Formation of the dual innovation systems in China

Over seven decades, the state-owned enterprises (SOEs) have been significantly conducing to China’s economic development. Yet in terms of their innovation, readers may have doubts and enthusiastically wonder how it happens. As SOEs’ existence and development were largely based on the institutional arrangement, their efforts for innovation and ecosystem development were also pertinent to it. This chapter thus demonstrates such institutional influence by revealing how the constant economic reform started in the late 1970s fostered the dual innovation systems, how the dual innovation systems determined the disparate motivations, patterns and accessible resources of SOEs’ and private enterprises’ (PEs’) innovations, and how in such a context the SOEs and PEs were stimulated to build up their specialties with suitable orientations of industry, as well as collaborate and compete with each other.