Technology and Policy

0EE30

Role of Dutch Universities in opportunities

arising for the ‘Dutch innovation system’
from the emerging ‘Chinese innovation
system’

Suyash Jolly (0666185)

Table of contents
1
1. Introduction
1.1 Background information and motivation for the problem
1.2 Research question and sub questions
1.3 Structure of the report

2. Role of China in the global innovation system

2.1 Potential global implications of China’s transformation in the tertiary education
sector

3. Conceptual framework
3.1 Innovation Policy and National systems of innovation
3.2 Triple Helix model (University-Industry-Government)
3.3 Role of Universities in National innovation system

4. Tertiary education system in the Netherlands

5. Tertiary education system in China

6. Key challenges for the Dutch innovation system for tertiary education

7. Key challenges for the Chinese innovation system for tertiary education

8. Opportunities for Dutch innovation system for tertiary education from the
Chinese system

9. Conclusion
9.1 Answer to research question
9.2 Policy recommendations for the Dutch government

10. Scope for future work and limitations

11. References

12. Appendix

Annexure A
4. Tertiary education system in the Netherlands
4.1 Human resources in the tertiary education system
4.2 R&D activities, output and spending of Dutch universities
4.3 Linkages between universities, government and Industries (Triple Helix)
4.4 Internationalization of the tertiary education system in the Netherlands and its
implications

Annexure B
5. Tertiary education system in China
5.1 Human resources in the tertiary education system
5.2 R&D activities, output and spending of Chinese universities
5.3 Linkages between universities, government and Industries (Triple Helix)
5.4 Internationalization of the tertiary education system in China and its implications

1. Introduction

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1.1 Background information and motivation for the problem

In line with the EU’s Lisbon agenda the Dutch government has defined its strategic objective
to be among the top five knowledge economies of the world. The Dutch government is also
trying to implement a new set of policies, institutions and instruments in order to encourage
university research, more public private partnerships for further research and innovation at
the regional as well as national level. (Hulsink et al, 2007). The Netherlands is also gradually
becoming more knowledge-intensive, where economic growth to a large extent depends on
highly skilled labour force. A sustainable knowledge-intensive economy is also dependent on
an excellent educational system and high quality scientific base. The Dutch national
government also recognizes that development in education and research are one of the key
conditions necessary for the Netherlands becoming one of the top knowledge economies of
the world. (Tijssen et al, 2008).

The Dutch innovation platform which was started in 2003 was focused on solving the ‘Dutch
Knowledge Paradox’ which is the difference between deployment and availability of
knowledge. The high quality research in the public sector finds no place in the commercial
sector and the society in large. The Dutch innovation system therefore needs large
improvement in terms of collaboration from all concerned stakeholders like universities,
public research institutes, firms and other organizations.

The Wijffels committee set up by the innovation platform gave a number of

recommendations on the above issues. Some of them are
1. Ways in which Education can contribute to the innovation system by linkages between
universities, industry and government
2. More investment in education and training in research and development
3. Organizational and institutional renewal (Educations Contribution to Dutch Innovation
system, 2005)

Knowledge and talent are the most important resources for the Dutch knowledge economy
and due to increasing demand, they are becoming increasingly scarce. The Netherlands
might face shortage of knowledge workers in the long run and also hamper its objective of
becoming one of the top knowledge economies of the world. The shortages of knowledge
workers in the future might make international investors reluctant to invest in the
Netherlands or even establish their R&D centers in the Netherlands. (Linking Knowledge
worldwide, Nuffic).

The demand for highly-skilled workers and growing concerns about ageing populations has
translated into a global competition for talent. In the EU 700,000 additional researchers will
be required merely to reach the Lisbon research goals in 2010 and it will be almost difficult
for EU to meet the goals with the EU population itself and further immigration of students
and researchers will be needed on a massive scale. China alone produced 10.8 million upper
secondary graduates in 2005 which is almost 2.5 times the average value in EU nations. It
has also surpassed the EU target for number of tertiary graduates who are more inclined
towards scientific subjects like mathematics, sciences, computing and engineering which are
very important for innovation and building technological capability. This also suggests that
in the future China can become one of the important knowledge based economies.(Tremblay
et al, 2006)

The focus of this report is therefore on how the Netherlands can become one of the top
knowledge economies of the world and how China can play an important role in it. The other
issues to focus are that how can Dutch universities and public research centers play an
important role in making the Netherlands one of the top knowledge economies of the world
by collaborating with the Chinese counterparts.

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1.2 Research question and sub questions

The following research question and sub question are formulated for the research

Research question: How can the Netherlands become one of the top knowledge
economies of the world and how does China play an important role in it?

Sub Questions

1. What opportunities can Dutch universities encounter when Chinese universities are
increasing their level of knowledge and research?

2. How interesting is research co operation and international mobility of students and

researchers among Dutch and Chinese universities?

1.3 Structure of the report

The report first discussed the motivation behind discussing this problem and presented the
research question and the sub questions which are focused on role of Universities in making
the Netherlands one of the top knowledge economies of the world. The next section focuses
on the role of China in the global innovation of which all the nations are a part of and why co
operation with China can be interesting for most OECD countries and for the Netherlands
also and what could be the negative implications if China’s role in the global innovation
system is not emphasized and countries do not recognize the importance of China. The next
section describes the conceptual framework being used which is the national systems of
innovation and the triple helix model. The triple helix model focuses on the linkages
between the universities, industry and government which are also essential for a country.
The next section describes the tertiary education system in the Netherlands and China and
discusses how tertiary education system is very essential and contributes to the goal of
making countries top knowledge economies.

The report then focuses on the fact that how universities contribute immensely to the
national systems of innovation. We then discuss the role of universities in the Dutch and
Chinese innovation system in terms of R&D areas, linkages between universities and
Industries, R&D spending, joint research centers and internationalization of the tertiary
education system. The next section focuses on opportunities for the Dutch innovation
system arising from the Chinese system. The report ends with answer to the research
questions with policy recommendations for the Dutch government and a section on the
limitations of the report.

2. Role of China in the global innovation system

The rise of China as a significant player in Science and technology and innovation has
important implications for the global knowledge and innovation system. China will also make
a positive contribution to the global knowledge production and use which can be used to
address global issues. However this will also create competitive pressures and give rise to
concerns and issues that must be dealt with appropriately for the other nations. It is also
important that China’s emergence should be viewed as a threat and China’s successful
integration into the global innovation system will require co operation and an open attitude
from the other nations in terms of avoiding reverting back to policy measures which impede
trade, capital and knowledge flows. (OECD Report China, 2008, pp.18)

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Some of the statements by Dutch government authorities also reflect on this important issue

“I call on Dutch students to find out for themselves what they can learn from
China or India ‐ and I don't mean as New Age tourists, but as hard‐working and
ambitious students. Discover this shrinking world for yourself!” (Ben Bot, former
Dutch Minister of Foreign Affairs. Speech given at “China Day” in The Hague. 12 April 2006)(
Nuffic,Linking knowledge worldwide,Renewed urgency for internationalization in higher
education)

