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A technological capabilities perspective on catching up: the case of the Chinese information and communications technology industry
KTH, School of Industrial Engineering and Management (ITM), Industrial Economics and Management (Dept.), Sustainability and Industrial Dynamics.ORCID iD: 0000-0001-5024-4642
2014 (English)Doctoral thesis, comprehensive summary (Other academic)
Abstract [en]

This dissertation provides a capability creation perspective on the story of China’s technological catching up, or resurgence, if viewed from a broader historical perspective.

Since the first Asian tigers caught up to modern technological standards (e.g., South Korea, Singapore), two schools of thought have dominated causal explanations (Nelson and Pack, 1999). The first perspective is the conventional accumulation approach, which attributes the major share of growth to the accumulation of physical and human capital, and views learning as a more-or-less automatic byproduct of those investments. The second perspective is the assimilation approach, which emphasizes the arduous learning, risk-taking entrepreneurship, and innovation that is involved in the process and argues that the former proposition neglects this aspect of the endeavour and may therefore lead to erroneous estimates. This dissertation focuses on the second school of thought.

Compared to the first-tier Asian tigers, the second-tier tigers, of which China is representative, pose many challenges to the assimilation approach. First, the sheer size of the country results in an unusual scale and scope of activities and interactions in any field. Second, the long history of civilization in China suggests that many modern phenomena have historical roots that are unknown to outsiders and invisible and complex to insiders. The present study aims to contribute a small piece of the puzzle to our understanding of the big picture.

By providing an in-depth study of the Chinese information and communication technologies (ICT) sector, this study explores changes that have occurred in the three key building blocks of capability creation; specifically, the sourcing, generation, and appropriation of technological knowledge. A qualitative case study approach was employed for the main, empirical part of the study, which consists of extensive firm-level interviews. Complementary statistical data, including patent data and historical archives, were used to provide context and a deeper look into the study topic.

The results are described in five articles. The first article presents establishing overseas research and development (R&D) laboratories as one of the major learning methods for overcoming disadvantages related to dislocation from technology sources and advanced markets. This approach allows China to search for industry-relevant scientific knowledge rather than adopting ready-made technologies introduced by western multinational enterprises in China. The second article describes the modularity-in-design approach, which opens new windows of opportunity for technological advancement. The lack of essential intellectual property rights (IPRs) acts as a key inducement and a factor-saving bias that influences the direction of innovation. When both (international) competitiveness and learning are involved in the catching-up process, the development of industry-wide capability becomes a particularly vital aspect of indigenous innovation. The third article describes the geographic consequences of historically planted industrial capabilities in China’s inland regions, which impact the absorption of different types of industrial knowledge.

Fields of industry that are densely populated with patents- IPR thickets- represent a novel situation that was not experienced to the same extent by nations whose technological development occurred earlier. This thesis dedicates two articles to this dimension of knowledge appropriation. The fourth article describes the duality of Chinese ICT patenting, and the fifth article identifies an ambidextrous strategy that depends on where the major competition emerges. In general, the decision to patent and the extent of patenting are determined by four factors: a) the distance to the frontier (Aghion et al., 1997) particularly for technology; b) the nature of the technology (Teece, 1986), but with a rural extension in the case of China; c) the specificities of information (Arrow, 1962) that are embodied in a firm’s origins in China; and d) the supporting institutions that co-evolve in that process.

Learning proceeds at different levels: that of individuals, firms, industries, and nations.   This dissertation provides an industry-level perspective on learning and innovation-based technological advancement.

Place, publisher, year, edition, pages
Stockholm: KTH Royal Institute of Technology, 2014. , viii, 72 p.
Series
TRITA-IEO, ISSN 1100-7982 ; 2014:09
Keyword [en]
catching up, learning, capabilities, modularity in design, upgrading, appropriate technology, knowledge bases, patent thicket, appropriability, china, ICT
National Category
Engineering and Technology
Research subject
Industrial Engineering and Management
Identifiers
URN: urn:nbn:se:kth:diva-158218ISBN: 978-91-628-9272-2 (print)OAI: oai:DiVA.org:kth-158218DiVA: diva2:775558
Public defence
2015-02-03, Hörsal F3, Lindstedsvägen 26, KTH, Stockholm, 10:00 (English)
Opponent
Supervisors
Projects
from developing economy to global high-tech competitiveness - the case of Chinese ICT expansion
Funder
Sida - Swedish International Development Cooperation Agency, Swe-2003-265
Available from: 2015-01-13 Created: 2015-01-03 Last updated: 2015-01-13Bibliographically approved
List of papers
1. New Patterns in knowledge transfer and Catching Up: Chinese R&D in ICT
Open this publication in new window or tab >>New Patterns in knowledge transfer and Catching Up: Chinese R&D in ICT
2011 (English)In: Knowledge Transfer and Technology Diffusion / [ed] Robertson, Paul & Jacobson, David, Edward Elgar Publishing, 2011, 238-259 p.Chapter in book (Other academic)
Place, publisher, year, edition, pages
Edward Elgar Publishing, 2011
National Category
Social Sciences
Identifiers
urn:nbn:se:kth:diva-66457 (URN)2-s2.0-84881961054 (Scopus ID)9781848441064 (ISBN)
Note

QC 20120222

Available from: 2012-01-26 Created: 2012-01-26 Last updated: 2016-04-26Bibliographically approved
2. An indigenous innovation
Open this publication in new window or tab >>An indigenous innovation
2006 (English)Conference paper, Oral presentation with published abstract (Other academic)
Abstract [en]

Which aspects of the processes of an indigenous (South) innovation, particularly of the “high-tech” and “radical” kind, have spurred the technological catch- up? Using the example of the third-generation Chinese mobile communications technology standard, we probed the key dimensions of the development. Three hypotheses were generated from this study: a) modularity-in-design opens new windows of opportunity for technological catching up; b) the lack of essential intellectual property rights acts as a key inducement, or a factor-saving bias, that influences the rate and direction of indigenous innovation in the global South (e.g. China); and c) the long tail of an old technology conditions a new indigenous innovation to take off by essentially shortening the technological distance.   

