Abstract

　　Countries worldwide are actively pushing their innovation frontiers into the profound globalized Innovation networks. China is entering into a new phase that experiences the profound transformation of the innovation systems and supporting policies, together with facing the accelerated technological innovation and emerging de-globalization trends. Improving the institution of innovation-driven development, as well as the quality and efficiency of innovation, are beneficial for China to integrate into the global innovation network and move towards the technological frontiers. This study analyzes the phases of the ongoing industrial innovation in China from the techno-economic perspective and proposes a multiple factor framework to explore indigenous technological innovations. We suggest that the factors impacting technological upgrading and innovation capability are technological gaps, complexities of industrial ecology, the density of capital, and market need complexities under open competition conditions. These factors are necessary but not sufficient conditions for the success of cultivating the capability of technological innovations. The government must fulfill its roles adequately and effectively and pay more attention to the limits and focus of innovation policies. We propose that China’s innovation policies need to be flexible towards the changing world’s opportunities and challenges. China needs to boost its strengths towards an initiative and exploring role in the global innovation scene. Solid fundamental research and applications urgently need to support the layout of the upgrading of technological capabilities that bundled by greater openness and inclusiveness. Meanwhile, policies need to be transformed to guarantee equal benefits and greater tolerance to deliver an innovation-friendly system.