The Fiscal Foundation Of National Innovation System

The overall effectiveness of the national innovation system is a key factor to promote the self-reliance and self-improvement of China’s high-level science and technology.And it is also an important issue related to the governance decision of modern government to support innovation and the national innovation system in all countries around the world.The current research on how to improve the overall efficiency of national innovation system in China mainly focuses on strengthening national strategic scientific and technological forces,strengthening basic research,carrying out technological breakthroughs,strengthening enterprises’ leading position in innovation,strengthening the construction of scientific and technological talents,optimizing the ecology of scientific and technological innovation and expanding international cooperation.In fact,the government’s fiscal support for science and technology is an important material basis of the national innovation system,and an important factor affecting the overall efficiency of the national innovation system.At present,there is no systematic theoretical study on the fiscal foundation of national innovation system in China,which leads to the insufficient theoretical basis for the government to make fiscal policy decisions for science and technology.In terms of the direction and structure arrangement of fiscal support for science and technology,there exists the problem of unreasonable division of responsibilities between government’s fiscal support and non-governmental investment.The one-sided emphasis on the evaluation of economic performance of innovation has ignored the characteristic facts and operation mechanism of fiscal expenditure on science and technology.Those above problems weaken the fiscal functions in constructing the national innovation system.So,it is necessary to study the fiscal foundation of national innovation system in order to strengthen it and provide theoretical basis for improving the overall efficiency of national innovation system.Government’s fiscal support for science and technology is the main financial channel for the fiscal foundation of the national innovation system.Therefore,this study takes the fiscal support for science and technology and policy arrangement as the starting point,and conducts factual and theoretical research around it,specifically answering the following three questions.First,what is the theoretical basis of fiscal support for the construction of the national innovation system? Second,how does China’s fiscal system face different innovation entities,and how does it support enterprise,research institutions and universities? Third,what are the vertical and horizontal distribution relations and characteristic facts of China’s fiscal budget in science and technology between different governments and departments? Can science and technology expenditure completely depict the whole picture of China’s fiscal support for science and technology? This thesis studies the scale structure of fiscal support for science and technology through empirical analysis and normative analysis methods such as literature research,policy documents analysis,budgetary decomposition analysis,empirical analysis and comparative institutional analysis.From the perspective of fiscal support for science and technology,this thesis analyzes the combination of relevant innovation elements and tools in the national innovation system and the interaction between different innovation entities,and explores the practical path and mechanism to consolidate the fiscal foundation of the national innovation system and improve the overall efficiency of the national innovation system.The research attempts to construct a new theoretical framework,provide a new material basis by establishing the data set of fiscal budgets in science and technology,and provide a new analytical perspective by using the way of budgetary decomposition,so as to provide new research findings and conclusions in the process of solving research problems.This study focuses on China’s fiscal support for science and technology and policy & budget arrangement.For a long time,the basic materials about China’s fiscal science and technology budget are scattered in the budget of governments at all levels and various government departments.And the existing fiscal science and technology budget information involved in the fiscal statistics is relatively old,and there is a data gap of more than ten years.The focus and difficulty of this research need to be broken through is how to obtain the latest fiscal science and technology budget information,so as to comprehensively and systematically study the characteristics of China’s current fiscal support for science and technology.Relying on the author’s long-term research on fiscal basic data and the large number of basic data sets of fiscal budget,this study comprehensively collects the fiscal budget information of China’s central government and its functional departments,as well as Beijing municipal government and related functional departments in 2019,involving a total of 1,400 government budget documents and 38,206 fiscal budget statements.In the form of "cross-sectional",the budget accounts and policy documents involved in fiscal support for science and technology are decomposed and summarized,which is helpful to clarify the basic facts and characteristics of the distribution of fiscal science and technology funds between the central and local governments and various functional departments.In addition to using a large number of basic budget data on science and technology,this study also collects and collates a large number of other data resources,mainly including the R&D investment data of various countries released by the OECD Science and Technology Database,the national and provincial R&D expenditure data released by the National Bureau of Statistics,various scientific and technological statistical yearbook data such as high-tech industries,colleges and universities,and national natural science foundation projects,and the government innovation policy documents database and the science and technology innovation patent database.Those above data provide a detailed and unique data base and material support for this thesis.The full text uses the above basic data and expounds the above research path and results in 8chapters and a total of 175,000 words.In chapter 1,the author introduces the background of the topic selection,the definition of core concepts,research methods and main innovation points.Chapter 2 is the literature review,which introduces the author’s literature research results from the aspects of the theoretical evolution and basic connotation of the national innovation