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Analysis and Strategy Research on Regional Technological Innovation Capability Difference* ZHANG Jingqiang 1 2 XIA Enjun 1 1.School of Management & Economics, Beijing Institute of Technology, P.R.China,100081 2. School of Economics & Management, North China University of Technology, P.R.China,100144 [email protected] Abstract: According to the comparative analysis o n the economic development condition and industrial structure of china’s 4 regions, this paper draw a conclusion that technological innovation capability is proportional to the level of regional economic development, and also it analyzes the reasons for regional technological innovation capability difference from several aspects such as district factors, natural resource endowment, technological diffusion and so on, then proposed some strategies and advices on how to promote regional technological innovation capability. Key words: Region, Technological innovation capability, Difference, Strategy 1 Introduction Owing to ‘government work report on the 2nd meeting of the tenth National People’s Congress’ and ‘the Eleventh Five Year planning outline on National Economy and Social Development’, it divides our 31 provinces into 4 large economic regions, of which 10 in eastern region , 6 in central region, 12 in western region and 3 in northeast region. So under new regional pattern, researching on technological innovation capability can accelerate regional technological diffusion, promote industrial gradient shifts, optimize industrial structure, thus help to promote harmonious development of regional economy. 2 Comparing regional economic development condition and industrial structure Since the 21st century, our macro-economy (including growth speed and economic output) has comparatively rapid development momentum. Based on the analysis of 4 economic plates during 2000 to 2006, eastern region is still the one which has a highest growth of economy, of which average increasing speed of regional GDP reaches 11.53 ,while western region follows,10.23 , then the central region and northeast region, 10.22 and 10.17 respectively. According to the ratio of industrial added values to GDP, the proportion of industrial added values of primary industry to GDP decreases somewhat, while the proportions of secondary industry and tertiary industry increase (table 1).Regard to economic development condition, the proportion of industrial added values of secondary industry to GDP has grow slowly. Except eastern region in 2004, all the other regions have slow growth during the period. This situation relates to the recent-year industrial policies of our country, especially since 2000, our country do not only keep industrial development speed ,but also accelerate development of tertiary industry. Owing to table 1, the proportion of industrial added values of tertiary industry to GDP has greatly increased in 4 regions during 2000 to 2006. % % % % ( ~ ) Table 1 the ratio of Three Major Industries of 4 regions to GDP 2000 2006 years 2000 2001 2002 2003 2004 2005 regions industries primary industry 11.51 10.95 10.12 9.13 8.92 7.9 eastern secondary industry 49.07 48.73 49.01 51.42 53.26 51.56 region 40.87 39.45 37.82 40.55 tertiary industry 39.42 40.32 、 * Supported by PHR(IHLB) and Scientific Research Fund of NCUT. 213 % unit: 2006 7.27 51.95 40.79 primary industry 20.24 19.41 18.49 secondary industry 44.59 44.9 45.58 tertiary industry 35.17 35.69 35.93 primary industry 22.26 21 20.05 western secondary industry 41.51 40.72 41.31 region 38.65 tertiary industry 36.23 38.28 primary industry 12.92 12.82 12.8 northeast secondary industry 51.45 50.06 49.69 region 37.51 tertiary industry 35.62 37.11 Data source China economic yearbook 2001 2007 【1】 16.82 46.77 36.41 19.39 42.85 37.76 12.38 50.75 36.87 central region : ( ~ ) 17.83 47.68 34.49 19.17 44.5 36.33 12.68 51.63 35.69 16.67 46.77 36.56 17.69 42.79 39.52 12.79 49.62 37.59 15.3 48.5 36.2 16.18 45.23 38.58 12.11 50.77 37.12 In 2006, there are two new trends for economic growth, moving from south to north and from east to west. City Group Economy has a faster development in Beijing-Tianjin-Hebei and Shandong peninsula eastern region than that in Pearl River Delta and Yangtze River Delta. The increasing tendency of western region is on the top of the 4, and enlarging trend of the regional economic growth gap slows down. Table 2 shows the basic economic development condition of 4 regions in 2006. Table 2 basic economic development condition of 4 regions in 2006 unit: billion yuan, yuan per person added values added values added values Structure of Regional per total of primary of secondary of tertiary Three Major capita GNP region Regional industry industry industry Industries output value Whole country 23105.334 2474.025 11564.641 9066.668 1:4.67:3.66 16084 (16.45%) (16.81 ) 7.55 (19.32 ) 14.56 eastern region 12859.306 934.333 6679.810 5245.163 1:7.15:5.61 27419 16.98 7.62 17.87 17.68 15.71 central region 4321.800 661.410 2095.860 1564.530 1:3.19:2.36 12260 16.08 6.60 20.36 14.93 15.92 western region 3952.710 639.610 1787.960 1525.140 1:2.80:2.38 10932 18.01 7.96 24.76 15.22 17.42 18221 northeast 1971.517 238.672 1001.010 731.835 1:4.19:3.07 region. 