1. B REAKTHROUGH ? C HINA ’ S AND I NDIA ’ S T RANSITION FROM P RODUCTION TO I NNOVATION TILMAN ALTENBURG German Development Institute, Bonn, Germany HUBERT SCHMITZ Institute of Development Studies, Sussex, UK ANDREAS STAMM German Development Institute, Bonn, Germany W ORLD D EVELOPMENT V OLUME 26, I SSUE 2, F EBRUARY 2008, P AGES 325–344 Alex Kazakov Levi Harvith 1

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3. A RTICLE S TRUCTURE : No single approach is sufficient to understand the catch-up process. Assessing the progress made on the basis of available overall indicators. Analyzing four specific industrial sectors which provide initial answers to the main question. Findings and dissecting which trends favor technological catch-up and which ones might hamper it. Implications for the OECD countries and the developing world. 3

4. U NDERSTANDING THE CATCH - UP THEORY No single approach is sufficient: The innovation systems approach Conceptualizing external linkages Understanding the dynamics 4

5. A DVANCEMENT MADE BY C HINA AND I NDIA Where do China and India stand in the international pecking order? In comparison to previous years? The difficulty of measuring innovation Indicators of China’s and India’s innovation efforts and performance 5

6. U NDERSTANDING THE BUILDUP OF INNOVATION CAPABILITIES FROM SELECTED INDUSTRIES The electronics industry in China The auto industry in China The software industry in India The space industry of India 6

7. W ILL C HINA AND I NDIA CATCH UP ? Fast growth and high savings rates Elements of innovation systems be codified Governments trade market access for technologies Researchers and engineers integrating in transnational scientific and technical communities 7

8. Market size and expansion Capital accumulation Heavy investment in human resources FDI-foreign direct investment strong presence in global professional networks UNIQUE! 8

9. IMPLICATIONS FOR THE REST OF THE WORLD Implications for OECD countries Implications for developing countries 9

10. 10 QUESTIONS?