Wang Yiming: Driving the Conversion of Growth Drivers [1] through the "Dual Wheels" of Technological and Institutional Innovation
Currently, our country is in a critical period for the conversion of kinetic energy [1] from old to new driving forces. At the Central Economic Work Conference, General Secretary Xi Jinping summarized and refined our Party's regular understanding [2] of economic work, which includes the principle that we "must coordinate the relationship between cultivating new driving forces and renewing old driving forces, and develop new quality productive forces according to local conditions." This is both a theoretical abstraction and a practical summation of China's economic development experience, as well as a scientific guide for economic work, embodying the latest achievements of Xi Jinping Economic Thought. Technological innovation is the core element for developing new quality productive forces. To develop these forces according to local conditions and promote the conversion of driving forces, we must continue to do well in the "great essay" of innovation—strengthening technological innovation, particularly original and disruptive innovation, and accelerating the realization of high-level technological self-reliance and self-strengthening. We also need to further comprehensively deepen reform to form new types of relations of production compatible with these forces. To implement the spirit of the Central Economic Work Conference, we must deeply study and comprehend the profound connotation of "coordinating the cultivation of new driving forces and the renewal of old ones." Targeting the bottlenecks and constraints of industrial transformation and upgrading, we should use the "twin-wheel drive" of technological and institutional innovation to promote a smooth succession from old to new driving forces, injecting a steady stream of powerful momentum into high-quality development.
Scientifically Understand the Relationship Between Cultivating New Driving Forces and Renewing Old Ones
Economic development is a continuous process of succession from old to new driving forces. Both history and reality demonstrate that new and old driving forces are interconnected and mutually influential. New driving forces are often born from the transformation of old ones, emerging through a "nirvana of the phoenix" [3] within the old structures; meanwhile, the renewal and iteration of old driving forces require the leadership and impetus of the new. The relationship between the two is dynamic. Through transformation and upgrading, old driving forces can become new ones; conversely, as times change and technology evolves, new driving forces may become old ones. Therefore, we must use dialectical thinking and a developmental perspective to understand this succession.
After more than 40 years of development since the Reform and Opening-up, China's economy has entered a critical phase of transition. For example, the real estate industry was a major driving force for the Chinese economy in the past. However, with profound changes in market supply and demand, the industry is undergoing deep adjustment. In recent years, China's "New Three" [4] products—new energy vehicles, lithium batteries, and photovoltaic products—have shown strong growth and rapid export increases, but in the short term, they cannot yet offset the demand gap created by the deep adjustment in real estate. Similarly, the large-scale expansion of China's heavy and chemical industries is nearing its end; traditional industries have reached their peaks and entered a "plateau period," with the space for capacity expansion gradually narrowing. Meanwhile, strategic emerging industries have accelerated their growth, yet they account for only about 13% of GDP—not yet enough to hedge against the loss of momentum caused by the slowing expansion of traditional industries. This requires us to actively promote a smooth succession of driving forces.
To achieve this conversion, we must scientifically grasp the dialectical relationship between "establishing" and "breaking" (立与破), adhering to the principle of "establishing the new before breaking the old." China's traditional industries are large in scale and widely distributed, accounting for about 80% of the value-added of industrial enterprises above designated size [5], forming the "bedrock" of our real economy. This dictates that traditional industries still play an irreplaceable role in promoting growth, absorbing employment, and stabilizing industrial and supply chains. Promoting the conversion of driving forces must not neglect the transformation and elevation of traditional industries. In fact, traditional industries are not necessarily "backward" industries; through digital transformation and intelligent upgrades, they can radiate new vitality. For instance, in the past two years, China's shipbuilding industry has accelerated its digital and intelligent transformation. Not only do our completion volume, new orders, and order backlog rank first in the world, but our R&D capabilities and technical levels have also improved significantly, achieving a simultaneous leap in shipbuilding quality and efficiency.
