Global talent flow is said to help to transfer technologies and knowledge across borders (Daugeliene & Marcinkeviciene, 2015) and contribute to the innovation performance of the receiving country (Soberg, 2010). The current study sheds light on the development of the innovation performance of China and how emerging countries might acquire new knowledge and learn new ways of being innovative (Kuznetsov & Sabel, 2006). To do so it posed the research questions: How do different forms of global talent flow (brain drain, brain gain, and reverse brain drain) appear in different phases of China’s innovation performance development and why. The research questions were addressed by assessing different types of innovation performance development phases, as well as the appearance of three different modes of global talent flow in China.

Developed economies have often been blamed for talent deployment of emerging economies. Even if the accusations are well founded, the current study offers other kinds of plausible interpretations and alternative viewpoints of the brain drain and brain gain phenomena. In contrast to mainstream literature, the current study illustrates how the issues of global talent flow are not challenging for emerging countries alone, but are a challenge for organisations and countries from the developed world too.

In discussing these themes, this qualitative study makes key contributions to two bodies of literature. First, the current research contributes to the small volume of innovation literature on China and to our current understanding of the development of the innovation performance phases observed in China. Yip and McKern (2014) posed the question of how China was moving from imitation to innovation without apparent distinctions between the innovation phases. The current study offers a more refined assessment of the innovation phases of China and provides explanations for such transitions. Second, the current research contributes to the global talent mobility literature by illustrating and explaining the involvement of different modes of global talent flow at each phase.

The current study identified three distinctive innovation performance development phases in China: the eras of copy and imitation; of evolution; and of revolution. Each of these phases emphasises different forms of global talent flow. Emerging economies are typically reported to suffer from the effects of brain drain of locally educated talent (Beine et al., 2008). However, in the case of China, the situation seems unconventional. In contrast to the suggestions of the mainstream global talent flow literature examining emerging markets, China does not seem to have suffered from the effects of brain drain. Instead, Chinese brain drain has been a strategy facilitated at governmental level and one highly very deliberately encouraging reverse brain drain. Hence, this study meets the recommendation of Baark (2007) and sheds light on how innovation performance development in China is being built on the foundation of the technological exploitation of western innovations and of western knowledge.

The assessment of different innovation phases of China revealed how as Engelberger (1982) suggested, the capability to innovate is related to need, the amount of capital, relevant technology, and availability of talent. Regarding the third identified and forthcoming era, the era of revolution, China has announced its intention to become an innovative society by 2020 and a world leader in science and technology by 2050 (Abrami et al., 2014). The findings of this study permit us to assess whether the aspiration is a realistic one, and reveal how much is related to and expected of China being able to reap the benefits of the innovation seeds it sowed. Other pull factors that facilitate this aim are related to the need for such innovations, high volumes of local talent, and moreover to political will, and access to public capital. This political announcement does however reflect the current challenges China is facing. Although China does possess the features of an innovative society that can be expected to contribute to transformation (Abrami et al., 2014), the findings highlight the push factors that hinder its efforts of advancing to the next innovation phase of revolution.

The findings of this study complement the available literature in offering multiple explanations for such push factors and intervening obstacles (e.g. Baark, 2007). Examples include governmental policies that aim at attracting chosen talent and technologies, but on the other hand increase restrictions for the movements of foreign capital and labour force. Those explanations relate also to China’s political systems as well as its cultural and institutional context, for example, local organisations being managed and students educated based on hierarchical and paternal management structures and practices (Baark, 2007; Yip & McKern, 2014; Soberg & Han, 2014), or perhaps the emphasis on groups rather than individuals. Challenges also include the tradition of controlling the distribution of information and knowledge among the population (Spencer, 2001; Baark, 2007), and also those related to the transition from central planning to a market economy (Liu & White, 2001). Moreover, the findings confirm how aspects of innovation that are collaborative, but which demand trust have been neglected in China (Soberg & Han, 2014), something confirmed by the findings of this study. For example, although recent reports indicate improvements (European Chamber, 2016), has the Chinese government been accused of failing to protect IPR (Abrami et al., 2014). Many western organisations with substantial R&D investments in China have already left the country, not only due to financial considerations, but also as a result of technology and knowledge exploitation. It might perhaps be reasonable to argue that in order to achieve the next phase, there should be what Daugeliene and Marcinkeviciene (2009, p. 50) described as ‘changes not only (related to) economic cooperation, but also the mindset of societies and management principles.’ Despite efforts to enhance IPR legislation, China is still a place where trust is vital but cannot be taken for granted due to the shortcomings of its legal system (Jansson, Johanson, & Ramstrom, 2007). The goal of talent self-sufficiency and an advanced level of inborn innovation performance may seem like an ambitious, but achievable target; however, many significant innovations are based on long-term collaborative cooperation between nations based on trust, not on exploitation.

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