ChinAI #364: Who is Us - the hybridization of innovation and challenges to assessing technological dependence

2022-03-07 · Source: ChinAI Newsletter · Field: Government & Public Sector — Public Policy & Governance, Economic Analysis & Policy, International Business & Trade · Depth: Expert, medium

Summary

A new article, "Who is Us: the globalization of innovation and challenges to assessing technological dependence," examines why China ceased using its Foreign Technology Dependence Ratio (FTD) in 2016, despite a prior goal to reduce it to 30% by 2020. The author argues that the "hybridization of innovation," characterized by increased cross-border financial and talent flows, complicates national assessments of technological self-sufficiency. This phenomenon creates "Corporation C" firms, like Alibaba, which are domestically headquartered and operated but possess substantial foreign ownership and diverse leadership. Comparative case studies across China (1990–2005; 2006–2020), Japan (1970–1990), and India (2003–2020) reveal that after this hybridization, policymakers' evaluations of foreign technology dependence become more unstable and subject to varying interpretations, hindering the consistent application of quantitative indicators.

Key takeaway

For policy makers assessing national technological autonomy, you must recognize that globalized innovation has made traditional metrics like the Foreign Technology Dependence Ratio unreliable. Your strategies for indigenous innovation should account for "hybridization," where firms have mixed ownership and talent across borders. Relying solely on quantitative indicators risks misrepresenting actual dependencies and hindering effective policy formulation. Consider qualitative factors and the complex "gray zones" between domestic and foreign entities.

Key insights

The hybridization of innovation complicates states' ability to accurately measure technological self-sufficiency.

Principles

• Globalization hybridizes innovation, blurring firm nationality.
• Technological dependence assessment is subjective, not objective.
• Pre-hybridization, autonomy tracking was clearer.

Method

The article conducts comparative case studies of China (1990–2005; 2006–2020), Japan (1970–1990), and India (2003–2020) to evaluate how policymakers assessed foreign technology dependency.

In practice

• Analyze firm ownership and leadership beyond headquarters.
• Consider talent and financial flows in dependency metrics.
• Recognize "gray zones" in domestic vs. foreign definitions.

Topics

• Technological Dependence
• Innovation Globalization
• Indigenous Innovation
• Policy Assessment
• China Technology Policy
• Hybrid Firms

Best for: Policy Maker, Research Scientist

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Editorial summary, takeaway, and curation by AIssential. Original article published by ChinAI Newsletter.