A major challenge for China is to make its future development economically, socially and
ecologically sustainable. China should focus on implementation strategy to promote more
innovation driven growth. China should develop its innovation capacity and should try to
escape from intensive of low skilled labour, extensive use of natural resources and low level
of technological capabilities. Also in spite of its recent technological achievements China has
still to work hard in order to build a modern, high performance level national innovation
system by overcoming its current institutional and structural weaknesses in the national
innovation system. From an international and global perspective the integration of the China
into the global innovation system is very important. The integration needs to be managed
well as if it is done well then this could give rise to positive outcomes in the development of
China which will not only be useful for China but also for the entire world.(OECD Report
China,2008)

China’s emergence as an innovation based economy will also lead to more vigorous
competition in the production and application of global knowledge which will have a deep
impact on the global innovation performance. China also has the potential in terms of
contribution of human resources and knowledge pool to the global innovation system and
even solve some of the global issues like strong demand for energy and natural resources.
An increase in the domestic innovation capabilities in China will also increase foreign
investment which will also have a long term impact on the global innovation performance.
(OECD Report China,2008,pp.89)

One of the most important issue is also that if the process of integrating China into the
global innovation system does not take place well then there could be tensions as well as
risks for the entire world. There is the risk that discontent arising in both China and OECD
member countries may complicate this integration process. In China there is some
dissatisfaction owing to China being a low cost manufacturing platform for the world. The
OECD countries are also raising voice against negative impact of off shoring, excessive
pressure from cheap Chinese exports, infrigment of intellectual property rights and forced
technology transfer. Such issues and negative perception son both the sides could be
problematic in terms of maximizing long term mutual benefits. Therefore both China as well
as the OECD nations should maintain a dialogue of mutual co operation and an open
dialogue for solving global problems and issues. (OECD Report China, pp.89)

2.1 Potential global implications of China’s transformation in the

tertiary education sector

Rapid changes in China education polices since 1999 also have had important global
implications. The number of science and technology graduates is increasing rapidly in China.
The number of science and technology graduates is rapidly increasing than in most OECD
countries. China is also one of the emerging nations in terms of number of scientific
publications. In 2004 China ranked fourth and represented 6.4% of the world’s scientific
output. The Chinese annual scientific output also almost doubled between 1997 and 2004
which shows the rapid expansion of the Chinese science and technology system due to the
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educational transformation in China. The rapid increase in patent related activities and
increasing number of educational attainees are also attracting lot of foreign direct
investment which is also responsible for rapid growth of China. There is an increasing trend
in Chinese patenting activity in different data bases namely USPTO, EPO, WIPO and Chinese
own data base. (Li et al, 2009)

3. Conceptual framework

3.1 Innovation Policy and National systems of innovation

Innovation policy is defined as a set of policy actions which are used for improving the
efficiency of innovative activities like creation, adoption of new and improved products and
services. Innovation policy can be developed and implemented at the local, regional as well
as national level. The Organization for Economic Co-operation and Development (OECD)
(1996) indicated that an efficient innovation policy strategy must combine a number of
macroeconomic and structural policy actions and its success depends on the validity of the
policy framework and the complementarities and mutual support among the different policy
actions. (Huang et al, 2003)

The concept of national innovation systems is used by policy-makers and political

economists to compare and analyze the state of technological development and innovation
within a country. It is useful in studying the entire knowledge/innovation value chain from
knowledge generation to commercialization of knowledge into product and process
generations. The basic assumption behind the concept is that a interactive learning and co
ordination takes place between various sub systems of research, education and training at
the national level. (Hulsink et al,2008)

The national innovation systems approach also lays down emphasis on the importance of
knowledge flows. These knowledge flows are: 1) interactions among enterprises 2)
interactions among enterprises, universities and public research laboratories 3) diffusion of
knowledge and technology to firms and 4) movement of personnel. The objective also
should be to identify the important bottlenecks in the knowledge flows. It also involves
tracing the links between the academia, industry and government which is also useful to
measure the ‘knowledge distribution power’ of a national innovation system which is an
indicator of growth as well as competitiveness. It is the capacity to stimulate and optimize
the diffusion, sharing of knowledge whether in form of scientific publication, conferences,
embodied in equipment, software etc.For policy makers understanding of the national
innovation system can help identify leverage points for enhancing innovative performance
and overall competitiveness. It can assist in pinpointing mismatches within the system both
among institutions and in relation to government policies, which are slowing down
technology development and innovation. (OECD, 1997)

3.2 Triple Helix model (University-Industry-Government)

The triple helix model which was developed from the concepts of evolutionary economics
can be used to characterize the relationships between university, industry and government.
In this model the university is considered as the key element of the innovation system as it
is the human capital provider and also as incubation for the new firms in emerging
knowledge economy.(Xue Lan, 2006). Knowledge based system can itself be considered as
an outcome of interaction among different social coordination mechanisms namely markets,
knowledge production and (public or private) governance at interfaces. The Triple Helix

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model of University–industry–government relations provides us with a heuristic for studying
these complex dynamics in relation to developments in the institutional networks.
(Leydesdorff et al, 2007)

Some famous examples of Triple Helices include Stanford University/Silicon Valley,

Cambridge University/ Cambridge, Lund University/Ideon Science Park/Lund, Chalmers/SAAB
& Volvo/Gothenburg and Linkoping University/SMIL/Vinnova.The triple helix model also lays
emphasis on the academia moving in the direction of academic capitalism. The triple helix
concept also implies that academia is moving in the general direction of academic
capitalism. The focus is also on the political economy of the relationship between
universities and external business firms. This has also resulted in changing academic culture
in which the focus has shifted from pure academic research to university industry
partnerships in which research is more commercial. Universities are also increasingly
collaborating with the industry and even trying to become more international. Universities
are pursuing both collaboration and competition by setting up international linkages and
local branches in different countries in order to strengthen their competitiveness in a global
market place. (Delman et al, 2007)

3.3 Role of Universities in National systems of innovation

Universities play an important role as source of fundamental knowledge as well as industry

relevant knowledge and technology. Governments in the past have tried to link up the
activities of the Universities with the local industry in the form of creation of science parks,
support system for business incubators, bridging institutions as well as arranging seed fund
for new firms. Universities often have faced slower growth due to lack of good public funding
for research activities. Some Universities also have done well in seeking new sources of
funding in form of funds from the industry. Universities have also tried to establish links with
the industry as a means of strengthening their contribution to economic growth. Universities
therefore can be considered as critical instruments in the national systems of innovation in
terms of their scientific and technological output, increasing efficiency of the R&D in the
industry, design of new equipment and instrumentation for the industry, important product
and process innovation and also for supply of human capital for the industry. However the
concepts like triple helix model might not be always able to explain some important issues
like tensions among the various roles of research universities within knowledge based
economies. Pressure from policy makers can also force universities to accelerate their
research process to more commercial based research where they can get more measurable
research outputs. There is still a lack of broad indicators where the industry-university
linkages and the performance of the universities and their role within the innovation system
can be better assessed. Therefore there is a strong need for analytic framework for
understanding role of universities within the national innovation system. (Mowery et al)

4. Tertiary education system in the Netherlands

The tertiary education system of Netherlands is presented in detail in Annexure A.

5. Tertiary education system in China

The tertiary education system of China is presented in detail in Annexure B.

