Drivers of China’s Convergence to Innovation Leaders

Abstract

The article focuses on the innovation divide in the world economy, in which some countries are technological leaders whereas the others are technological followers; however, a continuous innovation convergence has been taking place over the last decades. The aim of the paper is to measure the dynamics of the innovation gap between China and both the USA and the EU, and to identify key factors of China’s success in bridging the gap with the world’s innovation leaders. The analysis indicates the convergence in innovation performance between the analyzed economies, especially when it comes to innovation capability. Key factors contributing to this process are identified and analyzed, in particular: China’s science, technology and innovation policy, increased R&D expenditures, human capital development, and the development of clusters and highly specialized industries.