Download Study on the Technology Investment in Henan Province in View... Enhancing the Independent Innovation Capability

Study on the Technology Investment in Henan Province in View of
Enhancing the Independent Innovation Capability
YANG Shao-kun
Henan Polytechnic University, P.R. China, 454000
[email protected]
Abstract Starting with the necessity of increasing the technology investment, strengthening the
independent innovation capability, this thesis analyzes the scale and structure of technology investment
in the human resources, together with the amount and the strength of the financial resources in Henan
Province. It deals with the main problems in the technology investment in Henan Province and
maintains that increasing the technology investment is the necessity in raising the independent
innovation capability. The thesis also offers some countermeasures and advice.
Key words Independent innovation capability, Technology investment, Analysis, Countermeasures
and advice
1 Introduction
With the acceleration of the economic globalization and scientific globalization, the independent
innovation capability becomes the key factor in the comprehensive competence of a country or a region.
In the big environment of economic globalization, while the flow and distribution of capital, information,
technology and talents become more concentrated, and the conversion time of scientific production and
upgrade cycle of industry become shorter and shorter, then the competition in scientific technology
becomes the focus of all the countries. While the developed countries win their competitive edges
through attracting the talents from all over the world and control of the intellectual property rights and
thus form the intense monopolization and excess profit. The traditional amount-oriented mode of
economic development which is simply based on the price advantage can no longer guarantee the
interest of the country. Only the state or region which own the independent intellectual property rights
can obtain the sustainable economic increase. So, as is stressed many times by our President Hu Jintao,
strengthening the independent innovation capability is the central part in carrying out the adjustment of
structure; our Premier Wen Jiabao also points out that we should try to build our homeland into an
innovative country with international influence.
As can be seen by all, the independent innovation is the strategic choice in our development. The
international practice proves that, the period when a country’s GDP per capita rises from
1,000 to
3,000 is a very critical stage. Besides the stable social environment, the successful region has a quite
clear main thread, namely, “the increase of independent innovation capability---the adjustment of
industrial structure---the transformation in economic development”. For instance, Korea. Korea pays
much attention to the introduction, digestion, absorption and independent innovation of technology,
among which the last factor plays an important role. In 1980s, Korea was once among the non-core
technology innovation economies, 28 among the technology innovation economies, then in 2001, she
ranked 12 among the core technology innovation economies, accordingly, her GDP per capita rose from
2, 000 in 1983 to 10,000, realizing the high-speed rise and modernization; on the contrary, some
south American countries had their economy bellwavering because they remained contented with the
simple introduction of technology and ignored the independent technology innovation[1].
Henan Province’s GDP per capita in 2007 has risen above
2, 000. This shows that the economy
of Henan Province is in the initial period of “accelerating stage” , entering the key stage of the
adjustment of industrial structure and the transformation in economic development. Since the reform
and the opening-up, Henan has enjoyed the rapid economic development through introduction of foreign
capital and technology, with its gross products totaling 1, 505. 808 billion yuan in 2007. The increase
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301
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rate is 14.4%, remaining above 10% for 5 continuous years, and above 14% for 3 continuous years.
Recently, by carrying out the strategic measures such as “reviving Henan through science and
education ”, “growing up of central plains”, “building new Henan”, Henan has remarkably enhanced the
comprehensive scientific strength and the enterprises have become the principal part in the technology
innovation. But looking back at the development of Henan, we can find that there are many problems: it
mainly relies on the introduction of foreign capital, technology, equipment and cheap labor force; its
processing business accounts for a large part; rather weak in the independent innovation capability,
lacking the core technology and independent intellectual property rights; and many products have low
technologic level, belonging to the low-end of the industrial chain; meanwhile, many manufacturings
consume a lot of resources, with much pollution and low added value. Henan Province is in urgent need
of raising the independent innovation capability, starting the independent innovation, innovation after
absorption and integrated innovation, so as to help the adjustment in structure and the harmonious
development of economy and society. The successful experience in China tells us that enhancing the
technology investment plays the critical role in pushing forward the scientific and technological
innovation, lifting the competitive power in terms of science and technology and speeding up the fast
development of local economy. So, enhancing the technology investment and enhancing the technology
investment have important and profound influence over the aim of realizing “the growing up of central
plains” at high speed and building Henan into innovative province.
2 The present situation of technology investment and analysis on its problems
The technology investment is chiefly made up of two factors: one is the input of human resources,
including the scale and structure of input in the people active in the scientific and technological field or
scientists and engineers; the other is the input in finance, including the government funds in the
scientific and technological area, and its strength and the R&D (research and development)expense and
its strength.
