Innovation in Low-Tech Industries - An Example of the Food Industry in China

Abstract: The importance of investing in low-tech industries has been underestimated for a long time because of its low R&D input to output ratio. But in reality, so-called high-tech industries only account for 3 per cent of value added in the OECD, while low-tech industries, such as the food industry, indeed do not lack the opportunities of benefiting from innovation. The driving forces of innovation have been constructed and separately examined in a series of former studies. However, there is rare study discussing about cumulative effect of those factors or further reflecting the factors on empirical world. Shedding light on the low-tech industries, the common sectors with largest labor employment, could be a possible way of finding new sources for developing countries to promote economic growth. This thesis focuses on filling in the gap between theory and reality. It first concludes critical factors that influence innovation from micro and macro level and then assesses the driving forces under a systematic review method in order to understand the relation between cumulative effects of innovation drivers and realistic innovation activities. Through decomposing the innovation activities in the Chinese food industry, the result shows that the dynamic interaction between different factors indeed drives the vitality of the innovation activities in the Chinese food industry.