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6. Key challenges for the Dutch innovation system for tertiary
education
According to Chapter four the Dutch tertiary education system has a high quality on almost
all aspects. The system performs excellent on education and research productivity. This high
quality cannot be taken for granted as there are some aspects of the system which will need
some policy for the near future.

First of all, the Netherlands will have to deal with the greatest challenge of all, which is
dealing with the lack of human capital in the future. Due to the “vergrijzing” (retirement of a
substantial part of the labour force) the Netherlands will have a higher demand than supply
for human capital. This is a problem for almost all sectors, but in the Netherlands it is
especially severe in the sectors of science and technology. According to the OECD report
(2006) the downward tendency of science and technology graduates contrasts sharp with
most of the other OECD countries where there is an upward tendency in these sectors.

According to the OECD Thematic Review of Tertiary Education (2006) the Netherlands are
highly productive in scientific research and reach a high quality. The total number of
publications is high compared to the number of researchers and the citation impact if above
average. It is a great challenge for the tertiary educational system to increase the number of
researchers in the upcoming years, without loosing the high quality and productivity.

Next to this future problem, the Netherlands also have to deal with the so called Dutch (or
European) Paradox. Although the Netherlands perform well on productivity and on quality,
they are below average regarding innovation.According to the European Innovation
Scoreboard, the Netherlands rank 12th out of the 20 high income countries.(OECD,2006) This
low ranking on an innovation scoreboard gives the government a strong incentive to tackle
this Dutch Paradox. As already stated in Chapter four, an example of policy to deal with this
paradox are the innovation vouchers.

To summarize, the key challenges for the Dutch innovation system comprise of human
capital challenges. These challenges will need focused policy measures from the Dutch
government (e.g. like the innovation vouchers) in order to deal with this problem.

7.Key challenges for the Chinese innovation system for

tertiary education
Though China has made significant progress in developing human resources for science and
technology with number of R&D personnel and science and technology personnel increasing
rapidly the output of China is still low when compared to other OECD nations in terms of
ratio of patent applications to researchers and the ratio of S&T journal articles to
researchers. (OECD China, 2008, pp. 342)

China also faces problems related to weak vocational educational structure in spite of the
rapid increase in science and technology personnel. Although the number of HRST has
increased rapidly over the past ten years, the vocational education structure is weak and the
quality of training needs improvement. Numbers of undergraduates and postgraduates are
rising strongly, but the vocational training system is lagging and remains largely dependent
on the initiative and priority of local authorities. The number of R&D personnel is also
becoming more and skewed towards researchers rather than other important R&D personnel
like technicians which can lead to problems of under utilization of researcher’s skills.

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Although China has been successful to some extent in building up a stock of R&D personnel
there are questions still about effectiveness of the workforce as well as quality of the work
force. China is still behind many OECD nations in terms of number of science and
engineering articles published per 1000 researchers and number of patent applications per
1000 researchers. China is also facing problems related to higher levels of out migration of
students and less return migration and possible implications for bran drain from it. (OECD
China, 2008)

Some other important issues are related to international students coming to study in China
and the nature of study programmes they are participating in. There are quite less
possibilities of foreign students coming and studying in China as in 2005 according to the
China statistical yearbook only 78323 students were studying in China. The other issue is
that most of the joint degree programmes between Chinese universities and universities
from U.S., U.K and Australia in which only 150 programmes were allowed to confer non
Chinese degrees as the Chinese government is very strict regarding these regulations. It is
also difficult to run a programme for a foreign university in China without the support of
Chinese universities or institutions due to the difficult regulations of the Chinese
government.

The increasing rate of unemployment among the university graduates also seems to be an
important problem for China. The university education system in China is producing high
number of engineers, technicians, business managers etc but the Chinese labor market
seems not to be prepared to absorb the vast pool of human resources. China is also facing
problems with respect to the quality of university graduates. (Brandenburg et al, 2007)

China also has a weak industrial R&D capability which means that the business enterprises
which translate R&D results into profitable products and processes are weak and due to this
the efforts by universities in terms of research work, publications and patents are of no use
as they are not commercialized properly. The Chinese university system still lacks autonomy
and many institutions still have centralized system which also hinders the universities in
adapting to the dynamic changes in the economy. (Xue Lan, 2006)

The internationalization process of tertiary education in China is also resulting in fierce

competition between China and other nations for educational resources and high level of
talented people.Investors and businessman globally are also attracting Chinese talent by
offering good compensation. China also needs to resolve and find solutions to its
dependency on western education model and develop it own innovative models. The
Chinese government also has to look into matters related to funding for internatiolization of
tertiary education as if neglected can result in loss of co operation with other nations and
cause a negative impact on Chinese education system.(OECD thematic review,2007)

8. Opportunities for Dutch innovation system arising from

Chinese innovation system
China needs expertise in socio economic development, sustainability, scientific research
which EU and countries like Netherlands can fulfill with collaboration. China has a huge
consumer market in the education sector and this should be quite interesting for countries
like Netherlands. Chinese students and academic professionals will also add and contribute
to the knowledge society in Netherlands. China having a huge population might not have the
resources and capacity in the long run to educate its entire population due to the fierce
entrance examination for universities, family pressure and other reasons and this has also
forced Chinese students to seek alternative sources of education outside China. In the EU,
700,000 additional researchers will be required merely to reach the Lisbon research goals in
9
2010 and this needs immigration of global talent on a massive scale. Chinese and Indian
students are in great demand as both the countries can provide high quality talent.
(Tremblay et al,2006)

Netherlands could capitalize on this opportunity by developing bilateral co operation with

China in the educational sector, make off shore educational investments, and strengthen its
educational sector and also gain resources for funding through tuition fees from students.
Student migration will also benefit China as the Chinese students could transfer the
accumulated skills, knowledge gained in Netherlands in China when they return back.
Netherlands could also be useful to China in solving some of the problems associated with
quality and rote based learning problems in the Chinese tertiary education system. Co
operation with the Dutch tertiary education sector could solve one of the major barriers of
Chinese tertiary education system which is quality assurance. This could be a win-win
situation for both the nations.(Shen Wei).Netherlands can be a useful partner for China in
helping it solve some of its socio economic problems like demand for national infrastructure,
clean energy, clean transportation, water security, food production, agriculture, climate
change and sustainable development.

