Re-engineering the Innovation Chain

Since 2020, China has dramatically increased the ambition, scope, and resources of its technology and industrial policy. Besides devoting more resources, the government has also expanded direct intervention in the economy, creating new organizational forms in order to link researchers, technology providers, and firms. This program aims to re-engineer the innovation chain—and with it, the entire industrial economy. The government intervenes by creating new organizations, remaking incentives of existing organizations, and serving as a compulsory matchmaker between different organizations and firms. These new organizational interventions increase the extent to which the government steers the overall economy and is leading Beijing to take an even more comprehensive and government-directed approach to technological and industrial development.