1. For a summary of the various issues involved in this relationship see Williams, B. R. (ed.), Science and Technology in Economic Growth (London: Macmillan, 1973)CrossRefGoogle Scholar.

2. See C. Freeman, “A study of success and failure in industrial innovation,” in ibid. p. 228. See also OECD, Policies for the Stimulation of Industrial Innovation, Analytical Report, Vol. 1, OECD, Paris, 1978, pp. 25–26Google Scholar. The distinction between product and process innovation is not analytically very precise, though it does have some use. For example, most innovations in the chemical industry are process innovations whilst those in the scientific instruments and consumer goods industries are product innovations. The former usually act in a “cost lowering” manner whilst the latter, in the form of new and improved goods, tend to meet better perceived needs or demands than existing products. When the whole production process is considered, however, what is seen as a product innovation for a machine manufacturing plant for example, may be viewed as a process innovation for the user of that machine.

3. These elements include some or all of the following: basic invention/research/advanced development; preparation of project requirements and specifications; prototype or pilot plant design, construction and testing; production planning; tooling, construction and installation of manufacturing facilities; manufacturing start-up; marketing start-up. Stead, H., “The costs of technological innovation,“ in Research Policy, No. 5 (1976), pp. 4–5CrossRefGoogle Scholar. Conventional wisdom holds that R & D costs normally constitute only around 15–30% of the total costs of transforming an idea into an innovation in production. Stead's paper however questions this widely-held assumption.

4. For a comprehensive summary of the debate and a rejection of the view that market demand is the sole, or even principal determinant, see Mowery, D. and Rosenberg, N., “The influence of market demand upon innovation” in Research Policy, No. 8 (1979), pp. 102–153CrossRefGoogle Scholar.

5. There appears to be considerable confusion and debate within Chinese science-policy circles as to the most appropriate classification of the activities involved in the research-production process. The following sequence was compiled from the following sources: Wenhuibao, 21 May 1981, p. 3; Kexue-jishu-guanli (Science-Technology-Management). Collection of the Second (1980) National Science of Science Academic Symposium. World Science Publishers. Beijing, p. 131Google Scholar; Kexuexue yu kexue jishu guanli (Science of Science and S & T Management – hereafter referred to as Kexuexue), No. 1 (1981), pp. 13–14Google Scholar. Basic/applied research, the latter referring to the laboratory stage of creating new products/technologies, etc. At this stage research results are only latent productive forces.Developmental research includes those activities necessary to turn results into direct productive forces, i.e. products/processes. They include pilot and industrial experimentation. A final stage of the innovation process “the promotion and application of S & T results” is often used to denote both those activities concerned with solving problems connected with the finalization of design specifications, tooling up, actual trial-production, small-scale and regular production and also the diffusion of new technology throughout the production system.

6. “Let S&T play a greater role in economic construction,” Kexuexue, No. 4 (1981), p. 44Google Scholar. No mention is made of the fact that most of China's modern industrial sectors are based on technology imported from the Soviet Union and East European countries in the 1950s.

7. For example the machine-building industry, the largest industrial sector whose te chnical level would significantly affect most other industrial sectors, has claimed that of 2·8 million machine tools produced and still operating, only 900,000 are of any real use, and these appear mainly to have been produced in the 1953–57 period. It is claimed that most machine tools used by the various machine-building ministries are over 20 years-old. See Jingji guanli (Economic Management), No. 10 (1981), pp. 5–6Google Scholar for further details. For an evaluation of the chemical industry's technological level see Guangming ribao, 7 April 1981, p. 2. In Shanghai's light industrial sector, 40% of the equipment is of 1930s and 1940s vintage, 50% of 1950s technological level and only 10% of 1960s and 1970s technological level. Jiefang ribao, 2 June 1981, p. 4.

8. See for example the survey of 35 electrical and machinery plants in Shanghai, the country's most advanced technological base. Of 947 new products developed and trial-produced from 1968 onwards, only 24% reached advanced domestic (i.e. international 1960s levels) or international (1970s) technological levels. The situation may in fact be worse than these figures suggest, as only one-third of the total number of products trial-produced ever went into any type of batch production. “Suggestions on management of new product development and its improvement,” Kexuexue, No. 2 (1980), p. 15Google Scholar. It is conjectured that the products incorporating more sophisticated technology formed a higher proportion of the total of “failed” innovations than those incorporating a lower level of technology.