In coordinating the cultivation of new driving forces and the renewal of old ones, we must exert effort across emerging industries, future industries, and traditional industries in a synergetic manner. On one hand, we must adapt to the new trends of the technological revolution and industrial transformation, cultivating strategic emerging industries such as next-generation information technology, artificial intelligence, aerospace, new energy, new materials, high-end equipment, and biomedicine to become new engines of growth. Simultaneously, we must make forward-looking layouts for "future industries" such as humanoid robots and biomanufacturing to open new tracks for industrial development and win new advantages in future competition. On the other hand, we must take high-end, intelligent, and green development as our strategic direction to transform and upgrade traditional industries—promoting equipment renewal, process upgrades, digital empowerment, and management innovation to achieve a significant leap in the level of productive forces.
Technological Innovation is Key to the Smooth Succession of Driving Forces
The conversion of driving forces often originates from revolutionary technological breakthroughs. Every technological breakthrough in human history—from the invention of the steam engine and the use of electricity to the popularization of computers and the internet—has accelerated the transition between old and new driving forces.
Currently, a new round of technological revolution is developing rapidly, characterized by cross-disciplinary fusion and multi-point breakthroughs in fields such as AI, quantum technology, and life sciences. Simultaneously, the paradigm of scientific research is undergoing profound change. International technological competition is moving upstream toward basic and frontier fields; the importance of original and disruptive innovation is increasingly prominent. Original innovation mainly solves technological problems from the source and the "bottom layer" through basic research; it is the wellspring of technological innovation. Disruptive innovation is "explosive" innovation formed through the accumulation of technology based on new scientific principles and technical architectures, driving revolutionary changes in industrial technology and models. In this new round of revolution, AI is the most active frontier, while quantum computing, quantum communication, genomics, and brain-computer interfaces are also gestating new breakthroughs. These innovations break through the boundaries of production possibilities, giving birth to new industries, new business forms, and new models, thereby reshaping the industrial ecosystem.
From the perspective of the laws of technological innovation, turning scientific achievements into new driving forces requires not only focusing on "0 to 1" breakthroughs in basic research and "1 to 10" breakthroughs in applied basic research but also "10 to 100" commercialization and "100 to N" large-scale industrialization. This process requires not only original and disruptive innovation but also innovation in key generic technologies, frontier leading technologies, and modern engineering technologies to achieve "full-chain" innovation from conceptual design and R&D to pilot testing [6] and final products. Since the 18th CPC National Congress, under the leadership of the Party Central Committee, China's technological undertakings have achieved historic achievements and undergone historic changes. At the same time, we must recognize that insufficient original innovation capacity and a lack of major original achievements remain "short boards" [7] in our innovation system; low conversion rates of scientific achievements and sluggish conversion channels are "weak points." The conversion of scientific achievements is essentially a process of matching technological supply with market demand, as well as a process of diffusing technology into industrial fields to promote transformation, upgrading, and economic efficiency. The immense value inherent in scientific achievements can only be transformed into actual productive forces when they are turned into products and integrated into industrial development.
Precisely for this reason, to coordinate the cultivation of new driving forces and the renewal of old ones, we must work synergistically on both technological innovation and the commercialization of results. On one hand, we should encourage universities and research institutes to strengthen their original innovation capacities in basic research to achieve major breakthroughs in strategic, core technologies. On the other hand, we must accelerate the expansion of channels for converting achievements, establish specialized conversion agencies, build a professional force of technology brokers, and construct a full-chain conversion system to create a healthy ecosystem. We must leverage China's advantages—such as our ultra-large-scale market, complete industrial system, and abundant application scenarios—to better match technological innovation with industrial supply and demand. We should layout and build a batch of platforms for concept verification and pilot testing to allow more scientific achievements to be transformed into actual productive forces.
Institutional Innovation is Fundamental to the Smooth Succession of Driving Forces
General Secretary Xi Jinping has pointed out: "Innovation is a systematic project in which the chains of innovation, industry, capital, and policy are intertwined and mutually supportive," and "Technological innovation and institutional innovation must function synergistically, like two wheels spinning together." Institutional innovation can unleash the massive potential of technological innovation. To promote the smooth succession of driving forces, we must strengthen institutional innovation to provide a powerful guarantee for technological progress.