Keyword
Appropriate Technology, Induced Innovation, Modularity in Design, Porter Diamond framework, Capabilities, China
National Category
Engineering and Technology
Research subject
Industrial Engineering and Management
Identifiers
urn:nbn:se:kth:diva-158497 (URN)
Conference
International Telecommunication Society Conference
Note

QC 20150113

Available from: 2015-01-08 Created: 2015-01-08 Last updated: 2015-01-13Bibliographically approved
3. knowledge bases and the geography of industrial upgrading
Open this publication in new window or tab >>knowledge bases and the geography of industrial upgrading
2007 (English)Conference paper, Oral presentation with published abstract (Other academic)
Abstract [en]

This article examines the emergence of the Information and Communication Technologies (ICT) industry in China and focuses on the role of inland regions and the knowledge and capability creation processes that are embedded in those areas. Drawing on interview, statistical, and archival data, we examined the balance of innovation between coastal and inland regions and found that small-scale inland ICT hot spots are historically grounded. Specifically, inland hot spots coincided geographically with regions influenced by the third front program (1964-1980). In addition, the results indicate a bias towards specific types of knowledge that are created in inland ICT hot spots. The findings suggest that Chinese industrial upgrading is not strictly core-peripheral in nature but may be explained, at least in part, by the varations in local receptiveness to different types of indsutry knowledge.

Keyword
knowledge base, upgrading, absorptive capacity, China, ICT, hinterland
National Category
Social Sciences
Identifiers
urn:nbn:se:kth:diva-158500 (URN)
Conference
China in the World
Note

QC 20150113

Available from: 2015-01-08 Created: 2015-01-08 Last updated: 2015-01-13Bibliographically approved
4. Navigating IPR thickets from a latecomers perspective: The case of the emerging Chinese ICT industry
Open this publication in new window or tab >>Navigating IPR thickets from a latecomers perspective: The case of the emerging Chinese ICT industry
2006 (English)In: Finland and the globalization of innovation / [ed] Jyrki Ali-Yrkkö and Christopher Palmberg, Helsinki: Taloustieto Oy , 2006, 193-226 p.Chapter in book (Refereed)
Abstract [en]

China is catching-up the developed industrialized countries as a major user, developer and producer of ICT. Nonetheless, the longer-term success of this catching-up process will also de- pend on how emerging Chinese firms manage to build up international intellectual property right (IPR) stakes and manage these in the thickets of overlapping patents held by the incumbents due the importance of standardization, patent pooling and cross-licensing in this industry. This paper analyses the endeavours that Chinese ICT firms face in this context, drawing on data on granted patents at the US patent office combined with interviews of the key firms. The results suggest that Chinese firms in- deed are building up patent-related IPR stakes, and acknowledge their importance, although the abso- lute level of patenting still is very low. Further, these IPR stakes are relatively indigenous in terms of ownership and the related knowledge base. The public standardization initiatives related to the third generation TD-SCDMA standard apparently also support such indigenous developments even though re-engineering and incremental innovation still plays an important role. Chinese firms also use secrecy, and lead time advantages as means to protect their IPRs, especially in the large domestic market characterized by an underdeveloped patent system. This duality in terms of differentiated strategies adustry.   

Place, publisher, year, edition, pages
Helsinki: Taloustieto Oy, 2006
Keyword
catching-up, China, ICT industry, patent thicket, IPR management
National Category
Social Sciences
Research subject
SRA - ICT
Identifiers
urn:nbn:se:kth:diva-70181 (URN)951-628-434-5 (ISBN)
Note
QC 20120131Available from: 2012-01-31 Created: 2012-01-30 Last updated: 2015-01-13Bibliographically approved
5. IPR, appropriability, and catching up: evidences from Chinese ICT
Open this publication in new window or tab >>IPR, appropriability, and catching up: evidences from Chinese ICT
2011 (English)Conference paper, Oral presentation with published abstract (Other academic)
Abstract [en]

Appropriability is known to be sector specific and linked to the (legal) environment; why do Chinese firms patent aggressively despite a non-patenting historical derivation and a recognised weak protection regime? This study uses a pro-patenting sector, namely, the Chinese Information and Communication Technologies (ICTs) industry, as a case to probe that question and to examine the key logics involved in that process.  This study is primarily based on (firm) interviews complemented with patent data. Four key logics behind Chinese firms’ patenting propensity are identified: a) the Aghion-ian “distance to the frontier” but with a focus on technology; b) the Teece-ian “nature of the technology” but with a latecomer’s focus on application knowledge, low-cost extension and the role of standards in facilitating entry; c) the firms’ origin; and d) the supporting institutions that co-evolve in this process. This inductive proposition suggests that a latecomer’s logic be included in the appropriability regime.

Keyword
Appropriability; Intellectual Property Rights (IPRs); Catching up; China, ICT
National Category
Engineering and Technology Social Sciences
Research subject
Industrial Engineering and Management
Identifiers
urn:nbn:se:kth:diva-158501 (URN)
Conference
R&D Management Conference 2011
Note

QC 20150113

Available from: 2015-01-08 Created: 2015-01-08 Last updated: 2015-01-13Bibliographically approved

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