1. 3rd International Workshop on Innovation
and Performance Management
The Evaluation of
Innovation Capacity of
Chinese Manufacturing
CHEN Fang, Professor MU Rongping
Institute of Policy and Management, CAS
2010-7-2 1

2. Content
 Introduction
 Literature Reviews
 Evaluation Framework of Manufacturing
Innovation Capacity in China
 Evaluation Results of Innovation
Capacity of CM
 Conclusions
2010-7-2 2

3. Introduction
 China wants to become an Innovation-Driven Nation by
2020. Now China is the largest manufacturing country,
but not the strongest one.
 How to monitor the progress of manufacturing
innovation capacity-building in China, to indentify the
key factors affecting capacity-building, and to provide
effective policies.
 It is important and necessary to build up a systemic
evaluation framework of innovation capacity for CM.
2010-7-2 3

4. Content
 Introduction
 Literature Reviews
 Evaluation Framework of Manufacturing
Innovation Capacity in China
 Evaluation Results of Innovation
Capacity of CM
 Conclusions
2010-7-2 4

5. Literature Reviews
 European innovation scoreboard, 2009
 Summary innovation index includes enablers, firm activities,
outputs.
 WEF Report is concerned with innovation capacity
index(ICI).
 IMD Yearbook have S&T competitiveness.
 World Bank puts out knowledge economic index(KEI).
 Luis、Furmana、Porter、Stern、Mathews etc.
 《Oslo Manual》(OECD)
 Emphasizing the research on industrial innovation measuring,
concerning innovation for product, process, institution, market, etc.
2010-7-2 5

6. Literature Reviews
 The Report on Innovation and Development in China,
2009(the Center for Innovation and Development of
CAS)
 The Report on Innovation and Development Index in
China, 2008(RUC)
 The survey report on China’s industrial innovation
capacity(Ministry of Science and Technology, P.R.
China,2006)
2010-7-2 6

7. Content
 Introduction
 Literature Reviews
 Evaluation Framework of Manufacturing
Innovation Capacity in China
 Evaluation Results of Innovation
Capacity of CM
 Conclusions
2010-7-2 7

8. Evaluation Framework
 Definition of manufacturing
innovation capacity
 Manufacturing innovation capacity
index
 Evaluation method
2010-7-2 8

9. Definition of Manufacturing
Innovation Capacity
 Manufacturing innovation capacity is the capability of
manufacturing to carry out technology development,
diffusion, application and other innovation activities so
as to achieve economic and social performance under
certain conditions.
 In broad sense, manufacturing innovation capacity is a
wide range of the capability of manufacturing
enterprises to integrate innovation resources so as to
transform them into wealth.
2010-7-2 9

10. Manufacturing Innovation
Capacity Index
Innovation Innovation
Strength Effectiveness
innovation input innovation input
innovation output innovation output
innovation performance innovation performance
S&T
Finance Tax ……
Input
Indicator System of Manufacturing Innovation Capacity
2010-7-2 10

11. Index Sub-index Indicator
Personnel engaged in S&T activities
Funding for S&T activities
Innovative Input
Strength Index Expenditures for absorb and digest
Projects for S&T activites
Number of S&T institutions
Innovation
Strength Index Invention patents owned
Innovative Output Invention patent applications
Strength Index
Utility model or design patent applications
Gross industrial value added
Innovative
Performance Strength
Index
Revenue from the sale of new products
2010-7-2 11

12. S&T personnel (% of workforce)
Funding for S&T activities (% of turnover)
Innovative Input Expenditures for absorb and digest (% of expenditures for indraught of
technology)
Effectiveness Index
Projects for R&D (% of projects for S&T activities)
Enterprises having S&T institutions (% of total industrial enterprises)
Invention patents owned per enterprise
Invention patent applications per 10,000 S&T personnel
Invention patent applications per 100 million funding for S&T
Innovative Output activities
Effectiveness Index Utility model or design patent applications per 10,000 S&T personnel
Innovation
Effectiveness Utility model or design patent applications per 100 million funding for
Index S&T activities
Labor productivity
Revenue from the sale of new products (% of turnover)
Gross industrial values added per energy consumption
Gross industrial values added per industrial waste water discharge
Innovative
Performance Industrial solid wastes utilized (% of total wastes utilized, stocked,
Effectiveness Index treated, and discharged)
Volume of industrial waste gas emission (% of volume of waste gas
emission and removed)
Gross industrial values added per original value of productive
equipment
2010-7-2 12