To promote this succession, we need to create a favorable innovation ecosystem. While the transition requires government planning and promotion, this does not mean using administrative force to directly allocate resources. If there is a "mad rush" (一哄而上) into fields identified as new driving forces, it often leads to resource misallocation, redundant construction, and overcapacity. Strategic emerging and future industries have high technological content, fast iteration, and large capital requirements; redundant construction in these areas leads to even greater waste. Therefore, the government must "do some things and refrain from doing others" (有所为、有所不为). It must shift from its past reliance on administrative power to grab factor supplies and construction projects toward cultivating a healthy innovation ecosystem and focusing on institutional supply and service innovation. Practice has proven that an innovation ecosystem is more important than innovation resources. Since resources are mobile, a good ecosystem will continuously attract resources and allow potential to burst forth.
The government’s "proactive" role should manifest in: increasing investment in basic research to support long-cycle, high-risk scientific projects; strengthening policy support for corporate R&D in pre-competitive stages; implementing policies like the "super-deduction" for R&D expenses [8]; smoothing the channels for the conversion and industrialization of results; adhering to "inclusive and prudent regulation" [9] while easing market access for new industries and business forms; and increasing construction of new infrastructure such as Big Data and large-scale computing power to lower external costs for market entities. Most importantly, creating a good ecosystem requires strict protection of property and intellectual property rights, transparent business rules, fair market competition, healthy venture capital and private equity sectors, and sufficient investment in human capital. This ensures that the market's decisive role in resource allocation is realized. If the ecosystem improves, enterprises nurturing new driving forces will "spring up like bamboo shoots after rain" [10], new growth points will emerge, and the conversion of driving forces will accelerate.
To promote the smooth succession of driving forces, we also need to form a virtuous cycle of "Technology—Industry—Finance." Technological innovation is the primary power, industrial innovation is the main channel, and financial innovation is the catalyst. Currently, China's financial system, dominated by indirect financing (bank lending), has mature models for traditional industries but faces a mismatch between financial services and the financing needs/risk profiles of technological and industrial innovation. For example, technological innovation is high-risk while financial institutions seek stable returns; tech firms need "patient capital" (long-term money) while institutions prefer "short-term money"; tech SMEs need "small money" while institutions are used to "big money"; and tech firms are "R&D-heavy and asset-light," making it difficult to provide the collateral that institutions typically require. The "Resolution" of the Third Plenary Session of the 20th CPC Central Committee proposed "building a technology-finance system compatible with technological innovation." To implement this, we must encourage the development of venture capital, equity investment, and angel investment funds; support long-term, patient, and strategic capital in investing in innovation; explore new models for credit financing to support technology; and use technologies like blockchain and AI to lower the costs and risks of serving tech firms. In short, we must improve the intensity, breadth, and precision of financial support.
Furthermore, we must deepen reforms in related fields. The conversion of driving forces is dynamic, and reform must advance with the times. We should further deepen the reform of granting property rights for service-related technological achievements [11], establish a separate management system for these assets, and allow researchers greater autonomy in the distribution of income from the conversion of their results. We must deepen the market-based allocation reform of production factors, establishing basic systems for data property rights, circulation, and distribution to release the potential of data. We should improve the market for technical factors and smooth the channels for turning achievements into productive forces. We must deepen the reform of the science and technology system, improve the management of government R&D programs, and increase the proportion of spending on basic research. We should strengthen the dominant role of enterprises in innovation and foster deep integration between industry, academia, and research led by enterprises. Finally, we must reform the personnel system—cultivating strategic scientists and world-class talent, and establishing an evaluation system oriented toward innovation capacity, quality, and actual contribution. In short, through reform, we must pull the strengths of the government, market, and society together into a single "rope" to create a powerful synergy for the conversion of driving forces.
Promoting the smooth succession of driving forces provides a path for high-quality development. Faced with pressures and challenges, we must coordinate the cultivation of new momentum and the renewal of the old. With strategic resolve, a global vision, and systemic thinking, we will use the "twin-wheel drive" of technological and institutional innovation to allow traditional industries to glow with new vitality, emerging industries to release new advantages, and future industries to open new tracks—thereby gathering the majestic power to drive high-quality development.
(The author is the Vice Chairman of the China Center for International Economic Exchanges)
Source: People's Daily (February 20, 2025, Page 09)