system,the government’s policy practice for the construction of the national innovation system,the status of research on the national innovation system at home and abroad,the theoretical basis of the government’s fiscal support for science and technology,the methodology of the national innovation system research,and the research path of this paper determined based on the results of the literature research.Chapter 3 explores the theoretical basis and analytical framework,which mainly answers the theoretical basis of fiscal support for the construction of the national innovation system,and constructs a theoretical analysis framework of "goal-subject-tool".Chapter 4 compares the scale and structure of R&D investment of different innovation entities,and specifically studies how China’s fiscal support for science and technology supports innovation entities such as enterprises,research institutions and universities.Chapter 5 uses policy documents analysis to study China’s fiscal policy and management system for science and technology.Chapter 6 uses account decomposition analysis of the fiscal science and technology budget to understand the vertical and horizontal network relationship and characteristics of China’s fiscal support system for science and technology.Chapter 7 uses comparative institutional analysis method to sort out the evolution process of the U.S national innovation system,and uses the analytical framework of "goal-subject-tool" to analyze the institutional elements and basic characteristics of the U.S.national innovation system,and then summarizes the experience for China.Chapter 8 is the conclusion and policy recommendation.In the traditional fiscal and economic research paradigm,the necessity of government intervention in scientific and technological innovation activities is often discussed within the realm of market failure theory.However,the hypothetical premise of market failure theory deviates from the practice of innovation system.The so-called information asymmetry,spillover and other characteristics of market failure are precisely the source of innovation.Market failure theory can neither guide the policy orientation of fiscal support for innovation systems,nor can it accurately define the relationship between innovation subjects and the boundaries of innovation entities,and even mislead academic research to simply position the goal of fiscal support for innovation as making up for market failure and improving the economic performance of innovation.The system failure theory of the national innovation system negates the market failure theory from the theoretical assumption,emphasizing the need to rely on the interconnection between different parts of the innovation system and policy coordination between different institutions to solve the possible failure of the entire innovation system.The market failure theory and the system failure theory are quite different in terms of research subjects,basic assumptions and research objectives.However,it is not enough to explain the inherent compatibility of market forces and non-market forces in innovation activities,as well as the relationship of fiscal supports for science and technology between government and other innovation entities such as enterprises.It is urgent for academic research to establish an analytical framework that can explain and predict the fiscal foundation and policy practice of national innovation system in accordance with China’s basic national conditions.Based on the existing literature,this thesis determines the theoretical basis and analytical framework through normative analysis.In reference to the new growth theory,evolution economics and institutional economics and other relevant system points of national innovation system,this study expounds the basic foundation of fiscal expenditure on science and technology policy and its relationship with the construction of national innovation system from the perspective of meeting the common needs of society.The thesis reinterprets the relationship between government and enterprises in the market innovation platform.Public finance plays a central role in social comprehensive system and has internal comprehensive control function in the national innovation system.On the basis of the neo-market finance theory,the study tries to build "goal-subject-tool" analytical framework from three dimensions(including information flow,capital flow and policy flow)and provide a new theoretical basis and analytical tool for understanding the fundamental role of public finance in the national innovation system.On the basis of theoretical analysis,the study uses the R&D investment data of different entities in the national innovation system to carry out structural analysis,intuitively shows the main differences between China’s fiscal supporting system for science and technology and the innovation system of developed countries such as the United States,Germany,and Japan through the caliber of internationally comparable R&D funds.The study analyzes the correlation between fiscal support for science and technology and the input of different innovation entities to specifically study how public finance supports enterprises,research institutions and universities in China.The study of the scale and structure of China’s fiscal support for science and technology has found that the actual scale of China’s fiscal investment in research and development activities is greater than the scope of research and development fund statistics.China’s enterprises are not only the largest subject of scientific and technological research and development investment,but also the main body of implementation of major national scientific and technological projects,such as the national key research and development plan.The main ways of fiscal support for various innovation entities include science and technology funds allocation,fiscal subordinate management and scientific research plan and projects.The study tries to open the "black box" of the operation of fiscal science and technology budget,and interpret the distribution and operation mechanism of China’s fiscal science and technology funds between different governments and different science and technology departments through budgetary decomposition analysis and policy documents analysis.The study believes that the orientation of fiscal science and technology projects is the decisive factor in the responsibility of central and local science and technology expenditures.The information disclosure of China’s fiscal science and technology budget is incomplete.And there are about30% of the science and technology expenditures at the national,central and local aggregate levels have not been disclosed in detail.The statistics of China’s fiscal appropriations