Zhou Zhenhua: Innovation only can upgrade Shanghai's “urban energy level” and core competitiveness

Zhou Zhenhua, Director of the Shanghai Global City Research Center

Innovation is vital to the development of any country. China's economy is shifting from rapid growth to high-quality development, for which the driving force of innovation is even more essential, as it always is for such a critical transition from "old fuel"to "new fuel." The low-level expansion highly reliant on large investments of manpower and material resources and in real estate development will not work any longer. For high-quality development, the country must have a modernized industrial system and enhance industrial competitiveness, both of which can only be made possible by innovation.

Since China's 12th Five-Year Plan proposed "innovation-driven development, economic restructuring and upgrading," Shanghai has achieved remarkable results. The city's transformation is manifested in the following four aspects: firstly, its two-wheel driven economy has shifted to a service-dominating economy; secondly, the "four dependences" (on heavy and chemical industries, real estate, labor-intensive industries, and investment) have been decreasing and "four new economic patterns"(characterized by "new technologies, new industries, new formats and new models") are rising ; thirdly, traditional growth points are being replaced by new ones; and fourthly, in terms of the urban structure Shanghai is transforming from a one-center city to a multiple-center one, with the city's functions becoming diversified.

Shanghai still has a long way to go in upgrading its economic development. Although the service industry is dominating in its economy, its "modern service industry" is not robust yet. In terms of urban space, the networking connection between its multiple centers is far from adequate. Moreover, although its urban functions are becoming diversified, those diversified functions have not been sufficiently integrated. In addition, stable as Shanghai’s economy is, it implies the potential risk of "solidified stability." Stability is a good thing, but once such stability is solidified, the economy is liable to losing steam gradually.

If Shanghai is to continue to improve the city’s “energy level” and core competitiveness, we must strengthen the city’s four major functions. To strengthen its function of allocating global resources, it is necessary to further gather global organizations engaged in international business, possess an international business operation platform, and improve its vitality for innovation and entrepreneurship. To strengthen its function of initiating technological innovation, we have to gather the world's top scientists and organize high-level R&D teams. To strengthen its function of leading development of high-end industries , it is prerequisite to rely on “three keys”: key technologies, key equipment, and key materials. We must improve our intellectual power in integrating resources and systems and increase our discursive power in formulating industrial standards. To strengthen its functions of opening up as a hub, offshore allocation should be developed in addition to onshore allocation, for which institutional innovation and further openness are necessary. 

RELEASE TIME2021-01-02