14.34 15.02 8.85 17.69 13.60 source Chinese statistical yearbook,2007 [2] : ( ( ( ( % %) %) %) %) ( ( ( ( ( %) %) %) %) %) % %) %) %) %) ( ( ( ( ( ( ( ( %) %) %) %) ( ( ( ( ( %) %) %) %) %) : explanation (1) The numbers in brackets are the increasing speed of different regions last year. (2) For some reasons, the total amount of the added values of Three Major Industries does not equal to that of the whole country, so take the total amount of 4 regions as national amount when calculating. As the one which owns most powerful economic strength, the GDP of the eastern region account for 55.7% of the whole country, increased by 16.98% , which is higher than that of central region northeast region and average level of the whole country. And added values of secondary industry account for 57.8%, increased by 17.87%, slightly higher than that of northeast region. While added values of tertiary industry account for 57.9%, increased by 17.68%, which is on the top of the 4. Its economic structure has further optimization, and per capita GDP which is higher than northeast region, is 1.7 times that of the whole country. Obviously, economic strength of central region is not as good as eastern one. Central region, which has 27.3% population of the whole country, contributes 18.7% to GDP. The added values of primary industry, secondary industry and tertiary industry are respectively 26.73%, 18.2% and 17.26%. It is clear that the advantage of central region is the primary industry, and regional per capita GDP is 0.76 times that of the whole country, even lower than average level. Economic strength of western region is also weaker than that of eastern one, but since the implementation of western development, the economic growth rate of western region and the level of economic growth are both on top of the country. In 2006, western region contributes 17.1 to GDP increased by 18.01 , while per capita GDP is 0.68 times that of the whole country, increased by 17.42 . And The added values of primary industry, secondary industry and tertiary industry are respectively 、 % % % 214 , 7.96%, (higher than average level) 24.76%, (5.44% higher than average level) and 15.22% (slightly lower than average level). Nowadays, northeast region is in the period of transferring from traditional industry to modern one. In 2006, it contributes 8.5% to GDP, still keeping a downward trend, although it increased by 15.02%, the rate is still the lowest in 4 regions. However, its per capita GNP is 1.13 times that of the whole country, higher than central region, western region and average level. Connotation of regional technological innovation capability shows that besides increasing material, manpower and financial inputs, technological innovation also need certain economic growth as support, meanwhile the output of technological innovation can accelerate regional economic growth in future. Thus, regional technological innovation capability interacts regional economic growth. Owing to the comparatively analysis on the economic development condition and industrial structure of 4 regions, we can conclude that economy-developed eastern region has the best technological innovation capability, while the other 3 regions ,of which the economy does not develop as well as that of eastern region, has correspondingly not very good technological innovation capability. According to the data from table 3, it can further analyze the correlation between regional technological innovation capability and regional economic growth. Talbe 3 comparison of different regions’ technological innovation in 2006 region R&D funds Ratio between Numbers of Export Actual Amount Technology expenditure utilizing Market volume R&D funds patent billion of authorizatio foreign capital of business billion expenditure dollar n thousand billion dollar billion dollar and GDP yuan Whole 300.28 1.42 223.9 968.93 105.9 174.30 country 22.56 30.48 12.35 eastern 205.04 1.59 152.6 862.35 76.94 133.25 region 24.33 1.12 32.81 26.85 21.02 15.77 central 36.12 0.84 20.7 32.71 13.06 14.74 region 30.96 0.59 31.01 39.73 28.82 0.78 western 35.75 0.90 22.1 34.11 6.51 15.17 region 14.55 0.63 36.93 32.41 42.14 9.14 northeas 23.37 1.19 13.4 39.76 9.39 11.17 t region 9.77 0.84 20.72 24.33 (49.98 ) 1.24 Explanation: (1)The data source of R&D funds expenditure is Bulletin of Statistics for R&D funds expenditure in 2006. (2)The numbers in brackets respectively show the increasing speeds of R&D funds expenditure, Ratio between R&D funds expenditure and GDP, Numbers of patent authorization, Export, Actual Amount of utilizing foreign capital and Technology Market volume of business. (3) Numbers of patent authorization contain 15.1 thousand cases from Hongkong and Macao. (4) Actual Amount of utilizing foreign capital of the whole country (105.9 billion), which comes from Bulletin of Statistics, does not equal to the data published (69.47 billion), so use the total amount for calculating. ( ( ( ( ( ( ) %) %) %) %) %) ( ( ( ( (%) ( ( ) ( ) ( ) ( ) ( ) %) %) %) %) %) ( ) ( ) ( ) ( %) ( %) ( %) ( %) ( %) ( %) (- %) ( %) ( %) ( %) ( %) % (- %) From table 3,we can see that in 2006, eastern region did greatly better than others in seven aspects including R&D funds expenditure, Ratio between R&D funds expenditure and GDP, Numbers of patent authorization, Export, Actual amount of utilizing foreign capital, Technology market volume of business and technological innovation capability. Although the increasing speed of central region’s R&D funds expenditure is on top of the 4, which reaches 30.96%, absolute number of R&D funds expenditure is just 0.176 times that of eastern region. Meanwhile, the export demand has completely improved, and volume of export in 2006 increased by 39.73%. Also it has the rapidest growth in actual amount