According to McKinsey Quarterly's "A CEO’s guide to innovation in China" dated February 2012, "Chinese authorities view innovation as critical both to the domestic economy’s long-term health and to the global competiveness of Chinese companies. China has already created the seeds of 22 Silicon Valley–like innovation hubs within the life sciences and biotech industries. In semiconductors, the government has been consolidating innovation clusters to create centers of manufacturing excellence." Click here

It begs the question how successful in China are these "innovation hubs" and "science parks". There is a perception that at least some of them may be no more than a disguise for real estate speculation.

It is true these facilities are not necessarily a silver bullet for China’s innovation drive. Some may indeed be a camouflage for real estate development. A recent study on China’s science parks by Stuart Macdonald of the Management School, University of Sheffield, et al exposes the fallacy of over-emphasizing the importance of these innovation hubs. Click here

However, as with so many things in a vast country in rapid transition, there is often a mix of myth and reality, hype and truth, seldom black and white.

First, while there is no dispute at all with the main thrust of the study’s cautionary tale, it doesn’t disprove entirely the value of at least some of these hubs or science parks. Some of them are designed as incubators. As soon as competitive success is attained, some firms may choose to relocate to gain economy of scale. The study’s choice as criteria for judging the efficacy of science parks is thus debatable. Instead of the number of firms, number of employees, annual production, net profits and net exports, it would be more instructive if the study had managed to trace to what extent science parks have succeeded in growing China’s innovative enterprises in the national if not global market place, as in the case of the Silicon Valley.

Second, some of China’s science parks have proved more successful than others. According to the China Daily, “Zhongguancun-based companies garnered business revenues of 380 million yuan ($69 million) in the first quarter of this year (2011) , up 12 percent on a year-on- year basis. The State Council recently approved a development plan called the Zhongguancun National Innovation Demonstration Zone (2011-2020) that allows companies in the area to try out new measures and pilot projects.” Click here

Third, China’s innovation drive especially in green technologies is beginning to catch international attention, at least that of the United States.

A US-China Clean Energy Cooperation Agreement signed on 17 November, 2009 provides for the following –

• A US-China Clean Energy Research Center with World Resources Institute, supported by $150 m combined public-private funding from US and China.

 •Joint research and development in advanced coal research, carbon dioxide capture and storage, building energy efficiency, and clean vehicle technology.

 •A US-China Electric Vehicle Initiative, a US-China Energy Efficiency Action Plan, a US-China Renewable Energy Partnership, a ‘21st Century Coal’ project on Carbon Capture and Storage and a US-China Energy Cooperation Program for renewable energy, smart grid, clean transportation, green building, clean coal, combined heat and power, and energy efficiency.

A World Resource Institute Working Paper dated December 2009, “An Emerging Revolution: Clean Technology Research, Development and Innovation in China” “summarizes China’s policies to prioritize, fund and deploy clean technology R&D and innovation over the short and medium term. These comprehensive policies reflect China’s ambition of emerging as a global power in science and technology through clean technology R&D and innovation.” Click here

A Report to the President of MIT dated 1 April 2010, “The MIT-Greater China Strategy”, noted that “China spends over $136 billion on research and development alone, making it the second highest investor in R&D in the world. During the last decade, China’s R&D intensity has doubled. The number of scientific researchers in China has increased by 77% in just ten years. The scale of its research force, about 926,000 researchers, makes it a significant talent hub.” Click here

Fourth, a McKinsey Quarterly report by Guangyu Li and Jonathan Woetzel, “What China’s five-year plan means for business” dated July 2011 details “ a handful of industries as emerging battlegrounds where countries will be competing for technological leadership during the next wave of development. These industries, including new energy sources and biotechnology, are distinguished by their high profit growth potential and moderate state oversight. In these areas, the government has dedicated itself to incubating national and global champions by helping them gain leading technologies and expanding their commercial capabilities.” Click here

Many of China's teeming researchers work in labs and incubators in universities, science parks and other research hubs. Although some of the off-campus facilities may be less successful, there are those which may well promise to be the cradle of a new generation of indigenous innovative enterprises capable of scaling some of the national if not global commanding heights.

In a fast-changing and globally connected world, governments and businesses disregard China’s massive innovation drive at their peril.