The Dutch government already has thematic(attached to execution of a programme) and

horizontal priorities(part of overall strategy and priorities of organizations) with the Chinese
government. The thematic priorities have been in areas like biotechnology/drug research,
environmental research, material science, systems medicine, ICT, biosciences,
nanotechnology, and production technology with focus on basic research.(Netherlands Quick
Scan, CO REACH).China is also more and more innovation driven by focusing on some
priority areas like energy, water, mine resources, environment, agriculture, information
technology, manufacturing, traffic and transport, population and health, urbanization and
rural development, public security and defence.The frontier areas are biotechnology,
information technology, new materials technology, advanced manufacturing technology,
advanced energy technology, ocean technology, laser technology and space technology.
(OECD China,2008,pp.184)

With respect to the programme priorities the priorities have been software development,
glass industry, systems biology (with a view to modernization of Traditional Chinese
Medicine).The Dutch and Chinese government have some kind of co operation for
intensifying technical and scientific cooperation bilaterally as well as multilaterally as well as
exchanging knowledge as well as co operation for creating knowledge clusters and
technology based start ups.The Dutch government also has priorities in promoting scientific
excellence, internationalization of Dutch higher education,strenghtening and expanding
knowledge capacity, increasing competitive position of universities and stimulating mobility
of researchers. The PSA(Programme strategic alliance) managed by KNAW and MOST
between Netherlands and China has established alliances for conducting large scale
strategic research in limited areas like sustainable energy,food,water,life sciences and
health.(Netherlands Quick Scan, CO REACH).Therefore there are tremendous opportunities
for future co operation between Netherlands and China as there are number of social
problems which still remain unsolved in both the countries as discussed in the report and
cooperation will be beneficial for both the nations as none of them might be able to compete
individually with each other or with other nations.

9. Conclusion
9.1 Answer to research question

In this section we come back to the research question and sub questions formulated.

10
How can the Netherlands become one of the top knowledge economies of the
world and how does China play an important role in it?

Sub Questions

1.What opportunities can Dutch universities encounter when Chinese universities are
increasing their level of knowledge and research?

2.How interesting is research co operation and international mobility of students and

researchers among Dutch and Chinese universities?

Prime Minister Balkenende in the Dutch innovation platform also laid stress on strengthening
the competitive strength of the Dutch economy and improving the entrepreneurial spirit and
climate in Netherlands.Wiebe Draijer, member of the innovation platform and one of the
initiators of Nederland in de Wereld (the Netherlands in the World) also laid stress on
international co operation through the remark

“The Netherlands is capable of rapid change. For centuries, we have

demonstrated that, through cooperation and an international orientation, our
economy has revived itself time and again. We must strengthen that now more
than ever.”1

Besides a shift in the government, universities in the Netherlands have also changed but still
a lot needs to be done. Although the quality of scientific research and education over the
last decades has invariably been high but Netherlands has always lacked in linkages with
the private sector and application of knowledge generated by universities to businesses.
One of the important conditions necessary for Netherlands to become one of the top
knowledge economies will be knowledge commercialization and formation of new firms with
strategic partnerships between universities and investors, big companies, business service
firms and local governments. Co operation with countries like China on thematic areas and
programmes and opening doors for internationalization of higher education will also lead to
Netherlands becoming one of the top knowledge economies in the world.(Hulsink et
al,2008).Dutch universities have a number of opportunities in terms of starting joint
research, degree and exchange programmes for students as well as faculty members in
areas of priorities mentioned above. The Dutch universities could also allocate special
budgets for attracting Chinese students as well as for developing faculty programmes.Such
strategies could give the Dutch universities access to vast pool of human resources and
global talent in China as well as expertise in common areas of priorities. The Dutch
universities could also overcome the knowledge paradox problem by commercializing the
knowledge generated in universities by developing special linkages and collaborations
between Chinese universities as well as Chinese firms.

9.2 Policy recommendations for the Dutch government

There are several policy recommendations for the Dutch government which follow from the
analysis in the report.

1.The Dutch government needs more direct investment in knowledge and innovation,
training and education as well as research and development. The research expenditure as a

1
http://www.cosmoworlds.com/features/innovatieplatform-10012008.htm,

11
percentage of GDP decreased from 1990 onwards(See page for more details).The
government must develop specific policy measures for increasing the percentage in the
future.

2.The three technical universities in Netherlands(TU Delft, TU Eindhoven,University of

Twente) must try to find measures along with the Dutch government to increase the number
of students(Bachelor and Masters) in the universities and also a increase in the number of
PHD students which is quite low. (See page for more details).This could be done either
through encouraging students inside the Netherlands by starting special
programmes,encouraging master students to take up PHD positions or either through
increasing collaboration with universities aboard and allocating special budgets and
scholarship programmes for international students. Specific measures are also needed for
encouraging more and more women candidates into technical universities.

3.The government must also try to remove organizational and institutional barriers for
innovation to happen and entrepreneurial firms to capitalize on them by providing
appropriate financial incentives and support of a coherent government policy. Institutional
barriers which hinder exchange of knowledge through patents,IPR’s etc should be reduced
to a large extent.

4.Links must be strengthened between universities and firms so that the role of universities
is not restricted to teaching alone and it also leads to commercialization of knowledge
generated in universities. The collaborative linkages between different universities must also
be strengthened.

5.There must be co ordination as well as clustering of research co operation between

universities in China and Netherlands for multilateral research
activities.Universities,research institutions,companies should be linked together in clusters
for creating value. Multilateral as well as bilateral co operation should be increased.

6.The government must support selective marketing strategies and promotion campaigns by
universities for attracting more and more international students and researchers.
Netherlands education support offices should play a major role in promoting Dutch higher
education, Dutch economy as well as society to make Netherlands attractive for the global
talent.

10. Scope for future work and limitations

The report focused on the key challenges as well as opportunities for the Dutch innovation
system for knowledge and innovation from the Chinese system for knowledge and
innovation using the triple helix framework and other related concepts and presented some
policy advice. However the report did not suggest policy advice based on actual
measurement of the knowledge infrastructure of Netherlands as well as China by using
webometric, scientometric and technometric indicators using patent data, citation indexes,
number of publications and citations, co citations and co publications, and see if there is a
significant relationship between the patent portfolio and publication portfolio.(Park et
al,2005). There is a lot of scope for further research and investigation in these aspects. A
comparison across different sectors of both the national economies would result in results
which could actually tell undeveloped sectors in terms of triple helix indicators and which
might need further policy intervention. No network data for relationships between
universities, industry and government was also collected. The results of such an analysis will
be particularly useful for solving challenges related to institutional barriers in collaboration
between universities, industry and government and policy makers can use specific
instruments to trigger the linkages and relationships for co operation between them.
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11. References
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2.Bradenburg et al, 2007, Higher Education in China in the light of massification and
demographic change: Lessons to be learned for Germany, CHE Centrum für
Hochschulentwicklung gGmbH

3.Dutch Academic China meeting (ACO), 2008, Paradoxal China: Western perceptions,
Eastern Realities?

4.Education’s contribution to Dutch innovation system, 2005

5.Delman et al, 2007, Nordic triple helix Collaboration in Knowledge, Innovation,and

Business in China and India :A preliminary study, NIAS-Nordic Institute of Asian Studies

6.Huang et al, 2003, Organization, Program, and Structure: An Analysis of the Chinese
Innovation Policy Framework, Conference on The Emergence of New Knowledge Systems in
China and Their Global Interaction, September 29th and 30th, 2003 in Lund, Sweden and
Conference on Innovation and Learning in a Globalised world, Experiences of Developing
Countries, October 10th, 2003 at Eindhoven Centre for Innovation Studies, Eindhoven, the
Netherlands
7.HOOP 2004, Hoger Onderwijs en Onderzoek Plan 2004, OC&W.