13. Evaluation Method
 A revised Min-Max Normalization is applied for
computing the standardized value of the indicator, in
order to make the index comparable within several
years.
 the maximum value and the minimum number should
be less the smallest one, and they are determined by
experts with considerations of the pre-calculation by
Trend Extrapolation Methods
 the weight of each indicator is given according to its
importance assigned by selected experts in China
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14. Evaluation Method
 Firstly, the standardized value of indicator, ranging
from 0 to 1 as follows:
Positive Xj X s _ min
Ij  j
indicator X s _ max
j X s _ min
j
Negative Xj X s _ min
indicator
I j  1 j
X s _ max
j X s _ min
j
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15. Evaluation Method
 Secondly, the index is calculated according to the
Weighted Arithmetic Average method. The index
score of the indicator l at the level k , is given by:
mi
I ( k ,l )  w
( i , j ) 1
I
(i , j ) (i , j )
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16. Content
 Introduction
 Literature Reviews
 Evaluation Framework of Manufacturing
Innovation Capacity in China
 Evaluation Results of Innovation
Capacity of CM
 Conclusions
2010-7-2 16

17. 2007 2008 Top 10 industries
Rank
1
Score
39.00
in terms of MICI
CECOEE
Transport Equipment 2 32.42 are as following:
Electrical M achinery and Equipment 3 28.26
Smelting and Pressing of Ferrous M etals 4 23.96
General Purpose M achinery 5 22.88 1. CECOEE (Communication
M edicines 6 22.35 Equipment, Computers and
Tobacco 7 20.18
Other Electronic Equipment)
Raw Chemical M aterials and Chemical Products 8 19.55
Special Purpose M achinery 9 18.43 2. Transport Equipment
M IM CAOW 10 16.78 3. Electrical Machinery &
Smelting and Pressing of Non-ferrous M etals 11 15.62 Equipment
Chemical Fibers 12 13.25
M etal Products 13 12.73
4. Smelting & Processing
Rubber 14 12.56 of Ferrous Metals
Non-metallic M ineral Products 15 12.40 5. General Purpose Machinery
Textile 16 12.36
PPCPNF 17 11.71
6. Medicines
Beverages 18 11.62 7. Tobacco
Plastics 19 11.09 8. Raw Chemical Material
Furniture 20 11.07
Foods 21 10.66
& Chemical Products
Processing of Food from Agricultural Products 22 10.45 9. Special Purpose Machinery
Articles For Culture, Education and Sport Activities 23 10.32 10. MIMCAOW (Measuring
Artwork and Other M anufacturing 24 10.28
Paper and Paper Products
Instruments and Machinery for
25 10.03
PTWBRPSP Cultural Activity and Office
26 8.95
Printing, Reproduction of Recording M edia 27 8.18 Work)
Textile Wearing Apparel, Footware and Caps 28 8.06
Leather, Fur, Feather and Related Products 29 7.67
2010-7-2 17

18. The Average Annual Growth Rate of
MICI from 2001 to 2008
T obacco
PPCPNF 12% Smelting and Pressing of Ferrous Metals
Articles For Culture, Education and Sport Activities CECOEE
Plastics T ransport Equipment
9%
PT WBRPSP Metal Products
Printing, Reproduction of Recording Media 6% Smelting and Pressing of Non-ferrous Metals
Artwork and Other Manufacturing Processing of Food from Agricultural Products
3%
Chemical Fibers General Purpose Machinery
0%
Foods Raw Chemical Materials and Chemical Products
Leather, Fur, Feather and Related Products Medicines
Special Purpose Machinery Furniture
Rubber Electrical Machinery and Equipment
MIMCAOW T extile
Paper and Paper Products Non-metallic Mineral Products
Beverages T extile Wearing Apparel, Footware and Caps
2010-7-2 18