9. Beijing Review, No. 16 (20 04 1981), pp. 6–7Google Scholar; for the full version see Guangming ribao. Editorial, 18 April 1981, p. 1. For criticism of previous policy see Jiefang ribao, 2 June 1981, p. 4.

10. Guangming ribao, 20 March 1979, p. 2.

11. For other examples of this phenomenon which is most noticeable precisely in those disciplines which demand a high level of expertise, and large amounts of funds and sophisticated equipment see jiefang ribao, 2 June 1981, p. 4; Kexuexue, No. 1 (1980), p. 17Google Scholar.

12. Jiefang ribao, 2 June 1981, p. 4; see alsoGuangming ribao, 22 August 1980, p. 4.

13. For a discussion of this, see Parrot, B., “Organisational environment of applied research” in Lubrano, and Solomons, (eds.), The Social Context of Soviet Science (Colorado: Westview, 1980), pp. 80–81Google Scholar.

14. Kexuexue, No. 2 (1980), p. 12Google Scholar. The usual claim made is that 40% of research, work done in China has duplicated work already done abroad.

15. See Kexuexue, No. 1 (1980), p. 16Google Scholar for some examples of this phenomenon.

16. Kexuexue, No. 1 (1980), pp. 18–19Google Scholar.

17. As only 5% of all research funds in China are spent on basic research [Keyan Guanli (Research Management), No. 1 (1982), p. 12]Google Scholarand a significant proportion of the country's highly qualified research personnel are concentrated in CAS and the higher education sector, the main orientation of each is bound to be applied and developmental.

18. For further details see Guangming ribao, 1 August 1980, p. 4.

19. See for example the experiment at the Acoustics Research Institute of the Chinese Academy of Sciences in Renmin ribao, 16 December 1980, p. 3.

20. Guangming ribao, 1 December 1981, p. 2. For a discussion of this issue in applied research institutes see Wenhuibao, 12 February 1981, p. 4. See Guangming ribao, 24 February 1980. p. 2 for problems raised by a research unit leadership with no scientific expertise.

21. For example, in a sample of 749 new products developed in Shanghai between 1968–77, 82% had not been subjected to any preliminary technical evaluation before development work started and virtually none was investigated with respect to its potential economic impact. Kexuexue, No. 2 (1980), p. 15Google Scholar. For a discussion of the criteria of economic rationality, technological feasibility and social consequences see ibid. No. 2 (1980), pp. 11–14. For a study of the problems of past project selection in Tianjin see ibid. No. 3(1981), pp. 6–8.

22. See for example the problems discussed in Zaitsev, B., “Determining the effectiveness of technical innovations” translated from Voprosy Ekonomiki, No. 10 (1977)Google Scholar in Problems of Economics, Vol. 21, No. 2 (06 1978), pp. 23–42CrossRefGoogle Scholar. For examples of Chinese models see Kexuexue, No. 3 (1981), pp. 23–24Google Scholar; Keyan guanli. No. 2 (1982), pp. 58–61Google Scholar.

23. For the “profit rate” in various industries see Beijing daxue xuebao (Beijing University Journal), No. 4 (1981), p.80Google Scholar.

24. Guangming ribao, 9 December 1981, p. 4.

25. Wenhuibao, 7 February 1981, p. 1.

26. Guangming ribao, 9 December 1981, p. 4.

27. See Sigurdson, J., Technology and Science in the PRC (Oxford: Pergamon Press, 1980), pp. 66, 70, 73Google Scholarfor estimates.

28. Kexue-jishu-guanli, p. 126.

29. For example, in a recent year the First Ministry of Machine-Building, one of China's largest ministries, only allocated 0.15% of its total annual budget to R & D. This it was claimed was distributed “evenly” to its research units from central downto local levels. See Kexuexue, No. 1 (1980), p. 17Google Scholar.

30. See for example Renmin ribao, 29 January 1981, p. 3. For a discussion of how production units can generate more funds for R & D see Guangming ribao, 1 August 1980, p. 4.

31. Bingqian, Wang, “Report on financial work, ” Beijing Review, No. 39 (1980), pp. 17, 19Google Scholar.In 1980 and 1981 the total funds available were around 25 billion yuan. Beijing Review, No. 22 (31 05 1982), p. 17Google Scholar.