8.Hulsink et al, 2008, Science and Technology-based Regional Entrepreneurship in the

Netherlands: Building Support Structures for Business Creation and Growth
Entrepreneurship, ERIM Report series research management

9.Jonge et al, 2006, OECD Thematic review of tertiary education: The Netherlands

10.Leydesdorff Loet, 2006, Triple Helix indicators of knowledge-based innovation systems:

Introduction to the special issue, Research Policy 35, 1441–1449

11.Li et al, 2009, The transformation of China’s higher education system and its global
implications,China Policy Institute,The University of Nottingham

12.Lundvall Ake Bengt, 2007, National Innovation System: Analytical Focusing Device and
Policy Learning Tool, ITPS, Swedish Institute for Growth Policy Studies

13.Mowery et al, Universities in National innovation systems

14.National Quick Scan: The Netherlands, CO-REACH (Co ordination of research between
Europe and China)

15.Nuffic, Linking knowledge worldwide, Renewed urgency for internationalization in higher

education

16.NESO, CSCSE–Netherlands Education support office Beijing, 2005, Perceptions of

European higher education in third countries, A study carried out by the Academic
Cooperation Association, China country Report

17.OECD Reviews of Innovation Policy China, 2008

18.OECD, 1997, National Innovation systems

13
19.OECD Thematic review of Tertiary education: Background report for the P.R of China,
2007, National Center for Education Development Research of the Ministry of Education of
the P.R. of China

20.OECD, 2006, Thematic review of Tertiary education, The Netherlands.

21.Park et al, 2005, A comparison of the knowledge-based innovation systems in the

economies of South Korea and the Netherlands using Triple Helix indicators, Scientometrics,
Vol. 65, No. 1 (2005) 3.27

22.Science, Technology and Innovation in the Netherlands Policies, facts and figures, 2006,
Ministry of Economic affairs

23.Shen Wei, Student Migration Between China and Europe Politics, Policy and Prospects,
Loughborough University & Sciences Po Paris

24.Strategic agenda for higher education, research and science policy, 2007

25.Steen Van Jan, 2009, Facts and Figures: Universities in the Netherlands, Science System
Assessment, Rathenau Instituut

26.Su Bob Z, 2008, S&T developments in China: Prospects for bilateral cooperation in
research, ACO China Conference Panel: China's Science and Education: Collaborator or
Competitor?

27.Teixeria et al, 2005, Universities as sources of knowledge for innovation.The case of

Technology Intensive Firms in Portugal, FEP working paper series, CEMPRE-Centro de
Estudos Macroeconomicos e Previsao

28.Tijssen et al, 2008, Science and Technology Indicators 2008 Summary, Netherlands
Observatory of Science and Technology (NOWT)

29.Tremblay et al, 2006, Education and the knowledge economy in Europe and Asia,
European policy center

30.Xue Lan,2006,Universities in China’s National Innovation System,Paper prepared for the

UNESCO Forum on Higher Education, Research and Knowledge, November 27-30, 2006

31.Web Link: URL: http://www.cosmoworlds.com/features/innovatieplatform-

10012008.htm,

12. Appendix
Annexure A
4. Tertiary education system in the Netherlands
According to the OECD thematic review of tertiary education system in the Netherlands
(2006) the Dutch government recognizes the importance of the tertiary education system in
making the Netherlands one of the top knowledge economies of the world. The Dutch
government policy is also focused on increasing the number of knowledge workers by
increasing the number of bachelor, master as well as PHD students. Both national
14
government and individual institutes are engaged in the process of establishing centers of
excellence for education and research. The central document for governmental science
policy “wetenschapsbudget 2004” (Science budget 2004) is focused on excellence and value
in terms of concentration of finance and human resources, high quality of research as well
as generating more use out of science.

Through promoting a network of universities, research institutes and private firms the
central government wants to stimulate quality in the innovation system. The Dutch
innovation platform launched by the prime minister advocated additional funding for bigger
facilities and higher investments in higher education under the programme “Knowledge
ambition and research infrastructure”. There is also a growing importance of innovation in
the Netherlands in terms of transfer of knowledge from the universities and research
institutes to the private firms and a number of initiatives have also been taken in this regard
at the government level. The Netherlands are also investing modestly in education in
general and in higher education and research in particular.

Both the socio economic council as well as the education council feel that in order to achieve
the Lisbon objectives the investments in higher education have to be increased. The second
issue is related to the R&D investments by private firms and also investments related to
internationalization of tertiary education with additional funding for improving the quality of
education. There are also issues related to more investment in non R&D related areas and
social sciences, humanities, languages and culture.

The Dutch innovation system has a number of strengths but there is also a need to focus on
improving on the weaknesses. The major strengths include quality of scientific research, the
exploitation of this research in patents, ICT infrastructure and the contribution by private
companies to public institutes. On the other hand the major weaknesses are in terms of
considerable in R&D investments from private firms, growing deficit of knowledge workers in
areas of technology and science and lack of co operation between private firms and public
institutions.

The Netherlands have a well balanced system of institutes which are performing well. Dutch
universities perform quite well in many aspects in terms of international benchmarks but
never reach the top bracket of universities and institutions. The research output in terms of
citations and patents in the Netherlands is among the top on a global scale. There are
however some great concerns about the supply of graduates in certain disciplines. The
supply of graduates from science and technology is far below the OECD average indicators
and a growing number of employees in these fields are from foreign firms. Universities,
research institutes and private firms have to recruit workforce on a global scale due to
insufficient supply of graduates within the Netherlands. The government is also trying to
direct policies in terms of stimulating more interest in science and technology. The
Netherlands have the ambition of becoming one of the top knowledge economies in the
world and Dutch higher education system will play an important role in the long term
economic development of the Netherlands. (OECD, 2006)

4.1 Human resources in the tertiary education system

As a trend it seems that participation in the tertiary education system in the Netherlands
increased slightly in the past years to 530.000 students in 2004. This group of students
consists of university students (about 190.000, including Ph.D. students) and HBO students
(e.g. students from the “Hoger Beroeps Onderwijs”; nearly 340.000). It can be seen that the
inflow in both universities as HBO’s are increasing. In both educational systems, science and
technology represent about 20% of the total number of students. On the level of Ph.D., more
than 50% of the students are in the field of science and technology.

15
Figure 1: First year students in HBO (OECD Thematic Review of Tertiary Education, the
Netherlands, 2006, pp.15)

Figure 2: First year students in Universities (OECD Thematic Review of Tertiary Education,
the Netherlands, 2006, pp.16)

Figure 3: Ph.D. students per discipline (OECD Thematic Review of Tertiary Education, the
Netherlands, 2006, pp.17)

4.2 R&D activities, output and spending of Dutch universities

16
If you compare the Netherlands with the rest of the world regarding R&D competitiveness,
the productivity of scientific research is world class as is the percentage of R&D expenditure
on higher education (Figure 4). This makes the Netherlands, according to the “Netherlands
Observatory of Science and Technology”, the number 10 competitive country, which is still
indicated to be a mediocre country on R&D competitiveness. A relatively large part on R&D
goes directly to universities. 28% of total R&D expenditures in the Netherlands are spent by
universities (Figure 5). (Science and Technology Indicators Summary, Tijsen, 2008)

Figure 4: Performance indicators for the Netherlands and benchmark countries (Science
and Technology Indicators Summary, Tijsen, 2008, pp. 8)

Figure 5: Total R&D expenditure according to source (Science and Technology Indicators
Summary, Tijsen, 2008, pp. 14)

Regarding Human Resources in R&D, the Netherlands are lagging behind the rest of the
benchmarking countries of the NOWT study. Researchers only account for 4.8‰ of the total
workforce, compared to 9.3‰, 10.6‰ 11.0‰ and 15.0‰ of United States, Japan, Sweden
and Finland (Figure 6). The Netherlands also have a low number of Ph.D. students: 0.34‰
compared to the United States (0.41‰), EU (0.56‰), the United Kingdom (0.68‰),
Germany (0.81‰) and Sweden (1.24‰) (OECD, 2006).

