---Building an innovative Guangdong by 2020

Building "innovative capacity" is more than just a trendy phrase in China today. The country as a whole has launched projects to create innovation systems in the past few years. Guangdong is also making efforts to its transition from a "manufacturing" powerhouse to an expert in "creating".

Guangdong's manufacturing sector is known as being capable of making OEM products and other low-end products, which has helped the region experience rapid economic development in the past 20 years. However, after two decades of development, "low price" still seems to be the only advantage most factories in the province own today. These factories have poor R&D ability and process few core technologies so there are little chance for them to develop into influential enterprises that have high-end products and famous labels.

For example, Guangdong is a big manufacturer and exporter of DVD. For each DVD, which is priced at 39 USD, Guangdong manufacturer needs to pay 19.7 USD to foreign enterprises that owned DVD-related patents. Moreover, Guangdong manufacturer need to import all the important parts, which accounts for 70 percent of the total production cost. The DVD manufacturing industry is low profitable. Guangdong toy factory earns 0.35 USD for producing one Barbie, which is sold at 9.9 USD in foreign markets. Source reveals that the foreign enterprises that own the labels of the products manufactured in Guangdong gain 90 percent of the profit.

Guangdong officials began seeking mode switches some years ago. They employed "lighten the province's heavy dependence on low-end products exports" as short-term plan and adopted "enhance innovative capacity so as to stimulate industrial upgrades" to secure long-term development.

Setting Targets

Last year, Guangdong economic planners issued three documents to launch an innovative capacity building campaign throughout the province including: "Resolution on enhancing innovative capacity and improving the industry's competitiveness", "Guangdong industrial sector's plan on technology innovation during the 'eleventh five-year plan' period (2006-2010)" and "Guangdong's long-term science and technology development plan (2006-2020)". The province has set a target to develop itself into an innovative province by the year 2020. Guangdong Party Secretary Zhang Dejiang, has defined the campaign as "a battle that will determine the future competitive edge of Guangdong in the coming global competition".

In January 2006, President Hu Jintao said during the National Science and Technology Conference that China would transition into an innovative country with technology as the main engine of social and economic development by the year 2020. During the next 15 years, Guangdong and all other provinces and regions of the country are heading in the same direction - "building an innovative society".

To achieve the goal stated in the national conference, Party Secretary Zhang of Guangdong listed seven tasks for the innovative Guangdong building campaign.

First, shake off its heavy dependence on simply "copying" inventions and innovations from outside the province and enhance its own capacity of inventing and innovating in the field of science and technology.

Secondly, guide the R&D institutes and talents to focus on those core technology researches, the result of which can boost the growth of the local industrial sector's manufacturing capacity.
Thirdly, adopt public bidding and other measures to better the allocation of science and technology resource.

Fourthly, focus on seeking breakthrough in core technology researches, put more effort on the inventing and innovating that related to the province's nine pillar industries, including electronic information, electric appliances & machinery, petrol chemistry, automobile, pharmaceuticals, paper making, textile and garments, building materials.

Fifthly, every area inside the province (such as east bank and west bank of Pearl River Delta area, the mountainous area in north Guangdong) shall establish an innovation system to activate the R&D activities within it.

Sixthly, the industrial technology innovation campaign shall focus on researches on new technologies that can apply for intellectual property rights and patents and on the technologies that can be applied by the industrial sector, especially the nine pillar industries, hi-tech industries and cultural industries.

Lastly, input more effort to innovation related to the energy-saving campaign so as to better the utilization of limited resources, stimulate the development of environment-friendly industries and better protect the environment.

So far, Guangdong has adopted several measures in promoting innovation such as accelerating the transfer of research results into products, improving its service to science and technology projects and improving its intellectual property right protection and management.

Promoting Innovation

In its effort to promote innovation, Guangdong organized a series of key manufacturing technological research projects. It also joined hands with Hong Kong to public bidding for launching key technology research projects last year. Meanwhile, the province increased support in its research institutes, helped enterprises to develop their own R&D facilities and established innovation centers which focus on research projects where results can be applied to the province's key industries.

Research to product transfer

To speed up the transfer of research results to products, the province supports the development of hi-tech industries, which is expected to have an industrial output of 1 trillion RMB in 2005, increased by 16 percent year-on-year. The 7,200 privately-owned technology enterprises produced over half of the province's hi-tech products and became an important part of the local economy. The province's 16 hi-tech parks are expected to increase by 28 percent in their industrial output to hit 510 billion RMB in 2005.

The province also helped towns to carry out schemes in technology innovation that are related to their key industries and products. This move also stimulates the development of rural areas and SMEs. Cooperation mechanisms were established between the 300-odd technology R&D centers, industrialized towns, 70 higher education institutes and 200 science and technology institutes in Guangdong.

Other approaches

To encourage more innovation, Guangdong set up special funds for inventions that apply for patents. A technology standard monitoring system was established and Shenzhen became one of the four cities in the country to set up trial projects to study key technology standards.

Meanwhile, Guangdong paid more attention to attract and produce technology and R&D talent. Job fairs were held in and outside the province to attract graduates from top universities in China and other countries. The higher education and vocational education in the province saw solid development in the past few years. The province now ranks second in the country in the number of technology personnel, while in 1980, it ranked 11th.

Guangdong acted as a pioneer in China's reform when it opened up 26 years ago and surprised the world with its rapid pace of industrial development. Now, the province has reached another development mode switch which is expected to usher in a new generation of wealth.

Editor: Zhang Ying