19. 2007 2008 Top 10 industries
CECOEE 1
Rank Score
in terms of innovation
38.90
Transport Equipment 2 32.53 strength index of CM
Smelting and Pressing of Ferrous M etals 3 25.82
Electrical M achinery and Equipment 4 24.06 are as following:
Raw Chemical M aterials and Chemical Products 5 15.67 1. CECOEE (Communication
General Purpose M achinery 6 14.93
Special Purpose M achinery
Equipment, Computers &
7 11.79
Smelting and Pressing of Non-ferrous M etals 8 8.98 Other Electronic Equipment )
Textile 9 8.36 2. Transport Equipment
M edicines 10 8.13
Non-metallic M ineral Products 11 6.58 3. Smelting & Processing of
PPCPNF 12 5.31 Ferrous Metals
M etal Products 13 4.94
4. Electrical Machinery &
Processing of Food from Agricultural Products 14 4.48
M IM CAOW 15 4.48
Equipment
Tobacco 16 4.28 5. Raw Chemical Material &
Beverages 17 3.74 Chemical Products
Foods 18 3.07
Paper and Paper Products 19 2.77 6. General Purpose Machinery
Plastics 20 2.65 7. Special Purpose Machinery
Rubber 21 2.57
Textile Wearing Apparel, Footware and Caps 22 2.38 8. Smelting & Processing of
Chemical Fibers 23 2.07 Non-Ferrous Metals
Leather, Fur, Feather and Related Products 24 1.68
9. Textile
Artwork and Other M anufacturing 25 1.35
Articles For Culture,Education and Sport Activities 26 1.23 10. Medicines
Furniture 27 0.95
PTWBRPSP 28 0.83
Printing, Reproduction of Recording M edia 29 0.79
2010-7-2 19

20. 2007 2008 Top 10 industries
CECOEE
Rank Score
in terms of innovation
1 39.10
M edicines 2 36.57 effectiveness index of
Tobacco 3 36.07
Electrical M achinery and Equipment 4 32.45 CM are as following:
Transport Equipment 5 32.32 1. CECOEE (Communication
General Purpose M achinery 6 30.82
Equipment, Computers &
M IM CAOW 7 29.07
Special Purpose M achinery 8 25.06
Other Electronic Equipment )
Chemical Fibers 9 24.43 2. Medicines
Raw Chemical M aterials and Chemical Products 10 23.44
Rubber
3. Tobacco
11 22.56
Smelting and Pressing of Non-ferrous M etals 12 22.27 4. Electrical Machinery &
Smelting and Pressing of Ferrous M etals 13 22.10 Equipment
Furniture 14 21.18
M etal Products 15 20.53
5. Transport Equipment
Plastics 16 19.53 6. General Purpose Machinery
Beverages 17 19.50
Articles For Culture, Education and Sport Activities
7. MIMCAOW (Measuring
18 19.41
Artwork and Other M anufacturing 19 19.22 Instruments & Machinery for
Foods 20 18.24 Cultural Activity & Office Work)
Non-metallic M ineral Products 21 18.22
8. Special Purpose Machinery
PPCPNF 22 18.11
Paper and Paper Products 23 17.30 9. Chemical Fibers
PTWBRPSP 24 17.07 10. Raw Chemical Material &
Processing of Food from Agricultural Products 25 16.42
Textile Chemical Products
26 16.36
Printing, Reproduction of Recording M edia 27 15.58
Textile Wearing Apparel, Footware and Caps 28 13.74
Leather, Fur, Feather and Related Products 29 13.65
2010-7-2 20

21. Conclusions
 The evaluation method is more reasonable for innovation
capacity of CM, whose score is comparable not only among
industries, but also in the several years.
 Chinese government enhances innovation policies’ support for
technological development and industrialized activities, The
innovation capacity of CM has continuously been
strengthened in general.
 Many industries of CM quickly expand their scales of
innovative activities, obviously reinforcing their innovation
strength. However, the innovation effectiveness makes a little
progress that has been the important factor to hinder
promoting the innovation capacity rapidly.
2010-7-2 21

22. Conclusions
 To enhance creation, protection, utilization and management
capabilities for IPRs.
 To strengthen manufacturing design, system integration and
manufacturing capacity.
 To build innovation infrastructure and industrial R&D system so
as to speed up the restructuring and upgrading of industrial
structural.
 To boost the upgrading, extension and development towards
the service sector.
 To accelerate the development of the strategic emerging
industries.
2010-7-2 22

23. Thank You！
Phone(O):0086-10-62540631
E-mail: chenfang@casipm.ac.cn
Address: No. 55, East Zhongguancun Road,
Haidian District, Beijing City
2010-7-2 23