Effect of Economic Growth of China on Technological Innovation and Government Policy(2006年公共管理国际会议论文).docVIP

Effect of Economic Growth of China on TechnologicalInnovation and Government Policy 1.ZHAO Yu-lin 2.ZHOU Shan-shan 1.School of Economics, Wuhan University of Technology, Wuhan, P.R.China, 4300702. Guizhou University, Guiyang, P.R.China, 550025 Abstract This paper initially analyzes the effect of economic growth on output of innovation and afterward the effect of expenditure on RD output of innovation by using Granger Causality Test and Regression Analysis, based on the data from 1989 to 2004 released by the China Statistical Bureau. The results show that there is a strong correlation between innovation output and the economic growth level. However, different economic growth levels contribute differently for increasing innovation outputs. Currently, there were some constraints, which restrict the enhancement of innovation capacity such as education, Chinese culture, government polices and so on. If those factors were not identified and improved properly, the innovative output would not increase as expected along with the development of economy even if the expenditure on RD was increased. Key words Innovation Output, Economic Growth, RD Investment 1 Introduction National Guideline of Long and Medium-Term Strategy for Science and Technology Development (2006 – 2020) published by the State Council of China on February 2, 2006 declares that by 2020 China will turn into an innovative country. The basic indexes for achieving above goals published by Chinese Government are that the contribution rate of science and technology to economic growth should be increased up to 60% and the proportion of expenditure on Research and Development (RD) to Gross Domestic Product (GDP) should be increased up to 2.5%. The experiences of industrialization of industrialized countries show that almost all developed countries had been experiencing a 10 year mutation stage, which is in the middle of so-called S-type development curve proposed by economists. The main feature of the mutati