The second annual report focuses on China’s 100 most innovative enterprises which span 24 diverse industries with emphasis on hi-tech industries, and names 25 honorees again from 2016. They are joined by 25 new enterprises this year.The 2017 report identifies a shift towards a domination of companies in hi-tech industries such as Electronic Components, Communications Equipment and Media Internet, in contrast to the dominance of the automotive, domestic appliances and electric power generation and supply industry in the 2016 report.  The full list of innovators spans a wide range of engineering sectors including General and Special-purpose Machinery, Automotive and Electrical Equipment, and other areas such as Consumer Goods and Healthcare.This second report created by Clarivate is based on rigorous analysis of four main criteria, using data from its Derwent World Patents Index comprising:

• Patent volume
• Patent-grant success rate
• Invention influence – how often the organization’s invention is subsequently cited by other companies in the patenting of their inventions over the most recent five years
• Global reach – the ration of inventions filed for protection in countries outside China versus the total volume for that period.

The analysis covers companies in mainland China only and excludes Hong Kong, Macao and Taiwan. The scores for each of these metrics are merged to produce a combined score for each organization analyzed.

China has seen a steady increase in R&D expenditure as a proportion of GDP over the past decade 2006-2015 from 1.37% in 2006 to 2.07% in 2015, an increase of 51%. In the same period, the total number of patented inventions rose from 85,000 in 2006 to 1.67 million in 2015, an astounding increase of over 1850%. China now accounts for six out of every 10 patents published worldwide (sources: OECD, Derwent World Patents Index). Turning to basic and applied scientific research which forms the foundation of the innovation lifecycle, China’s overall research output has grown significantly in recent years. Globally, the country’s share of research papers increased in 14 fields as tracked by Clarivate Analytics Web of Science between 2007 and 2016.

Here are some of the report’s key findings:

• The 2017 Top 100 Chinese Innovators list is grouped into *four tiers according to the weighted scores from the criteria used to evaluate innovation performance for the purpose of visualizing innovation strength and competitiveness of these companies. All 25 Tier 1 companies from 2016 are listed this year, which demonstrates their consistent innovation strength and that innovation is a long-term process.
• This year’s list sees 25 new enterprises from across diverse industry sectors headed by Consumer Electronics and Electronic Components. This again emphasizes the increasing role that electronics is playing in innovation across many industry sectors as China and the rest of the world transition towards smarter technologies, the Internet of Things (IoT) and Industry 4.0.
• Only 12 of the total 31 provinces of China are represented in the list, indicating that innovative Chinese companies are still concentrated in the eastern region of the country, compared to 15 provinces in 2016.  Beijing, the capital of the country, is again clearly the innovation hub with 42 companies on the list. The next most innovative province is Guangdong in southern China with 27 corporations, six more than in 2016. Shanghai, Shandong, Zhejiang, Anhui, Henan and Jiangsu all perform strongly.
• Globalization analysis clearly shows again that most of the Chinese Top 100 innovators remain focused on protecting their innovation in domestic markets. This is evidenced by the fact that 73 of the Chinese Top 100 organizations have invention patent portfolios for 2012-2016 comprising 90 percent or more which are filed in China only.
• However, a significant proportion of companies are becoming increasingly global in outlook headed by ZTE who has 66% of their 2012-2016 invention portfolio filed outside China. ZTE is followed by Huawei (65%), AMEC (63%), Alibaba (56%) and BOE Technology (38%). These companies are all leading players in the global hi-tech electronic components, communications, consumer electronics and media internet industries and clearly show China’s growing global influence in these areas.

Said Bob Stembridge, principal patents analyst, Clarivate Analytics, “Innovation quality can generally be measured by the success rate – the number of granted patents out of patent applications. A comparison shows a slight fall in the success rate of obtaining granted patents of 4.9% amongst this year’s Chinese Top 100 innovators compared to 2016. This reflects a trend which Clarivate has observed globally towards focusing more on the quality vs quantity of protected innovation, and hence fewer applications proceeding through prosecution to become granted patents. This could be due either to patent offices raising the standard required to obtain granted patent rights, or it could be due to organizations abandoning lesser-quality inventions earlier. Either way, this results in a higher quality of innovation in lesser volume.”

Commenting on China’s innovation-driven development, Linda Guo, managing director of China for Clarivate Analytics, said, “As the world’s second largest economy after the US and the largest commodity exporter, China continues to drive economic growth through its implementation of its ‘National Strategic Framework for Innovation-Driven Development’, supply-side structural reform and implementation of the Belt and Road initiative. During this long-term transformation, Chinese enterprises also need to overcome challenges such as issues of market access, competition, policy and intellectual property rights.  At Clarivate, we have a long tradition of helping our customers accelerate their innovation with our trusted insights and analytics. We look forward to helping Chinese enterprises succeed by protecting their intellectual property and supporting their innovation development.”

The report used patent information and data collected from the Derwent World Patents Index and Derwent Patents Citation Indexbetween 2012 and 2016. The report is available for download in both Simplified Chinese and English.
Download the English report here. Click here to download the Simplified Chinese report.