17
Figure 6: Share of researchers within the total labour force (‰) (Science and Technology
Indicators Summary, Tijsen, 2008, pp. 16)

As already mentioned, the R&D productivity of scientific research is very good. The
Netherlands produce about 25.000 publications annually which is 2% of all publications in
international research journals. These publications receive about 3% of all citations
worldwide. Because the Netherlands have this high publication rate and only few
researchers, the research productivity is relatively high. (Tijsen, 2008, pp. 20)

Figure 7: Key figures for Dutch Universities (Steen, 2009, pp.3)

Though the universities have excelled in all the indicators and public and research
expenditure have increased through the years the most alarming point is the decrease in
research expenditure as percentage of GDP which had decreased from 0.58 to 0.47 from
1990 to 2006.The Dutch government seems to have not concentrated on increasing
research expenditure as a percentage of GDP and should try to increase it.

18
Figure 8: Data for individual universities (Steen, 2009, pp.4)

There are some interesting insights from the figure above. The three technical universities
(TU Delft, TU Eindhoven and University Twente) received 19.2% of the total revenues out of
5306.2 million Euros and produced 21.1% of the total scientific publications which is quite
good but the problem is with the less number of students pursuing technical courses which
seems to be quite low 13.9%(Total of all the three technical universities) and number of
dissertations is only 16.9% of the total number of dissertations which is slightly more than
University of Utrecht alone.There seems to be a big problem with lack of interest of students
in scientific and technical areas. The Dutch government must focus on starting measures
for increasing the number of students in scientific and technical areas specially in the three
technical universities and if possible try to increase collaboration with universities abroad for
intake of talented students in other countries. Students from emerging economies like India
and China where a number of science and engineering graduates come out every year can
be interesting possibility for research as well as educational co operation.

4.3 Linkages between universities, government and Industries (Triple

Helix)

According to the Netherlands Observatory of Science and Technology, the Netherlands have
a mediocre link with the industry. On the one hand they have a relatively high output of
public-private co-publications. On the other hand the percentage of innovative enterprises
cooperating with universities is below the average. (Tijsen, 2008) This indicates that there
definitely is some cooperation between universities and industry, but that the knowledge
transition to practical use is not optimal. This is called the Dutch (or European) Paradox. This
paradox means that although the research done by universities is of world class, it does not
address the problems which are occurring most in the industry. The Dutch government tries
to develop policies for this paradox. An example of policy is the innovation voucher with
19
which SME’s can stimulate knowledge transfers and enhance innovation. (The Dutch Ministry
of Economic Affairs, 2006)

To get another insight in the relationship between universities and government and between
universities and industry, we can look at the sources of investment on R&D. Of all university
R&D expenditure, 7% comes from the private sector. This is around average. But only 12%
of all R&D expenditure comes from government, which is fairly low.

4.4 Internationalization of the tertiary education system in the

Netherlands and its implications
The Netherlands as a country has always been oriented internationally. In the tertiary
education system this also plays a prominent role. 25.9% of all HBO students and 39.2
of all university students have had some sort of foreign experience before graduation.
The other aspect of internationalization comprise of statistics of foreign students
studying in the Netherlands. According to the HOOP report (2006), the Netherlands is
host to relatively few students (just over 3%), compared to the United Kingdom,
Belgium and Germany (between 9 and 11%) (Figure 9).The relatively low percentage
of foreign students shows that the Netherlands at the moment is not an attractive
country to study. Therefore facilities should be created to attract foreign human
capital. This can be done by government policy.

Figure 9: Share of foreign students in higher education in 2001 (Hoop, 2004, pp. 77)

Annexure B
20
5. Tertiary education system in China
China is making tremendous progress in terms of progress in tertiary education system. The
number of undergraduate and graduate students in China has been growing at
approximately 30% per year since 1999, and the number of graduates at all levels of higher
education in China has approximately quadrupled in the last 6 years. There has been given
tremendous priority to higher education in the 10 th and 11 th five year plans. It is widely
recognized that there will be substantially more Ph.D. engineers and scientists in China in
2010 than in the US, since on a flow basis China produces three times the number of
engineers compared to the US. Skilled labor supply in China now equals around 40% of that
in all OECD countries, and the growth rate of student numbers is much higher than in the
OECD.This rapid transformation also has a lot of implications for the global scenario in terms
of relative supplies of skilled labour, academic publications as well as trade. China’s efforts
are motivated by a desire to maintain high growth by using educational transformation as
the primary mechanism for skill upgrading and raising total factor productivity. (Li et al,
2009)

Higher education has also become a top priority in the China. The role of universities has
gradually shifted from a teaching centre to a place for scientific research, training and
meeting key societal needs. The focus also has gone to the implementation of quality-
oriented education, strengthening of institutional innovations, implementation of legal
governance of education and the opening of education to the world by means of
internationalization. (Brandenburg et al, 2007)

Chinese higher education policy also focuses on reforms for the elite universities which
receive the highest funds from central and local governments and also to consolidate other
universities and reduce their numbers. The idea is to bring a few Chinese universities to the
world class level as well as strengthen them and make them bigger. The priority also has
shifted from quantity to quality where Chinese universities are expected to perform well in
terms of international rankings. The faculty members are also expected to perform well in
terms of scientific publications in internationally reputed journals. However the Chinese
higher education system has given more focus on sciences and engineering and less
attention to social sciences as well as business. The projects 211 and 985 with a focus on
technological innovation, creativity and improving capacity for innovation are also one of the
top agendas of the Chinese government for advancement in tertiary education. The Chinese
government also wants to generate an educational system which integrates learning,
research and production of knowledge together. (Li et al, 2009)

According to the OECD report on China (2008) even though there is rapid growth of
researchers and the tertiary education system in China the future is still uncertain.
According to the report China, in order to maintain its current economic growth, will need
3.7 million researchers by 2020. Even though the current rate in the growth of researchers is
maintained, there will still be a need for more researchers and there will always be big
shortages in areas of higher education. (OECD Report on China, 2008)

Economic development relies heavily upon the development of tertiary education and the
aim should be for scaling it up and accumulating human capital. The quality of higher
education in China needs to be improved by increasing the scientific and technological
output of universities as well as development of vocational training for building a strong
economy. In order to achieve these goals the central government has also started
programmes like project 985 and project 211(Names of the project) which are focused on
fostering high quality skilled talents. In the recent year the focus of tertiary education has
also focused on new models for governance from the conventional singular government
mechanism, new funding mechanisms, reforms in the entrance examination for entry into
21
tertiary education and reforms in the internal management of universities. Chinese tertiary
education system not only needs to increase the total amount of funding but also needs to
ensure the effectiveness of funds at the institutional level. Tertiary education also needs to
be prioritized in terms of public funding which also includes establishing a public financial
system which ensures stable growth of educational expenditures and creating suitable
incentive mechanisms for organizations and private firms to invest in tertiary education.
(OECD thematic review of tertiary education in China, 2007)

5.1 Human resources in the tertiary education system

The tertiary education system is extremely important due to its effects of the development
of human resources and R&D capabilities on innovation and large scale knowledge diffusion.
Economies need a sufficient number of human resources with appropriate education, skills
and training to support as well as increase its knowledge base. Development of higher
education in terms of more enrolment in undergraduate and postgraduate programmes
contributes to a nations increasing need for human resources for science and technology.
China is also engaged in increasing its capacity to educate people for its long term needs for
human resources for science and technology. China also has one of the world’s highest
enrollments in higher education.

