Policy design and intervention in the innovation diffusion process: The case of China’s communication sector

SummaryThe innovation diffusion process in China has varied impacts on different players in the industrial system, which can in turn either facilitate or impede theeffects of innovation diffusion. Bringing not only growth possibilities to the newcomers but also high risks to the established players, the diffusion process might encounter with huge resistance in a highly regulated system, which is also called market failure. Based on intensive case studies in China’s communication sector, the paper argues that the structures of the innovation supply system will greatly influence the innovation diffusion process. Policy-makers must leverage policy design and intervention to achieve expected strategic objectives. Therefore, proper policy intervention could become the trigger to launch and facilitate diffusion of emerging innovations in such a large developing country as China.

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