China's innovation makeover: Dramatic R&D funding boost for emerging technologies

China's 12th Five Year Plan, considered the world's most comprehensive technology development initiative, calls for hiking R&D funding for emerging technologies by a staggering 159% to $18 billion, according to a new report from Lux Research. In addition, the country is so eager to rebrand itself from manufacturer to innovator that the Five Year Plan also calls for supporting joint research programs with foreign companies.

"China is the largest manufacturing company in the world. Due to weakening market demands in the developed countries, the traditional development model, which relies on manufacturing and real estate industries, has faced a big challenge," said Xavier Xie, Lux Research analyst and, with Richard Jun Li, the report's lead author. "To achieve a sustainable growth, China has determined to focus on seven strategic and emerging industries: environmental technology, new energy, new energy vehicles, advanced equipment, biotechnology, new material, and information technology."

Lux analysts studied the Five Year Plan in detail and talked with Chinese government officials. Some highlights from the report's findings include:

·         While China will dramatically increase R&D funding in its ambitious bid to become an innovation hub, it will fall short of its goal of 3% of GDP, the ratio used by many developed countries to keep their technology edge.

·         The country is concentrating on sustainable growth to deal with its environmental challenges, and about 48% of the $18 billion investment will be in environmental technologies, with 32%  for new energy and 12% for smart grid.

·         In its eagerness to become an innovation hub, China is prepared to drop its cloak of secrecy and partner with foreign companies. A director of China's Ministry of Science and Technology says "they will support joint research programs developed by foreign labs or multinational companies with their Chinese counterparts," according to a Lux Research press release. The research firm added that the move to attract foreign partners will "create unforeseen opportunities" for western companies.

Source : Smart Grid News