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Technological progress and innovation are the most enduring drivers of economic growth and important engines of competitiveness (Porter, 1992). According to data published by the World Intellectual Property Organization (WIPO), the number of international patent applications filed through the Patent Cooperation Treaty (PCT) reached 265,800 in 2019, representing an annual growth rate of approximately 5.2%. China filed 58,990 patent applications under the organization’s PCT framework in 2019, surpassing the 57,840 filed by the United States, making it the country that filed the most international patent applications. This represents a 200-fold increase in 20 years compared to 1999, when the organization received 276 patent applications from China. Developed countries have been shown to outperform developing countries in economic development through science, technology, and innovation. Figure 1 shows comparisons between China and other major economies in terms of R&D expenditure and patent applications over a 20-year period—between China and East Asian countries (Japan and Korea), European countries (Germany, France, the United Kingdom, Spain, Denmark, Austria), and the United States of America. The second column presents a comparison among China, Indonesia, Malaysia, and Thailand. The third column shows comparisons between China and Brazil, Argentina, Mexico, and other Latin American countries, such as Colombia, Uruguay, and Chile. Figure 1 shows that developed countries in the West have always attached importance to technological innovation and intellectual property rights, and their innovation input and output are at an advanced level in the world. East and Southeast Asian countries are also moving over time in terms of innovation development. China’s technological innovation has expanded quantitatively along with its rapid economic development and is growing at a faster rate overall. Further, China’s science and technology innovation has increased in volume along with its rapid economic development and is growing at a faster rate overall. The rate of investment in science and technology research has not slowed in recent years, although the rate of increase in the number of patent applications has decreased significantly. This phenomenon was related to the “high-quality development” after 2017. This refers to the shift in the Chinese economy from a stage of high growth to a stage of high-quality development, which fundamentally lies in the dynamism, innovation, and competitiveness of the economy. This is reflected in solving the problems related to imbalances and inadequacies faced in development by transforming the development mode, optimizing the economic structure, transforming the growth momentum, and improving the quality and efficiency of economic development holistically. Thus, innovative development is no longer merely about increasing numbers, which is manifested in a slowdown in the slope of the folding graph. In 2018, the WIPO and Cornell University published the “Global Innovation Index Report 2018,” in which China ranked 17th for the first time.
Figure 1. International comparison of innovation inputs and outputs in China
Notes: The data source for Figure 1 is the CEIC① China database. R&D includes basic research, applied research, and experimental development. R&D expenditure is expressed as a percentage of GDP for the total domestic expenditure on R&D of the sample. It specifically includes capital and recurrent expenditures in four relevant sectors: business, government, higher education, and private nonprofit organizations. Patent applications are worldwide patent applications filed through the PCT process or with national patent offices. Data are in logarithmic form to avoid changing the nature of the data and relationships, achieve a compression of the scale of the variables, and reduce covariance and heteroscedasticity.