The Effect Analysis Of Technical Innovation In The Dual Economy Transition

During the past30years of reform and opening-up, China’s sustained a rapideconomic growth, the real average annual GDP growth rate is as high as9.8%,not onlysignificantly higher than the average growth rate of6.1%from1953to1978,but alsohigher than that of Japan’s economic take-off which is9.2%and South Korea’s8.5%inits economic take-off phase. China’s GDP in2010at an average exchange rate equals toUS$5879.1billion, more than Japan, which made China the world’s second largesteconomy after the United States; Per capita GDP grows from1978of$190to2013of$6767,and according to the division standard of the world bank,China has jumped fromthe low-income countries to the middle-income countries.Though we have these achievements, we should realize soberly, that there are stillseveral serious problems in China’s economy: the dual constraints of the environmentresources and the market demand in the development of economy; the urban and ruralemployment pressure in the labor resource allocation and utilization; the macroeconomicfluctuations caused by the economic imbalance in the operation of investment andconsumption, etc. The crux of the problem, influenced by the lag of dual economicstructure transformation, from deep analysis, is the binary contrast between industry andagriculture,between urban and rural areas. Decision of the CCCPC on Some Major IssuesConcerning Comprehensively Deepening the Reform clearly puts forward "Theurban-rural dual structure is a main obstacle to the integrated development of urban andrural areas. We must improve the mechanisms and institutions to form new relationsbetween industry and agriculture and between urban and rural areas in which industrypromotes agriculture, urban areas support rural development, agriculture and industrybenefit each other, and urban and rural areas achieve integrated development, so that theoverwhelming majority of farmers can participate in the modernization process on anequal basis and share the fruits of modernization."To promote the dual economictransition in the new economic environment home and abroad, we are confronted withthe most complicated contradictions among all developing countries. It’s not enough tosolve such contradictions only with capital accumulation brought about by economicdevelopment, but technical innovation is necessary. Since the1990s,with the increasing impact of rapid development of science andtechnology on regional economic development, technical innovation has become thebasic power and the key factor in economic and social development, and is profoundlychanging the pattern of regional economy. The supporting role of science and technologyin economic development is becoming stronger,and the development of science andtechnology largely determines the international status of countries.The earliestindustrialization of Britain, led by science and technical innovation, through theindustrial revolution, has realized the dual economic transformation.Postwar Japan,starting from its actual development needs, comprehensively took advantage of foreigneconomy and trade policy, industry policy and science and technology policy, withmarket-oriented rules and assisting science and technology plans, promoted the rapiddevelopment of science, technology and economy, achieving the dual economictransformation.Four Asian Tigers as technology late-comers, also realized dual economictransformation by taking technology learning, absorption, and access to advancedinternational technologies as the basis of innovation.At present, China is in the transformation interval of the dual economy transition,and the lasting "shortage of migrant workers" marks the end of the era of unlimited laborsupply. Both the increase of the cost of production factors including labor and thedecrease of external demand as a result of economic crisis, makes the constraint of theresources, evironment and market demand in the dual economic transformation moreobvious. It’s significant for breaking through the resources and environment constraintsand promoting dual economic transformation to give full play to technology innovation,to raise labor productivity,to reduce production costs, and to deepen the division of laborto supply new product and service.This paper,consisting of four parts: theoretical basis, empirical experience,international experience and countermeasures study, analyses the effect of technologyinnovation in dual economic transformation. The first part is the theoretical basis. Itmainly by Ranis-Fei model,Jorgenson model and other classic models abroad and theliterature review by scholars at home and abroad in recent years about the effect oftechnological innovation,starting with the core problem of dual economy transition, thepaper illustrates the effect mechanism of technological innovation to the transformation of dual economic from three aspects: technological innovation promotes the transfer ofagricultural suplus labor; technological innovation breaks through the resources andenvironment constraints and balances the industrial and agricultural development;technology innovation expands the market demand and overcome the lack of demand. Atthe same time, according to the different dual economic transition constraints faced indifferent stages, the paper points out technical innovation path selection in differentstages from the aspects of technical innovation strength, form and route of innovation.Finally, through the analysis of the relationship of technology innovation and institutioninnovation, the paper demonstrates the system conditions needed by technologyinnovation in the dual economy transition, which include the incentive mechanism,diffusion mechanism and risk mechanism of technical innovation.The second part is the empirical experience. It selects four economic variables,including dual contrast coefficient, technical innovation, urbanization rate and GDP percapita, through the establishment of regression model, using the relevant data of1992-2012,analyzes the influence degree of technological innovation to thetransformation of dual economy near the Lewis turning point;Through Granger causalityanalysis, it concluds the individual causal relationship of the technological innovation tothe transformation of dual economic;Through the analytic hierarchy,it processes thecomprehensive index evaluation of technology innovation; Through impulse responsefunction analysis,it concludes the effect process of technical innovation on the dualeconomic transition as the effect time changes. Through the above analysis, it isconcluded that China’s technical innovation acts a promoting role in the transformation ofdual economy, but by far the effect is not large, and then the paper analyses the reasonsof limited technical innovation effect on China’s dual economic transformation fromthree aspects:imperfect incentive mechanism, insufficient diffusion mechanism and lackof risk system of technical innovation.The third part is the international experience. Due to the special geographicalposition and development condition of East Asia, the paper learns from the developmentexperience of South Korea and Japan, analyses the development process, technologyselection strategy and the focus of industrial development of the two countries from theperspective of dual economic transformation, and sums up the characteristics of technical innovation. South Korean completed dual economic transformation and created the"jianghan miracle" mainly through paying attention to technology introduction andinnovation in the dual economic transformation, strengthening the system constructionof technical innovation, giving full play to the guiding role of large enterprises,emphasing the combination of production, study and research, and paying attention to thecultivation of innovative talents. Japan succeeded in the transformation and became thefirst developed country in Asia mainly through the reasonable use of technical innovationorganization, fully giving play to the role of the organizing and guiding effect of thegovernment, and attaching great importance to the predominent status of enterprises.The fourth part is the countermeasures research.Learning from the successfulexperience of devloped countries, the paper puts forward the measures that should betaken in the future mainly aiming at changing the limited effect of technical innovationon China’s dual economic transformation. The measures are mainly as follows: To perfectthe incentive mechanism of technical innovation, improvement should be made in theconstruction of property right system and national innovation system, in the motivationof enterprises innovation, and in the incentive system of market; To strengthen thediffusion mechanism of technical innovation, work should be carried out in theimprovement of agricultural technology popularization system, in the improvement ofagricultural technology market, and in the development of main bodies of scientifictechnology demands; To reasonably transfer and spread risk,effort should be taken in thetransfomation of risk investment mechanism; To reduce the risk of technologicalinnovation, the combination of production, study and research should be promoted. Toestablish and improve the risk mechanism of technical innovation, emphasis should belaid on cultivation of scicence and technology talents and on the formation of mainbodies to share risk.