in science and technology cover fiscal expenditures in science and technology.But the usage of some fiscal appropriations in science and technology is vague.Therefore,this study combines fiscal appropriation in science and technology with other functional expenditures other than "science and technology expenditure" account.Then the study decomposes fiscal science and technology appropriations into human resources,intellectual property rights,resource exploration,agricultural technology,special projects in science and technology and science and technology infrastructure through budgetary decomposition analysis.It provides an example for the study and understanding of China’s fiscal support for science and technology and the complete structure of fiscal appropriations in science and technology.This study also applies the analytical framework of "goal-subject-tool" to the budgetary decomposition analysis of China’s fiscal science and technology and the institutional analysis of the U.S national innovation system.In the process of analyzing the fiscal budget in science and technology,the thesis establishes an analytical framework of target attributes and tool attributes through cross-department budget and cross-government expenditure classification.The target attributes of fiscal support for science and technology are divided into special funds,major strategies,personnel incentives and research achievement transformation.The tool attributes of fiscal support for science and technology are divided into personnel,institutions,facilities and projects according to the economic classification of expenditure and specific purposes of fiscal science and technology budget.The study further proves that there are three effective paths for fiscal support for science and technology,including supporting scientific and technological personnel,scientific and technological projects and scientific research institutions through empirical analysis by using provincial panel data.In the institutional analysis of the U.S national innovation system,its historical evolution is divided into five stages.The combination of different institutional factors and the characteristics of the U.S NIS in a specific historical stage are summarized based on the analysis of goal orientation,decision-making tools and subject relations.Through the comparative analysis of policies and NIS system,it is found that the mechanism between China and the United States in terms of fiscal support for science and technology is different,and the mechanism and experience of the U.S government in the collection and allocation of public research and development funds and the vertical coordination of fiscal science and technology budgets can be used as a reference for China.In general,the focus of this thesis is not on the longitudinal historical evolution rules and system characteristics of a country’s national innovation system,but on the analysis of the crosssectional characteristics of fiscal support for science and technology and its institutional system.In the conclusion part,the institutional mapping method adopted by OECD(1999)in the process of institutional analysis of innovation systems in different countries is used for reference.The structural diagram of China’s fiscal supporting system for science and technology is summarized and drawn,taking the current situation of China’s R&D investment and fiscal support for science and technology in 2019 as a horizontal cross-section to conduct a systematic study.The main structural analysis conclusions and the overall innovation resources alllcation are displayed in the map.The thesis finds that the role of China’s fiscal support for science and technology in the construction of the national innovation system has undergone a historical evolution,from the initial reliance on the national administrative force to allocate fiscal resources to ensure various scientific and technological undertakings.And gradually it has not only retained the institutional color in the division of authorities of government and relevant departments,but also established a diversified fiscal supporting and operation system for science and technology.However,considering the changes and articulation relationship of China’s fiscal budget accounts in science and technology,it is found that the current setting of China’s fiscal budget accounts in science and technology still adopts the "split" management method,and the science and technology projects belong to science and technology management departments and administrative departments.The allocation system of fiscal science and technology resources dominated by science and technology projects will lead to a more decentralized fiscal science and technology funds system.The reform of the budget management of China’s fiscal science and technology still lags behind the reform process of the science and technology plan.As a result,the current public information of China’s fiscal science and technology budget cannot completely depict the whole picture of China’s fiscal support for science and technology.In the policy analysis,the one-sided emphasis on the evaluation of the economic performance of innovation,while ignoring the fiscal support for basic research,which is the nature of meeting the common needs of society,has a direct consequence of seriously weakening the basic role of public finance in the national innovation system,thereby weakening the overall effectiveness of the national innovation system.In the corresponding part of the paper,the author put forward several fiscal supporting policy issues for science and technology and corresponding improvement suggestions that need to be paid attention to.First,public finance should guide different innovation entities to optimize the structure of R&D investment and provide diversified support for the realization of different goal orientations of the national innovation system.Second,public finance should support cooperation among innovation entities and strengthen top-level planning on the goal orientation of fiscal science and technology funds and projects to form the joint force of the national innovation system.Third,public finance should improve the fiscal science and technology budget management system,making an overall plan of fiscal science and technology funds utilization and avoiding fragmentation of fiscal support for science and technology.Fourth,the government should gradually establish an R&D fund allocation system of fiscal support for science and technology.Fifth,public finance should strengthen the incentive for scientific and technological personnel.At the same time,flexibly balance the relationship between scientific research incentive target and supervision target of fiscal science and technology budgets.