of utilizing foreign capital, which reaches 49.98 . According to the analysis above, regional technological innovation capability has the close connection with the regional economic growth level. They do not only interact, but also mutual restrict. Technological innovation capability is the source power of regional economic development, and it also needs financial resources as support, which has been proved in eastern coastal area . Therefore, there is a positive correlation between technological innovation capability and economic growth level, that is, higher economic growth level, better technological innovation capability. % 215 That the economic growth level of 4 regions is irregularity, gives birth to the differences of technological innovation capability. Thus the author deems that it is necessary to analyze the reason for differences of technological innovation capability from economics, so as to combine technological innovation capability organicly and become the decisive power of accelerating regional economic development 3 Analyzing reasons for differences of regional technological innovation capability (1)District factor Since Reform and Opening, economy becomes the work focus of various work.And that whether in favor of attracting investment, becomes the primary standard for judging district factor [3]. Based on Alfred·Weber’s district theory, where we can get the lowest transport mileage and cargo weight for production and distribution is the ideal position. For natural geographical position and district advantage, eastern area of our country becomes the focus of foreign investment. What’s more, because of the policy advantage, eastern coastal area develops rapidly in short time, and the gap between eastern area and western area becomes larger and larger. (2)Natural resource endowment difference That natural resource endowment difference and the difference in exploration and utilization modes of natural resource, give birth to regional economic gap. Eastern coastal area, where most areas are plain, is fit for large-scale industrial development. What’s more, many coastal ports make material import and products export conveniently. On the contrary, western area which is mountain area with bad traffic facilities is not fit for large-scale industrial development. Because of the limit of Human resource, material resource and financial resource, though there are abundant natural resources in mountain area, exploration and utilization of natural resources can not be as convenient as that done in eastern area. Since Reform and Opening, the nature of capital (chasing interest) and ‘Polarizing effect ’or ‘Refluxing effect’ of eastern area all accelerate polarizing flow of capital and labor in western area. Because of the better investment chance in eastern area and ineffective utilization of capital for lack of talents in western area, limited capital of western area flowing into eastern area by intermediary of capital market. This further hinders the technological infrastructure, thus enlarge the gap of technological innovation capability. (3) Difference of industry structure effect Regional industrial structure is a industrial constitution within certain economic space, a total of the relations between the industries and their proportions and other relationships. The regional industrial structure is constantly changing with different development stages of regional economic, and has important impact on the regional economic development. After a long-term study economists found that: With the regional economy continuously promotes, the labors gradually transfer from primary and secondary industries to tertiary industry. Both the western developed industrial countries and developing countries, economic underdeveloped regions have a common characteristic, that is, in the territorial division of labors and regional competition, there is a comparative disadvantaged industrial structure and the economic efficiency is not high. In western China, the primary industry still occupies a large proportion in the regional industrial structure, according to the theory of U.S. development economist Alexander Gerashchenko, in an economically backward country or region, the positive effect that industrial development promoted by agricultural is weak. It could hardly expand industrial markets though raising agricultural productivity. In fact, any region that has strong technological innovation capability must have developed secondary and tertiary industries (especially the tertiary industry). Since reform and opening, eastern region has gradually formed the economic development mode which takes secondary and tertiary industries as the main. Figure 1 shows added value ratio of three major industries in China's four major regions against the total in 2006. 