32. For an example of the now ritual pleas for greater mobility and the present problems obstructing reforms in this area, see Guangming ribao, 9 December 1981, p. 4. For the concept of “directed mobility” see Renmin ribao, 8 March 1982, p. 5.

33. See for example the problems met in the attempted transfer of a new type of medical equipment inKexuexue, No. 3 (1981), p. 44Google Scholar. For indirect evidence that some research units are exploiting their position by charging exorbitant fees and only dealing with factories which are highly profitable see Guangming ribao, 4 October 1981, p. 1. The contract system clearly contains the potential for clashes to occur between the interests of individual units and society as those plants most in need of infusions of new technology may be the least likely to get it.

34. For such criticism and an example of the size of income needed by a CAS unit to become financially independent see Kexuexue, No. 1 (1981), pp. 25–26Google Scholar.

35. See Kexue-jishu-guanli, pp. 118–20 for a summary of the proponents' arguments.

36. For one much publicized case see Renmin ribao, 21 October 1980, p. 3; forother Criticism see Renmin ribao, 9 December 1980, p. 3; Guangming ribao, 15 November 1980, p. 1.

37. The light and collectively owned sectors- are seriously short of engineering and technical expertise. For example S & T personnel account for just 1% of the total workforce of Shanghai's handicrafts industry and only 0.35% of Shandong's light industry workforce. fingji yanjiu, No. 4 (1980), p. 14Google Scholar. Some regions have guaranteed that personnel transferring from heavy to light industrial plants can retain unspecified “rights, ” held whilst working at their old unit. Guangming ribao, 9 January 1982, p. 2. Technicians and engineers are also ftheOuraged to move from large to small, state-owned to collectively-owned factories and from the defence to the civilian sector.

38. For example, to transfer just 16 technical personnel from a chemical plant in Siping Municipality controlled by the province to one under Siping municipal leadership, five organizations were involved (these were the two factories, the municipal departments of labour and personnel and the Jilin Provincial Petrochemical Industry Bureau). For details see Guangming ribao, 20 September 1980, p. 2.

39. The celebrated case of Gu Zhiyu is one such example. See Renmin ribao, 21 September 1980, p. 3.

40. For an illuminating exposé of such a situation in a higher education institute see “The fate of an inventor, ” Renmin ribao, 3 November 1981, p. 3.

41. For a discussion of this issue see Conroy, R., “Recent issues and trends in Chinese policy towards science and technology, ” in The Australian Journal of Chinese Affairs, No. 6 (1981), pp. 175–76CrossRefGoogle Scholar.

42. The prizes have tended to be shared out with little regard for rewarding the personnel who made the most contributions. Thus, one award of 2, 000 yuan was shared between 800 people most of whom had little or nothing to do with the innovation work and some of whom actually opposed it. See Renmin ribao, 3 November 1981, p. 3. Apart from the fact that a few yuan as bonus is unlikely to do much to anyone's enthusiasm, especially when many ordinary production workers get many times this amount each month, the egalitarian aspects of distribution of such awards, meant to illustrate that people who work harder/better will receive more, would probably arouse more resentment and division than if no awards were offered.

43. For criticism of tying promotion to purely academic work see New China News Agency-Chinese, 18 June 1981, BBC Summary of World Broadcasts, Part 3: The Far East (hereafter SWB, FE), 6755/B11/14.

44. Most estimates give a figure of a domestic utilization rate of around 10%: Wenhuibao, 21 May 1981, p. 3; other estimates given are 30%: Kexuexue No. 3 (1981), p. 19Google Scholar; for CAS it is estimated that in 1977 only 14% of all its applied research results were transformed into productive forces: Guangming ribao, 1 August 1980, p. 4.

45. Many areas in the past year have reported utilization rates of 70% and above, though presumably most of these only lead to incremental innovations.

46. Renmin ribao, 19 May 1981, p. 3. This view was expressed by three leading members of the academic board of the Chinese Academy of Sciences.

47. Wenhuibao, 24 June 1981, p. 2; ibid. 9 May 1981, p. 3; Kexuexue, No. 1 (1981), pp. 56–57Google Scholar.

48. Renmin ribao, 14 May 1981, p. 3.

49. For example they can argue that heavy current production tasks preclude taking on additional developmental tasks or that existing production facilities, etc., are inadequate, necessitating heavy additional investment.

