national security.
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