Top-down planning chases innovation

Are Li's mechanisms and ecosystems enough to maintain progress and remedy the deficiencies? Innovation zones are increasingly targeted by reformed financing and tax incentives. Together with values such as openness and modernization, innovation is also being proposed as a tool to revitalize stagnant industries and regions. But the lure of visibility compels leaders to focus on immediate returns. Modern office parks, headline-grabbing tax reforms and collaborations with high-profile partners cultivate the impression that China's commitment to innovation is genuine and ambitious. However, the process of making Li's ecosystems a reality is slower and less glamorous work.

At the dawn of the computer age, the title of Silicon Valley was up for grabs. In the United States, both Boston and the San Francisco area had the right advantages, including a highly educated population and the presence of world-class universities. But it was the San Francisco area that snagged the coveted status away from Boston. The reasons may be instructive for China in its pursuit of an innovative ecosystem.

According to technology scholar AnnaLee Saxenian, institutional differences were the primary factor. Boston was imprisoned by a legacy corporate culture whose unyielding hierarchy stifled the freewheeling experimentation necessary for innovative breakthroughs. In contrast, the social-professional networks and culture of open collaboration in the San Francisco area generated a welcoming atmosphere for innovation.

Author Richard Florida later argued that the three critical factors generating growth of high-technology regions are talent, technology, and tolerance. The first is arguably a function of educational investment, the second of infrastructure and the third of culture. Effective in all three factors, California's Silicon Valley quickly established a pre-eminent position in the world's most dynamic and profitable industry.

The substance behind Li's "mechanisms and ecosystems" - more than their visibility and fanfare - will determine China's innovative performance. One critical lesson, however, is evident from historical experience. Developing that famously elusive environment necessary for innovation involves more than bricks, mortar and tax incentives. But without an environment of collaboration and openness, innovation progress may ultimately revert to the pace of the tortoise.

Asit K. Biswas is distinguished visiting professor, and Kris Hartley is a doctoral candidate at the Lee Kuan Yew School of Public Policy, National University of Singapore.