2.1 Analysis on problems in the input of human resources in the scientific and technological field
in Henan Province.
First, regarding the scale and strength of the labor force, there are 1,450 units active in the scientific
and technological field in 2007, with 186,000 personnel, ranking No. 10 in China. In 2007, the number
of the people in the field of R&D is 44,155, counting 23.74% of the total number of people active in the
field. This ratio is 7.31% lower than the average in China, 31.046%. The above data shows that in
Henan Province the input in the R&D people is rather low, indicating the shortage in the human
resources with scientific and technological innovative capability. From Table 1, it can be seen that, in the
8 years from 2000 to 2007, the true total of input in the people active in the scientific and technological
field , scientists and engineers is rising year by year. But the amount per capita is quite small because
Henan Province has the largest population in China. For 8 years, the number of the people active in the
scientific and technological field is just around 15 in 10,000, lower than 25, the average nationwide; for
scientists and engineers, the number has stayed around 10, for the people in the field of R&D, the
number wavers around 3-4 among 10,000, also lower than 12, the average nationwide. So, there is a
clear shortage in the R&D people in Henan.
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Table 1
The scale and structure of input in the scientific and technological human resources in 2002-2006
in Henan Province(unit: person)
①
②
③
④
⑤
⑥
15.09
16.00
91341
9.63
34629
3.5
2001
14.80
14.69
87202
9.13
36138
3.7
2002
2003
13.72
14.65
14.90
15.14
90789
93600
9.44
9.68
41492
40742
4.2
4.1
2004
14.95
15.15
95300
9.86
41233
4.2
2005
14.21
14.40
96400
9.97
42863
4.3
2006
2007
16.55
18.60
16.77
19.19
108592
108993
11.23
11.25
43889
44155
4.5
4.5
year
2000
①People active in the scientific and technological field ②Number of people active in the scientific and
technological field per 10,000 ③Number of scientists and engineers ④Number of scientists and engineers per
10,000 ⑤Number of R&D people ⑥Number of R&D people per 10,000.
Source: web of National Bureau of Statistics of China: http：//www.stats.gov.cn；Statistical yearbook of Henan
(2002-2006); Statistical yearbook of China (2002-2006); National Technology Investment statistical bulletin
(2002-2006).
Second, it can be judged from the distribution of the labor power structure. The people active in the
scientific and technological field are mainly in the scientific research institutions, colleges and the
industrial enterprises. Recently, with the reform in the scientific research system, scientific and
technical talents formerly collected in the research institutions begin to shunt. In 2007, the R&D people
in the scientific research institutions, colleges and the industrial enterprises are 44,155 per year, among
which the people in the scientific research institutions are 8765 per year, counting 19.85%, for those in
the colleges, it’s 4228 per year, counting 9.57%; while for those in the industrial enterprises, it’s 25409
per year, counting 57.54%. The structure shows that the industrial enterprises have become the central
part in the R&D activities in Henan. Judged from the fields the R&D people are working in, those in the
coal mining and processing, petroleum and natural gas extraction, non-metallic mineral products
manufacturing, electric machine and equipment manufacturing account for more than 50% of the R&D
people. So it shows that the R&D people in the industrial enterprises in Henan are mainly distributed in
the traditional enterprises. Therefore, the scale and structure of the input of human resources in the
technological field in Henan Province still needs considerable increase and adjustment.
2.2 Analysis on the problems in Henan’s investment in the financial resources in technological field
2.2.1 The problems can be appraised first from the angle of the government investment.
Table 2
The financial allocation for sci-tech of Henan Province during the years 2001—2006 and its
intensity[2]
Year
2001
2002
2003
2004
2005
2006
Average increase per year
①
②
③
④
7.20
8.30
9.00
10.80
13.80
17.60
16.21%
508.58
629.18
716.60
878.05
1116.04
1442.62
18.74%
1.42
1.32
1.26
1.23
1.24
1.22
0.13
0.13
0.13
0.12
0.13
0.14
①The financial allocation for sci-tech in Henan Province(100 million) ②The total financial expenditure of Henan
government(100 million) ③Percentage in the total financial expenditure of Henan Province% ④Percentage in GDP
303
Henan Province %.
Source: Statistical yearbook of Henan (2002-2006).
In Table 2, the following things can be seen: over the years 2001—2006, the absolute amount of the
financial allocation for sci-tech has been increasing, becoming 2.5 times the original, with an increasing
rate of 16.21% per year. But during the same period, the total financial expenditure of Henan Province
has increased from 50.858 billion to 144.262 billion, becoming 2.8 times the original, with an increasing
rate of 18.74% per year. It is obvious that the total financial expenditure of Henan Province has a bigger
rise than the financial allocation for sci-tech. Meanwhile, the financial allocation for sci-tech accounted
for 1.42% of the total financial expenditure of Henan Province in 2001, the highest among the 6 years.