216 0.7 0.6 Eastern region 0.5 tn ec 0.4 re p 0.3 Central region Western region Northeastern region 0.2 0.1 0 primary industry secondary industry tertiary industry Figure 1 Added value ratio of three major industries in China's four major regions against the total in 2006 From Figure 1, it can be seen that eastern region has very rapid growth in the secondary and tertiary industries. This has a direct relationship with its strong strength in science and technology and more technical input. But in the western region, due to weak socio-economic foundation and low technical and management standards, the conversion efficiency of the industrial structure is low, resulting in relatively slow growth of the secondary and tertiary industries in the western region. (4) Difference of science and technology input Achieving technological innovation relies on certain strength of science and technology. To a large extent, technological innovation capability of a region depends on science and technology strength of this area. To enhance science and technology strength, it is necessary to increase scientific and technological input, including input of scientific and technology funds and professionals. As a variety of reasons, the east-west gap is large in science and technology input, which is an important factor of technological innovation ability difference between east and west, as Table 4 shows. Table 4 comparison of science and technology input of China's four major regional in 2006 unit: person, billion yuan science and R&D science and Local government fixed assets technology personnel personnel technology funds capital input input eastern region 2268986 229365 374395.01 5985991 5463.71 central region 767627 74297 82896.76 1198419 2089.66 western region 717507 118077 77995.45 2335471 2199.69 northeast region 377437 40068 40443.83 683292 1052.00 Data source: China statistical yearbook on science and technology (2007)[4] and China Statistical Yearbook (2007) [2] From Table 4, we can see that the science and technology personnel ratio of the east and the west is 3.16:1; R & D personnel ratio is 1.94:1, science and technology funds ratio is 4.8:1, local government capital input ratio is 2.56:1, and fixed assets input ratio is 2.48:1. Due to natural geographical location, the eastern coastal areas has enormous advantages in attracting foreign investment than the central and western regions, which directly resulted in the huge gap of total foreign direct investment, and widening the technological innovation capability gap between eastern and western regions. As to direct foreign investment using, according to related statistics, in 1998 the actual utilization of foreign investment in the western region amounted to 1.374 billion dollars, accounting for only 3.0% of the total foreign investment (45.284 billion U.S. dollars), lower than Guangdong, Jiangsu, Fujian, Shanghai, Shandong, Beijing, Tianjin etc., the eastern part provincial or municipal level, or equivalent to only a province of Hebei, Zhejiang’s level, as table 3 shows. In 2006, the actual utilization of foreign investment in the western region amounted to amounted to 6.51 billion U.S. dollars, accounting for 6.1% of the total foreign investment (105.9 billion U.S. dollars), increased by 3.1 percentage points compared to 1998. But considering area ratio and the population proportion of the western region against the country's total, this ratio is obviously very small. And the total FDI using 217 of the 12 western provinces is lower than in any cities of Guangdong, Jiangsu, Zhejiang, Shanghai, Fujian, Shandong, as Table 5 and 6 show. Table 5 1998 the provincial foreign investment (FDI) situation Eastern utilization of FDI amount Eastern utilization of FDI amount provinces/cities provinces/cities billion dollars billion dollars Beijing 2.168 Guangdong 12.020 Tianjin 2.114 Fujian 4.212 Shanghai 3.602 Zhejiang 1.318 Hebei 1.429 Jiangsu 6.632 Shandong 2.203 Hainan 0.717 Nation utilization of FDI amount 45.284 billion dollars; utilization of FDI amount of 12 western provinces: 1.274 billion dollars Data source: China Statistical Yearbook (1999) [5] ( ) ( ) : Table 6 The provincial foreign investment (FDI) situation in 2006 Eastern utilization of FDI amount Eastern utilization of FDI amount provinces/cities provinces/cities billion dollars billion dollars Beijing 4.55 Guangdong 14.51 Tianjin 4.13 Fujian 7.19 Shanghai 7.11 Zhejiang 8.89 Hebei 23.8 Jiangsu 17.43 Shandong 10.00 Hainan 0.75 Nation utilization of FDI amount 105.9 billion dollars utilization of FDI amount of 12 western provinces: 6.51 billion dollars Data source: Annual Report on China’s Regional Economy 2007—2008 [6] ( ) ( : ; ( ) ) The bottleneck restricts the capital investment of the technology infrastructure capabilities in the western region. Outdated technology infrastructure and the shortage of science and technology funding, make it difficult to attract and retain high-tech talents, many districts have emerged talents shortage phenomenon. (5) Difference of the technology diffusion effect Technology diffusion extent difference is also an important performance of regional technological innovation capability difference. Especially in the western region industrial base is relatively backward, basic research and technical knowledge reserves are weak, technology diffusion should be paid more attention. Technology contract transaction volume is a good measure standard for technology diffusion effect. Table 7 presents technology contract transaction volumes of China's four major economic regions from 1999 to 2006. Figure 2 gives technology contract transaction volumes ratio against the country’s total of China's four major economic regions from 1999 to 2006. Table 7 technology contract transaction volumes of China's four economic regions from 1999 to 2006 Region Nation Eastern region Central region Western Year region 1999 52341.23 30504.07 7823.70 8391.81 2000 65075.19 41672.30 9100.23 8586.77 2001 78274.89 52528.69 9866.35 9797.09 2002 88417.13 59921.91 10278.59 11103.06 2003 108467.28 73750.26 11780.68 14649.75 2004 133436.30 94360.33 13174.83 16036.82 2005 155136.94 115097.40 14847.14 13892.28 2006 174340.83 133249.73 14742.65 15175.77 