FIGURE 8 R&D expenditure in China (billion RMB Yuan) SOURCE: Source: Adapted from S&T Statistics Data Book (2001-2006) Chinese Ministry of Science and Technology

• providing direct financial support;

• encouraging adoption of imported, assimilated technologies; and

• enhancing protection of intellectual property rights with higher standards, faster processing of applications, better trained and qualified reviewers, and facilitation of the flow of patented technology to enterprises.

In addition to national government initiatives, localities have instituted incentives for science and technology investment, with the result that S&T expenditures have increased dramatically in most provinces, even since 2006. Nevertheless, a great many enterprises have yet to benefit from national and regional innovation policies, either because of a lack of awareness or because the rules for taking advantage of the incentives are complicated.

China’s goal of becoming an innovation-driven country is highly ambitious. It depends on many factors including an innovation-friendly internal culture and effective foreign investment. Fields in which it is believed China can make a substantial unique contribution to global science and technology include biology and Chinese medicine, nanotechnology, space science and technology, and energy.

Venkatesh Aiyagari described India’s changing research infrastructure. The driving factors in scientific innovation are investigators’ passion for a discipline, for crossing intellectual boundaries, and for meeting society’s needs. Early pioneers in Indian innovation focused on improvements in agricultural and dairy production, led by the TATA Institute of Fundamental Research (TIFR), and in space and satellite technology, led by the country’s defense laboratories and Council of Scientific and Industrial Research (CSIR).

Today, recognizing that Chinese investment in R&D far outpaces India’s, the country aims for faster and more inclusive growth, according