The ratio then descends year by year until in 2006 the percentage fell to 1.22%, 0.84% lower than 2.08%,
the regional average, even not up to 2/3 of the average nationwide. In 2007, the financial allocation for
sci-tech accounted for 0.14% of GDP of Henan Province, lower than half of the regional average in
China, ranking 28 in all the provinces ([municipalities directly under the Central Government and
autonomous regions). So, the scientific research activities need stable support, the descending and
unstable trend in the financial allocation for sci-tech will harm the development of sci-tech. at the this
time, other provinces have kept financial allocation for sci-tech in high level, leaving Henan Province
further behind.
2.2.2 The problems can also be appraised from the angle of R&D expenditure and its intensity.
R&D activities are the most creative and innovative part in the scientific activities. Among other
supporting factors, the funds and personnel are the two key points in the smooth proceeding of the
scientific activities. The R&D outlay is the core of the scientific investment, while the investment total
and intensity of R&D basically represents the industrialization stage and developing level of a region.
Hence, the R&D outlay is often used to make comparison internationally. And this thesis will also make
special studies on the R&D outlay and its intensity.
In Table 3, there can be seen that there are some hidden troubles in the R&D investment: first, the
R&D outlay has the tendency of falling or slow increasing. Now Henan’s R&D outlay counts 0.69% in
GDP, much lower than 1.42%, the national average. This will not only affect the independent innovative
capability, but also harm the objectives to attract the talents to our province, it may even cause the
outflow of talents. Second, the related study proves: in the process of economic development, the ratio
of R&D/GDP takes on the shape of S on the whole: When GDP per capita is below $ 400, the ratio of
R&D/GDP is often below 0.8-1.0%, and the increase will be slow; when GDP per capita is 400--2100,
the need for sci-tech is largest, the ratio of R&D/GDP is often 1.0-2.5%, and the increase will be the
fastest; when GDP per capita is over $ 2100, the stable stage for development is entered, and the ratio of
R&D/GDP is often about 2.0%-3.0%. judging from the developing stage of the economy, Henan’s GDP
has reached 1505.8 billion yuan in 2007, and the GDP per capita is 15,257 yuan, equal to 1,907 US
dollars. This indicates that Henan’s economy has entered the stage of fast development. But, the data in
Table 3 shows that, the intensity of R&D outlay(R&D/GDP %) in Henan is 0.33% for the year 2000,
while in 2007 the number has just risen to 0.69%. during the 8 years the increase rate per year is only
0.05%. It is clear that, compared with the industrialization development stage in which GDP increases,
the ratio of R&D/GDP is lagged far behind.
，
Table 3 The R&D outlay in Henan in the years 2002—2007 and its intensity
year
2000
2001
2002
2003
2004
2005
2006
2007
①
24.8
28.30
29.30
34.20
42.40
52.40
69.00
103.80
②
③
0.33
0.49
0.50
0.48
0.42
0.50
0.55
0.69
1.00
1.10
1.23
1.32
1.23
1.34
1.42
304
④
15.09
14.80
13.72
14.65
14.95
14.20
16.55
18.60
⑤
16434
19122
21356
23345
28361
36901
41691
55806
①The R&D outlay 100 million ②Percentage in GDP% ③Percentage of R&D outlay in GDP nationwide%
④People active in the sci-tech field 1,000 ⑤The average R&D per person for people active in the sci-tech field
yuan.
Source: web of National Bureau of Statistics of China: http：//www.stats.gov.cn；Statistical yearbook of Henan
(2002-2006); Statistical yearbook of the technology in Henan (2002-2006);Statistical yearbook of China
(2002-2006); National Technology Investment statistical bulletin (2002-2006).
All in all, no matter compared with the total R&D expenditure or GDP or the financial allocation,
the scale of the R&D outlay is much lower than that given by the developed countries in the
correspondent stage. As is well known, in The medium and long- term scientific and technological
development planning outline of Henan Province (2006 -2020), it says: the objective is: the R&D input
of the whole society shall account for 1.5
of the GDP in 2010, and 2.5%, the average level
[3]
nationwide, in 2020 . In the future 3 years, only when the increase rate in the government allocation for
technology become remarkably higher than the growth rate of GDP(the ratio of R&D/GDP goes up by
0.27% per year), can Henan reach the objective of 1.5%. According to the objective that in 2007
Henan’s GDP shall double, the total will be about 1,700 billion, and the total of the R&D will be about
25.5 billion. Judging from the current state, the task is heavy and the road is long.