In 2005, 5 million began undergraduate education in China’s regular higher education

institutions, there were 15 million undergraduates enrolled and 3.1 million graduated. The
average annual growth between 2000 and 2005 was 18% (entrants), 23% (enrolments) and
26% (graduates).

The number of postgraduates has also increased rapidly since 2000 (Figure 6.3). In 2005,
entrants to master’s degrees programmes and above in China numbered 364 831 in 2005,
about 2.8 times the number in 2000. The number of master’s degrees and above increased
from 65 831 in 2000 to 189 728 in 2005, for average annual growth of 24%.This is also
represented in the figures below.

Figure 10: Undergraduates in higher education institutions (OECD China, 2008, pp.309)

22
Figure 11: Post graduates in higher education institutions (OECD China, 2008, pp.309)

There is sharp growth in engineering fields with number of engineering graduates increasing
dramatically from 1998 to 2005 as China has laid more emphasis on engineering. This was
also beneficial for China as it became in a better position to absorb technology from
advanced nations and use it for indigenous use. Between 2004 and 2005 the number of
undergraduate entrants and enrolments in science fell by 86923 and 188205 respectively.

Figure 12: Total number of post graduate entrants by fields (OECD China, 2008, pp.313)

Graduates from Chinese higher education institutions in the natural sciences and
engineering increased from 0.5 million in 1995 to 1.5 million in 2005.The average annual
growth rate was 2% from 1995 to 2001 and 29% from 2001 to 2005. Between 2001 and
2005, graduates in engineering and in medicine increased by 33% and 34%, respectively.
However between 2004 and 2005, science graduates fell by 21%.
23
Figure 13: Science and engineering graduates and post graduates in Chinese higher
education institutes (OECD China, 2008, pp.315)

At the doctoral level, however China lags behind most nations. In 2004 only 0.1% of persons
at the typical age of graduation received a doctoral degree in China compared to 1.5% in
Russia, 1.4% in the EU19 and 1.3% in the United States and the OECD as a whole. This is
shown in the figure below.

Figure 14: Science and engineering degrees and doctoral graduation rates (OECD China,
2008, pp.316)

5.2 R&D activities, output and spending of Chinese universities

The research in Chinese higher education research institutions have paid equal attention to
scientific research and technical development, basic research and applied research,
theoretical research and technology transfer as well as natural science research,
philosophical and social science research. R&D investment in China is around 2% of GDP. In
recent years the Ministry of Education has set up policies and strategies in favour of basic
research so as to carry out basic research closely connected with China’s needs with basic
24
disciplinary build-up, talent training, and platform support. (OECD Thematic review of
tertiary education, 2007)

R&D activities in China have been mainly carried out in three sectors namely the public
research institutes, higher education institutes and the business sector. The rapid growth in
China’s economy has not only been due to increase in R&D expenditure but also due to
structural changes in the distribution of R&D personnel and transformation of various
institutions. The number of R&D workers in enterprises or business firms is rising but we can
see a decrease in the number of researchers in the higher education sector in terms of
shares. This can also been seen in the figure below.

Figure 15: R&D personnel by sector of performance (OECD China, 2008, pp.321)

Though the number of researchers in the higher education and government sectors has
increased modestly since 1998 but the share of researchers in these sectors fell below 20%
in 2005.

Figure 16: Number of researchers by sector performance (OECD China, 2008, pp.324)

Universities in China have also shown their great potential in knowledge innovation and
industrialization of high-techs. Chinese universities are also instrumental in Chinese
knowledge production activities. In 2004 over 437000 full-time equivalent research people
25
were involved in Science and technology research work in universities spending 12.55% of
the national R&D expenditure and publishing 64.4% of the papers being published
domestically. These facts also show that the universities in China hold a very important
position in the Chinese national innovation systems. (Xue Lan, 2006)

Chinese universities have also concentrated more on applied research where the percentage
of total R&D funds for applied research have stayed above 55% from 1991 onwards till 2000
where the percentage began to drop but it is still around 50%.However the expenditure on
basic research has decreased from 34% in 1978 to 11.8% in 1992 and became stable with
around 20% in 2000. With regard to research output Chinese universities have also played
an important role in the national innovation systems. In 1997 among the articles of China
that have been catalogued by SCI, ISTP and EI as a whole universities produced 70.8%; and
in 2004, among the articles being published domestically, universities accounted for 64.37%
of the total number of publications. Chinese universities have also played an important role
in patenting rates. In 1997 15% of invention patents were granted to universities as
compared with 23.7% to government research institutes and 52.7% to enterprises. The table
below shows the details for the scientific publications. (Xue Lan, 2006)

Figure 17: Number of periodicals being published by university sector in domestic

periodicals (Xue Lan, 2006, pp.10)

The number of China’s international Science and engineering journal articles per 1000
researchers only amounted to 34 in 2003. With an increasing share of R&D personnel
shifting to the business sector where publishing research results in journals may not be the
first objective it should also explain to a certain extent the low publication output by Chinese
researchers as a whole. However the volume of publications has increased from 18 per 1000
researchers in 1995 which can also be seen in figure.

26
Figure 18: Science and engineering articles per thousand researchers in selected countries
(OECD, 2008, pp.332)

Figure 19: Science and engineering articles per thousand researchers in selected countries
(OECD China, 2008, pp.332)

With regard to number of patents filed through the PCT (Patent Cooperation Treaty) of the
World Intellectual Property Organisation (WIPO) China had 3.3 PCT patents applications per
1000 researchers in R&D in 2005, up from a very low base of 0.22 in 1995. The leading
countries on this score include Switzerland with 76.8 per 1 000 R&D researchers and the
Netherlands with 71.3, followed by Germany and Sweden. This shows that the performance
of Chinese researchers in terms of patenting still lags far behind of developed OECD
countries. The figure below shows performance of various nations.

Figure 20: PCT patent applications per thousand researchers in selected countries (OECD
China, 2008, pp.329).

