Comparing patterns of intersectoral innovation diffusion in Taiwan and China: a network analysis

This paper presents a quantitative method for comparing the structure and performance of intersectoral innovation diffusion in the Taiwanese and Chinese innovation systems. The network of intersectoral innovation diffusion is constructed and proxied by the product-embodied R&D flow matrices calculated by the use of data on input-output tables and sectoral R&D expenditure. The two networks are structurally compared with the help of methodologies derived from the network analysis, which are conducted at the national, cluster and individual levels to thoroughly examine the multi-embededness of the sectors situated in a technological diffusion network. This study shows that the two systems have similar distributions of key sectors, including the cores, i.e. machinery and equipment, electronic parts and components, and the sources, i.e. chemicals and basic metals, of innovation flows. However, significant differences also exist. For example, the Taiwanese system is characterized by higher degrees of systemic connection and hierarchy, while the Chinese system has looser density and less centralization. Additionally, the Taiwanese system appears capable of more efficient innovation diffusion among vertically related industries than the Chinese system due to the former containing more effective clusters. Finally, China's technological concentration is centered on heavy industry, while Taiwan is focused on high-tech industry. Keywords: Intersectoral innovation diffusion; Innovation system; Network; Taiwan; China