Prof. Tao Talks with SSZD: From City of Innovation to Birthplace of Innovation


Shenzhen Special Zone Daily (SSZD) Front-Page Interview with Prof. Tao: From City of Innovation to Birthplace of Innovation.

       The 7th Shenzhen Municipal Congress of the Communist Party of China was convened April 27-30. The Congress proposed to uphold innovation-driven growth as the leading strategy for Shenzhen’s development, and build the city into a high ground of technological and industrial innovation with national influence. The Congress also announced the goal of boosting Shenzhen’s ability in leading in, driving and underpinning innovation and its hard power in innovation. It unveiled a blueprint of transforming the city into a birthplace of original innovations, a place of origin for critical core technologies, an ideal place for tech transfer and commercialization, a model place for deep fintech integration, and a pilgrimage place for top-notch innovators. Commenting this event, Prof. Tao Yitao, Director of CCSEZR and former Deputy Secretary of the Party Committee of SZU, says, “These groundbreaking initiatives for innovation at the 7th Municipal Congress of CPC will provide institutional safeguards for innovation, and drive Shenzhen’s transformation from a City of Innovation to a Birthplace of Innovation for China with worldwide traction, as well as an institutional growth pole that can continuously release a ‘diffusion effect’.”
       She believes that the goal of boosting the “Five Powers” and the blueprint for creating the “Five Places” not only show a recognition of Shenzhen’s existing foundation for development and her uniquely favored factor endowment, but also define the new height of Shenzhen’s positioning with the dual identity as a Special Economic Zone and a Pilot Demonstration Zone, showing where the momentum for future development lies, and pointing out a new direction of exploration for Shenzhen, which has ushered in a golden development period, driven and supported by the challenge and advantages of her dual identity. To boost the “Five Powers”, Shenzhen must firstly improve her institutional safeguard system.
       How can the “Five Powers” be strengthened? Prof. Tao points out, “To improve our innovation leadership power, hard power, driving power, support power and motivating power, we must first and foremost build a stronger institutional safeguard system.”
       “Give me a new set of institutional arrangements, and I’ll give you a new pattern of behavioral choice.” The institutional environment affects innovation by determining the behavioral choice pattern of economic agents in a market economy. Innovation markets with institutional and legal safeguards can stimulate human innovation actions. None of this can be done without the support of a government that champions reform.
Government is the provider of the social institutional system. A courageous and innovative government must precede an innovative society. Therefore, the enhancement of the “Five Powers” requires, first of all, the improvement of the government’s ability for institutional innovation and of its institutional performance in promoting innovation. The success of Shenzhen as a Special Economic Zone for the last four decades has proved that the power of the institutional system is enormous; it is not only a “wealth” that can create wealth, but is itself a “wealth” with rare qualities. Therefore, in the process of transforming the grand blueprint into a beautiful reality in the future, Shenzhen should continue to innovate on the system, enrich its dimensions, improve its precision, and provide a powerful institutional safeguard for innovation.
       To create the “Five Places” as an important infrastructure for Shenzhen to achieve innovation leadership
What does it mean to create the “Five Places”? Prof. Tao believes that the proposal to create the “Five Places” as an important infrastructure for Shenzhen to realize the grand blueprint of innovation leadership in the future, not only shows Shenzhen’s acceptance of her responsibility as the Pilot Demonstration Area, but also her response to the mission of serving as the core engine for the Greater Bay Area.
       First, the initiative to create an “important birthplace of original innovations”, we need both top-notch talents and top-notch foundational research platforms. The Shenzhen government’s strategy of accelerating the construction of the Greater Bay Area Comprehensive National Science Center and the Conglomeration of Mega-Science Laboratories will effectively promote the establishment of a birthplace of original innovations.        The multiple-source, integrative model of “government + enterprise + social” investment in foundational research can bring together the diverse investment players and channels, and enable the government to guide market behaviors towards solving the problem of funding Shenzhen’s foundational research, helping Shenzhen to spearhead the China’s strategic science and technology advancement, and to provide the whole country with replicable and instructive experience in foundational research investment.
       Second, the initiative to create a “place of origin for critical core technologies” shows the new ambition and new responsibility of Shenzhen as the City of Innovation. That is, Shenzhen will move gradually from the domestic “mass entrepreneurship and innovation” scene to the center of the world innovation stage; and grow gradually from a virgin land for innovation and entrepreneurship into a global hub of innovation. Thus, the “place of origin for critical core technologies” and the “birthplace of original innovations” are two strategic initiatives that support each other: original innovation includes the R&D of critical core technologies, i.e., critical core technologies are generated within the “birthplace of original innovations”; on the other hand, the generation of critical core technologies enriches the connotation of the “birthplace of original innovations” and demonstrates the policy release effect of the “birthplace”. The “birthplace” and the “place of origin” will jointly provide a broad “system + technology” platform for original innovation.
       Third, the initiative to create an “ideal place for tech transfer and commercialization” is to build an industry-university-research “one-stop” industry chain for tech innovation. The formation of this industry chain can accelerate the transformation of research results into tech products, shorten the path from R&D to application and value realization, to reduce transaction costs, speed up the turnover of R&D funds, and enhance the profit and efficiency of R&D.
       Fourth, the initiative to create a “model place for deep fintech integration” is to build a new business model of tech innovation, as well as a new business model of financial services. This integration is by no means a simple combination of two business types, but the creation and generation of an entirely new business. Therefore, it is of strategic importance to create the National Pilot Zone for Fintech Reform and Innovation, to support Shenzhen Stock Exchange’s initiatives to build a high-quality innovation capital center and a world-class stock exchange, to accelerate the construction of a benchmark city for the protection of intellectual property rights, to build an international hub of venture capital and innovation capital, and to build a global benchmark city for fintech. These innovative explorations and practices in Shenzhen today, can be emulated by other regions in China in the tomorrow.
       Fifth, the realization of a “pilgrimage place for top-notch innovators” is an important test for the city’s internationalization success. An international city must be a place where international factors of production, especially human capital, can move freely without institutional barriers. The most fundamental attraction to international talents is a relaxed and inclusive institutional and cultural environment. If openness is mainly an economic concept, then internationalization is a comprehensive concept that spans over economy, politics, culture, institutions and the humanities. The strategic goal of creating a “pilgrimage place for top-notch innovators” is to transform Shenzhen from an open city to a truly international city in terms of institutional environment. If the future of Shenzhen’s development will depend on sound strategies, then the height of her development will depend, to a considerable extent, on internationalization.
       A deeper dimension of innovation policy is to bring about a shift in people’s mentality through the impact of innovation.
       Prof. Tao believes, for today’s Shenzhen, innovation is not just a unique characteristic of the city, but has evolved into the city’s unchanging development strategy. Innovation is not only a valuable spiritual asset of the city, but also a decisive factor in shaping the city’s future development.
       “The more vital aspect of innovation is its ability to change people’s mentality and transform society with the power of ideas.” In the long run, the cultural and mental gains that innovation brings to humanity will prove even greater than the wealth or GDP created by innovation. “This is perhaps the deeper significance of the Shenzhen’s 7th Party Congress which upholds the innovation drive as the leading strategy for the city’s development, and aims to build a tech and industry innovation high ground with global influence.”
       This article is reproduced from page A1 of Shenzhen Special Zone Daily, issued on May 4, 2021  ■          Shenzhen Special Zone Daily reporter Zhao Xin
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