Data source: China Statistical Yearbook (2007) [2] 218 unit: million Northeastern region 5621.65 5715.89 6082.76 7113.57 8286.573 9864.32 11300.13 11170.94 0.9 0.8 0.7 0.6 tn ec 0.5 erp 0.4 0.3 0.2 0.1 0 Northeastern region Western region Central region Eastern region 1999 2000 2001 2002 2003 2004 2005 2006 year Figure 2 Technology contract transaction volumes ratio against the country’s total of China's four economic regions from 1999 to 2006 From Table 6 and Figure 2, we can see that technology contract transaction volume of each area increased year after year with the passage of time, technology contracts in the volume of transactions, but only the technology contract transaction volume ratio of eastern region against the nation's total continuously increased with time. As to the central and western region and northeast region, although the absolute volume of technology contract transaction increased, but the ratio has decreased year by year, and technology contracts transaction volume ratio of the eastern region was 5 times of central and western region’s. Therefore, due to technology contract transaction volume difference has caused the difference of the technology diffusion effect, it also caused the difference of technological innovation capability. (6) Difference of policy China's technological innovation capability regional difference is not only affected by the above factors, but also affected by policy system. The policy system impact on regional economic development differences mainly has three aspects: First, since reform and opening, the country implemented different policy system in different regions, economic and social development of every region faces different system environment. Second, due to the regional economic and social basis differences, the same policy system arose different policy effects in different regions. Third, within their terms of reference in every region, the policy implemented is different. With the deepening of reform and opening, the eastern region won the investment, taxation, and financial policy advantages etc. with its unique geographical advantage. The establishment of special economic zones and open coastal cities made the eastern region's economic development has got a fast speed. Its development has been faster and better quality. Since the CPC’s “16th National Congress” brought forward the policy of promote the harmoniously development of regions, the central and western region and northeast region have implemented a large-scale western development, central rise, revitalize the old industrial base of the northeast strategy, and achieved great results. This played an important role in narrowing regional development gap, expanding domestic demand, improving macro-control, and establishing a harmonious society. In the “10th Five-Year Plan” period, average annual GDP growth rates of the eastern, central, western and northeastern regions were 12.35%, 10.86 %, 11.12%, 10.87%, compared with the "9th Five-Year" period, the economic development rate of the western region increased 2.32 percentage points, and exceeded the central and northeastern region's economic growth rate. Taking a wide view of the four major regional economic development, as to the pace of development, the gap between eastern and western region is gradually narrowing. But from the economic aggregate, the eastern and western region economic gap continues to expand, and exposes a lot of problems, mainly in : Further deterioration of the ecological environment, regional economic and demographic imbalances, economic and resource space distribution imbalance, economic and social development gap continuing to widen, more and more intense regional competition, the legal system promoting coordinated regional development incomplete, and so on. 219 4Strategies and recommendations on narrowing regional technological innovation capability difference From the previous analysis we can see that, compared with the eastern region, central and western regions technological innovation capability is significantly low. To narrow the technological innovation capability gap between eastern and western regions, the central and western regions should adhere to the scientific and technology are primary productive force's guiding ideology, adhere to corporate independent innovation, to promote production with science and technology, and enhance core competitiveness of the products, promote regional the whole economic strength upgrade. Concretely there are the following aspects to proceed: (1) Integrate resource advantages, accelerate scientific and technological system reform Because of the geographical location, natural resources and regional policy differences, China's four major regional technical facilities constructing, the use of technical resources, technical capacity development, etc. formed huge differences. This directly leads to the technological innovation inputs, outputs differences in each region, and thus formed a difference in technological innovation capability. Central region is agricultural products distribution center in China, the western region is rich in mineral resources, and northeast region is China's old industrial base. To narrow economic development gap with eastern region, the three regions have their own resource advantages and technological innovation point, therefore to speed up the science and technology management system reform of central, western and northeastern regions, upgrade their own scientific and technological