％
3. The countermeasures and advice
Owing to the tradition industrial structure and the big population, there are many technology of low
level and industries with low additional value, lacking in the ability to master the core technology. So
the government and enterprises shall pay much attention to the R&D input, breed, attract and gather the
talents of high quality so that Henan can raise the independent innovation capability, and catch up with
and surpass other developed provinces.
3.1 Strengthen the government input for technology to ensure the government input for
technology to grow year by year
We should give a full play to the guidance of the government allocation for technology, pushing
forward the input of the whole society to technology.
The government financial allocation for technology should abide by the requirement of LAW OF THE
PEOPLES REPUBLIC OF CHINA ON SCIENCE AND TECHNOLOGY PROGRESS, to ensure that
the technological outlay increase is clearly bigger that the that of the financial regular income, and that
the ratio of the financial outlay for technology to the financial total outlay shall rise with the year. So,
we must strengthen the government input intensity for technology, ensuring that growth rate of the
financial outlay for technology rise steadily, and that the ratio of the financial outlay for technology to
the financial total outlay in governments of all levels shall rise with the year. We should strive for the
objective that the ratio of the government financial outlay for technology to the financial total outlay
shall rise to more than 6%[3].
3.2 The enterprises should be guided and encouraged to enhance the input for technology, making
them the main body of the input for technology
The enterprises are not only the combine of the technology and the economy, but they are also the
main body of the input for technology. The government should enhance the input for technology,
meanwhile it should also guide the enterprises and society to increase the input for technology through
the government financial policy, the taxation policy and the financial policy; meanwhile we should lay
down policy and measures to inspirit the enterprises in invest in the research and development, for
instance, reduce the income tax in proportion to their R&D outlay; require that they should make the
outlay for R&D occupy a certain proportion of the sales income, and those failing to meet the
requirement are excluded from the related favorite policies. Also, there should be unified planning partly
to set up the innovation fund for the technology progress and development of the different trades.
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3.3 Actively explore other channels for technological input and develop the technological venture
capital investment.
Technological venture capital investment is the necessary route for the technological products
conversion and innovation, realizing the industrialization of the high-tech. the Henan government should
actively create favorite conditions, such as help and support in policy, capital input and the set-up and
running of the venture capital institutions. Meanwhile, other channels, like founding the R&D common
fund, issuing the technological bonds, setting up the institutions to rent or pawn technology, attracting
capitals from abroad, should also be opened.
3.4 Breed, attract and gather the talents of high quality
Though already a big province in economy, Henan is still quite behind others in technology. This
requires that the decision-making units of all levels have far-sight and scientific planning. They should
lay down policies and specific favorite measures to attract the excellent talents to strengthen the R&D
capability as soon as possible. It should be seen that the fight for talents of high quality is going around
the world. The developed countries have laid down laws to offer positions for foreign talents “with
professional knowledge and techniques”; and the developed provinces in China have also promulgated
looser and more favorite policies to attract talents. In conclusion, only by offering the perfect
environment and necessary conditions can Henan breed, attract and gather the talents of high quality,
can Henan’s economy keep the vigor in the long run, and enjoy the predominance in the future ferocious
competition[4].
4. Conclusion
There are many contradictions and problems in the field of increasing the technology investment,
strengthening the independent innovation capability and building the “Creative Henan ”.The most
concerned include: the scale and intensity of sic-tech human resources input are quite low, the
distribution of related people is not balanced, the government financial outlay in technology is low; the
growth rate of the R&D input is rather weak. To solve the problems, we must carry out the followings:
strengthen the government input for technology to ensure the government input for technology to grow
year by year; the enterprises should be guided and encouraged to enhance the input for technology,
making them the main body of the input for technology; actively explore other channels for
technological input and develop the technological venture capital investment; and breed, attract and
gather the talents of high quality. Only by doing so can we increase the technology investment,
strengthen the independent innovation capability and build the “Creative Henan ”.
Reference
[1]Xuan Linna. The comprehensive appraisal of the technological competitive power of Henan Province.
Theis for master degree of Zhengzhou University,5(2006),p37
[2]Cao D H, Yin J. The current situation analysis and advice on policy concerning Henan Province’s
financial input in technology. Henan Technology, 3(2007),p4 5
[3]The medium and long- term scientific and technological development planning outline of Henan
Province (2006 -2020). News of Henan Provincial People's Government.,13( 2006),p4
[4]Wang J Q, Ma C Y. The present situation of the economy and technology development of Henan
Province and thought on its development. Journal of Henan Mechanical and Eectrical Engineering
College,4(2007),p57 58.
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