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Chinese Innovation Performance Development and Evolving Forms of Global Talent Flow

Paula Makkonen


Individuals have greater freedom to choose where to study, work, and live than ever before. Therefore, the mobility of people across geographic and cultural boundaries has fundamental implications for globalisation (Shenkar, 2004). No wonder human capital has been described as central not only to the growth of a country’s economy but also to its competitiveness in the knowledge-based global economy (Daugeliene & Marcinkeviciene, 2015). This is because global talent flow (see Carr, Inkson, & Thorn, 2005) helps transfer technologies and knowledge across borders (Daugeliene & Marcinkeviciene, 2015I . An increased level of mobility is hence an important manifestation of the internationalisation of professions and professional labour markets as well as the development of innovation performance in individual nations (Carr et al., 2005; Soberg,

P. Makkonen (h)

Department of Management, University of Vaasa, Vaasa, Finland © The Author(s) 2017

S. Kundu, S. Munjal (eds.), Human Capital and Innovation, DOI 10.1057/978-1-137-5656l-7_8

2010). Consequently, labour-based migration is ‘likely to continue to be important in the future, because of continuing strong pressures for global integration, capitalism’s demand for certain type of labour, and people’s desire to migrate in order to improve their life-chances’ (King, 2012, p. 26).

Innovation performance refers to a nation’s capability to create new innovations (Soberg, 2010). Innovations are said to require a recognised need, financial resources, relevant technology but especially human capital, in the form of competent people (Engelberger, 1982). Human capital, which incorporates talented individuals and their capacity to transfer their knowledge, skills, and abilities are hence said to be the most important elements demonstrating a country’s ability to compete in the global market (Daugeliene & Marcinkeviciene, 2015).

China is one of the world’s most rapidly developing markets (Morrison, 2014) and has announced its intention to transform itself into an innovative society by 2020, and to be a world leader in science and technology by 2050 (Abrami, Kirby, & McFarlan, 2014). One scheme facilitating this target is a recent ‘Made in China 2025’ programme, which according to Chinese Premier Li Keqian aims to ‘seek innovation-driven development, apply smart technologies, strengthen foundations, pursue green development and redouble our efforts upgrade China from a manufacturer of quantity to one of quality.’ This target is driven, like in many other emerging countries by central government policies including interventions, regulations, execution of controlled integration, generous funding for public companies (Reslinger, 2013) as well as incentives for attracting western-educated talent, both foreign and Chinese origin to return (Zweig, 2006). Commentators, however, report challenges to this aspiration. Chinese culture is based on a natural preference for knowledge exploitation—an activity that favours making use of knowledge over creating new knowledge (Baark, 2007), a cultural feature that will make it difficult to meet the growth aspirations announced. Different forms of global talent flow—brain gain (Saxenian, 2005), brain drain (Baruch, Budhwar, & Khatri, 2007) Beine, Docquier, & Rapoport, 2008; Docquier & Rapoport, 2012), and reverse brain drain, sometimes referred as brain circulation (Saxenian, 2005; Daugeliene & Marcinkeviciene, 2009)—could therefore be expected to contribute to this ambitious plan. However, little is known of how China might move from imitation to innovation (see Yip & McKern, 2014) or how different forms of global talent flow appear from the perspective of innovation performance development in China.

This study is hence focused on answering the question: How do different forms of global talent flow (brain drain, brain gain, and reverse brain drain) appear in the different phases of China’s innovation performance development and why. By answering this question, this study contributes to the talent mobility and innovation literatures. This is done by illustrating the innovation performance development of China and explaining the impacts and appearance of different kinds of global talent flow (see also King, 2012 for labour-related migration) during each innovation process development phase. Global talent flow, for example immigration and repatriation of self-initiated expatriates (SIEs), has been theoretically explained by using push and pull factors as well as intervening obstacles (Lee, 1966) or shocks (Tharenou & Caulfield, 2010). Also in this study, these factors are used to facilitate answering the research question. Pull factors are attributes that increase global talent flow and enhance China’s innovation capability, whereas push factors are the ones that decrease it. This understanding is relevant not only for other emerging markets aiming to develop their innovation performance, but also for organisations focused on investing in and transferring their core technologies to emerging economies.

The study starts with a review of the literature on the different modes of global talent flow and of China as a context for studying innovation performance development, and modes of global talent flow. After the presentation of the methods, findings, and the discussion section, the study addresses its practical implications and limitations, and finally offers suggestions for further research.

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