advantages, enhance their technological innovation capacity, is an important way to narrow regional differences of technological innovation capability. (2) Increase technological innovation input, promote regional technological innovation capability Enterprises are the mainstay of technological innovation. To strengthen the dominant position of enterprises in technological innovation is the fundamental way to enhance regional technological innovation capability. At present, the technological innovation input and output indicators of central and western regions enterprises lag far behind the east. So to upgrade their technological innovation capacity must increase investment in science and technology, optimize the innovation environment to enable enterprises to truly become the mainstay of technological innovation. At the same time, government departments should increase financial and tax preferential policies, guide and support enterprises to invest in innovation. (3)Optimize the regional industrial structure, promote industrial gradient transfer Since implemented the large-scale western development, central rise, revitalize the old industrial base of the northeast strategy, the central and western regions and the northeast region's economic growth rate has been growing relatively rapid, but still have a large gap with the eastern region in gross economy development. In 2006, the secondary industry added value growth rates of central and western regions were higher than the national average, but because of its weak industrial infrastructure, there is still a wide gap with the eastern region in gross economic development, which has a direct impact on whole technical innovation capability upgrade of central and western regions. Due to strong industrial infrastructure, the secondary and tertiary industries economic aggregate of the northeastern region is much higher than the economic aggregate of central and western regions. Therefore, narrowing regional differences of technological innovation capability, the central and western regions should actively undertake foreign investment and industries transfer of the eastern region, optimize the industrial structure, promote technological innovation capability enhancement. (4) Enhance the capability of technology diffusion, promote production and research cooperation The four regional technical contract transactions volume from 1999 to 2006 shows, the differences 220 between regions is very large: the technical contract transaction volume proportions of the central, western and northeast regions decline every year, while the eastern region proportion increases year by year, which directly resulted in inter-regional differences in of technological innovation capability. Therefore, the central, western and northeast regions should strongly strengthen the technology market and system building, develop and nurture intermediary institutions, further develop communion and mutual cooperation among the innovation mainstays through enterprise clusters development strategic, promote innovation resources, elements and results flow. In addition, to further strengthen the exchanges and cooperation of colleges, universities, research institutions and enterprises, and promote cooperation in production and research should also be proceeded. (5) Complete technical innovation system, improve regional technological innovation capability comprehensively Construction and improvement of regional technological innovation system is an important part of building a national innovation system, it plays an important role in connecting link between the preceding of the national innovation system. To enhance regional technical innovation capability, we must rely on the resource advantages of higher colleges and scientific research institutes, optimize science and technology resources, strengthen production and research cooperation, promote the transformation of scientific research, accelerate building regional technological innovation, occupy technology and industry commanding heights, to comprehensively enhance the regional technological innovation capabilities. 5Conclusion Through comparing the differences of four regional technological innovation capability, we find that the east region has always been the leading position of the economic development and its technological innovation capability is much more higher than the middle region, west region and north-east region. In order to decrease the gap of economic development between east and west region, the middle region and the west region must increase technological innovation input, enhance the capability of technology diffusion, Optimize the regional industrial structure, strive to undertake foreign investment and industries transfer of the eastern region, improve regional technological innovation capability comprehensively. References ~ ~ ~ ~ [1] China economic yearbook (2001 2007), China statistics press, 2001 2007:389 401. [2] China statistical yearbook (2007), China statistics press, on November, 2007: 151 160. [3] Zhang Dunfu, Exploitation and research of regional economy [M], Beijing: China light industry press, 1998:23 24. [4] China statistical yearbook on science and technology (2007), China statistics press, on November, 2007:4 19. [5] China statistical yearbook (1999), China statistics press, on November, 1999:148 159. [6] Qi Benchao, Annual report on china’s regional economy(2007 2008)[M], Beijing: social science literature press, on March, 2008:5 17. ~ ~ ~ ~ 221 ~