50. Wenhuibao, 21 May 1981, p. 3.

51. Kexuexue, No. 2 (1980), p. 17Google Scholar.

52. Ibid. No. 1 (1981), p. 58.

53. For example, Shanghai's Electrical and Machinery Bureau new product R & D fund is only 0.25% of its total output value: ibid. No. 2 (1980), p. 17.

54. Guangming ribao, 21 August 1979, p. 2; Guangming ribao, 5 July 1981, p. 1; Renmin ribao, 14 May 1981, p. 3.

55. Guangming ribao, 4 April 1980, p. 1; NCNA-Chinese, 3 April 1980 in SWB, FE/W1078/A/7–8.

56. See Xinhua Domestic Service, 21 March 1979, in U.S. Foreign Broadcast Information Service Daily Report-China, 28 March 1979, Ll-11 for a description of apathy towards this work.

57. For further criticism see Kexuexue, No. 3 (1981), pp. 56–57Google Scholar. For a survey of their overall regional role see Conroy, R., “China's local scientific research sector: its role, impact and future prospects, ” in The Australian Journal of Chinese Affairs. No. 7 (1982), pp. 100–103CrossRefGoogle Scholar.

58. For examples see Guangming ribao, 19 May 1981, p. 2; Guangming ribao, 10 November 1980, p. 2; Wenhuibao, 26 June 1981, p. 1.

59. Kexue-jishu-guanli, p. 91. For a description of industrial combines in general see Gongye shengchande zhuanyehua xiezuo yu gongye gongsi (Tianjin: Renmin chubanshe, 1980)Google Scholar, passim..

60. For examples of each type see Guangming ribao, 7 March 1982, p. 1.

61. For details of one highly-developed combine see Renmin ribao, 12 January 1981, p. 1.

62. See for example the situation in the chemical industry, Guangming ribao, 7 April 1981, p. 2.

63. For a survey of the areas in which legislation on S & T activities is considered necessary see Guangming ribao, 7 November 1980, p. 4.

64. Kexuexue, No. 1 (1981), p. 32Google Scholar.

65. For the serious problems that have arisen over units protecting technology in Nanjing prefecture see Renmin ribao, 28 May 1981. p. 3.

66. Wenhuibao, 11 February 1981. p. 1. For a reiteration of some of these points, see Renmin ribao, 14 May 1981, p. 3.

67. For typical arguments favouring the establishment of a patents system which backs up the views favouring the protection of technical secrets see Beijing ribao, 27 February 1981, p. 3. For a statement of intent on the structure, scope and coverage of the new patents law see Jianxin, Ren, “Some legal aspects of the import of technology and the utilisation of foreign investment in the PRC, ” in International Review of Industrial Property and Copyright Law, Vol. 12, No. 1 (1981), pp. 25–27 espGoogle Scholar.

68. Patent Bureaus are already active in such work. See, e.g., mention of the formulation of the document “Trial regulations for technical protection and compensation for transfer in Shanghai Municipality” drafted by Shanghai S & T Committee and the Ibranch Patents Bureau in Wenhuibao, 27 May 1981, p. 1.

69. For example, of 749 new products developed in Shanghai, 63% were not formally appraised before going into production. Kexuexue, No. 2 (1980), p. 15Google Scholar.

70. For severe criticism of the mode and operation of appraisal work of results of an applied and theoretical nature see the following: Guangming ribao, 21 August 1981, p. 2 (two articles); Guangming ribao, 22 August 1980, p. 4; Guangming ribao, 25 October 1980, p. 2; and esp. Guangming ribao, 26 December 1981, p. 2.

71. The refusal to divulge key parts of technology being assessed has been a widespread phenomenon in recent years, with units developing new technology thus putting pressure on the government to introduce regulations which protect their findings from plagiarization and consequent loss of prizes and/or competitive advantages. Beijing ribao, 27 February 1981, p. 3.

72. Production units have recently been reluctant to supply details of new operating procedures or what is called “mature technology” (i.e. technology which has been proven in production) or new varieties of products to fraternal units and honour contracts to transfer such technology for fear of competition. This has prompted the Shanghai Textile Industry Bureau, for instance, to issue a notice criticizing such practices. See Wenhuibao, 21 April 1981, p. 1.