27
5.3 Linkages between universities, government and Industries (Triple
Helix)

Relations between academia and industry are extremely important for building a strong
knowledge based economy. The creation, diffusion and use of scientific knowledge in the
innovative activities of firms are key elements in the performance of the national innovation
system. In China many universities established offices for commercializing science and
technology achievements with six universities (Tsinghua University, Shanghai Jiaotong
University, China East Polytechnic University, Huazhong S&T University, Xi’an Jiaotong
University and Sichuan University) also established national technology transfer centers with
the aim of commercializing university science and technology research. Besides starting
technology transfer universities and university run enterprises Chinese universities were
also instrumental in starting science parks which played an active role in development of
regional innovation. Science parks are also useful in strengthening the linkages between the
university and industry. University based Venture capitalist firms also came up in
universities like Tsinghua,Shanghai Jiaotong and Fudan.The ministry of science and
technology and ministry of education also established 22 national level university science
parks in 2001 and 49 science parks with 49 incubators. Technology markets also proved
useful in transfer of knowledge from the university to the industry for commercialization
process by facilitating transactions between sellers and buyers of technology and
technology services. The flow of graduates from the academia to the industry is also
regarded as one of the most important ways in which the higher education system
influences the industry as the skills of the graduates help in increasing the general level of
knowledge in the industry. (OECD China, 2008)

From 1999 to 2005 the number of science and technology personnel in China increased
steadily to 3815 million with the share of scientists and engineers also increasing to 67.1%.
R&D personnel also increased to 1365 million with share of science and engineering also
increasing to 82%. R&D personnel (in full-time equivalent) also increased steadily to 1365
million, with the share of S&E also increasing to 82%. Breakdown in different sectors show
that increase in science and technology and R&D personnel took place in the business
sector and doubled almost in the second half of 1990’s. (OECD China, 2008, pp.201).This is
also shown in the figure below

28
Figure 21: R&D personnel, science and technology personnel and engineers in large and
medium scale enterprises (OECD China, 2008, pp.203)

Higher education institutes are also relying heavily on government funding whereas the
enterprises and firms are spending 90% of their activities alone. In 2005 the business sector
also provided up to RMB 8.89 billion (36.7%) of R&D funding to higher education institutions.
The figure below shows flows of funds to various actors in the innovation system namely
government, firms, higher education institutions etc.

Figure 22: Flow of R&D funds among various actors in the innovation system (OECD China,
2008, pp.208)

Since the early 1990s there have also been collaborations between foreign companies like
IBM, Motorola, Microsoft, Lucent, Intel, Alcatel, Kodak, Phillips, Ericsson, Siemens and
Chinese universities in order to gain access to Chinese scientific resources and scientific
infrastructure. For the Chinese the advantages are the possibility of access to advanced
technological and scientific knowledge, advanced research, management skills, up-to-date
R&D equipment and improved R&D capacity. Joint research centers and laboratories are also
increasing rapidly. Around 1000 university research centers have also been established and
more recent development also shows the growing importance of joint research centers with
foreign partners and MNC’S. (OECD China, 2008)

There also has been an increase in number of patents both in terms of applications and
grants by universities. Chinese universities have been quite good at patenting rates with the

29
top 20 universities accounting for 63% of the total invention patents. The performance of
the universities in terms of patents is also shown below

Figure 23: Patents by top Chinese universities (OECD China, 2008, pp.221)

Co-patenting between universities and enterprises has also increased. Co patenting between
universities and enterprises rose strongly from 1995 and is more or less stabilized since
2000’s at 0.6% of all the patents. The figure below shows the performance of the co
patenting between universities and research institutions and enterprises. (OECD China,
2008, pp.220-221)

Figure 24: Co patenting activities in 2003 (OECD China, 2008, pp.221)

Technology based business incubator were also started under the Chinese torch programme
and the role was to nurture technology based start ups, commercialize high technology
results and create a community of entrepreneurs linking universities, market and public
research institutions. In 2005 there were 49 national level university based incubators which
in 2005 hosted 6075 firms out of which 1746 were high technology firms. (OECD China,
2008, pp.229) Details of the university based incubators are shown below

Figure 25: Characteristics of university based incubators (OECD China, 2008, pp.230)

It is also difficult to exactly assess the role of higher education institutes in industry
university linkages due to mergers of many universities in China in early 2000’s,creation of
private higher education institutes. Also the R&D activities and public expenditures on
30
universities are also concentrated among a few universities and also restricted to natural
sciences and engineering. Industry university linkages are an important factor in the
development of the Chinese national innovation system and their role becomes important in
China’s future economic growth. (OECD China, 2008, pp.240)

5.4 Internationalization of the tertiary education system in China and

its implications

The Chinese government is also trying to attract students and researchers from overseas
nations. In 2005 around 44337 foreign students graduated from China with number of
foreign student entrants reaching 60904 and foreign student enrolments reaching 78323.
Foreign students studying in China are mainly interested in Chinese language studies as well
as for expanding their specialized China related skills for gaining more job opportunities in
companies doing business with Chinese firms.

The Chinese government has also introduced various programmes to encourage and attract
foreign students to China for higher-level study and research such as the Great Wall
Scholarship, Scholarship for Chinese Cultural Studies and the Outstanding Student
Scholarship. Furthermore the Chinese government has also removed restrictions limiting
foreign students from working part-time and activities restricted to teaching alone. The
figure below shows the data related to number of foreign students in China.

Figure 26: Foreign students in China (2005) (OECD China, 2008, pp.334)

China also has taken measures to promote study abroad for students. The number of
students going out from China for higher studies abroad has rapidly increased since 1995
and the trend has also increased since 2000. In 2005 118515 Chinese students were
studying abroad. The details of the number of Chinese students studying abroad are also
shown in the figure below. This clearly shows that the number of Chinese students going
abroad is increasing steadily and will also likely to continue.

31
Figure 27: Enrollment rate of Chinese students in foreign countries (OECD China, 2008,
pp.336)

Among the nations where Chinese students are going abroad United States is one of the
important destination but EU overtook the position in 2005 and is also becoming a major
center for higher education for the Chinese students. This is also shown in the figure below.

Figure 28: Chinese student enrollment in selected countries (OECD China, 2008, pp.337)

The Chinese government is also taking action to attract highly skilled foreigners to work in
universities, research institutes and enterprises to establish their own businesses in China.
The Chinese Ministry of Personnel is also promoting the return of highly skilled Chinese
graduates by creating more favorable policies for them. Human mobility also has become a
central issue in order to build a national innovative environment. China is also facing issues
related to brain drain as the out migration of students is more than the return migration and
Chinese government is also making effective policies to encourage return migration. (OECD
China, 2008). The Chinese government is also opening up the Chinese education system and
establishing educational co operation and relationships with over 170 countries around the
world and signing hundreds of bilateral and multi lateral educational agreements. One of the
best universities in China, Peking University has also signed co operation and exchange
programmes with more than 200 universities and research institutions in 49 countries. The
Chinese government is also participating and supporting activities organized by UNESCO,
UNEP, UNPF, UNICEF, APEC, ADB etc. The Chinese government is also granting a number of

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scholarships to attract international students in order to raise the reputation of Chinese
universities and also for building world class Chinese universities. Policies are also being
framed for increasing part time job opportunities for international students and also for
promoting Chinese language training with the (National leading group of the Chinese
language council International). (OECD Thematic Review China, 2007)

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