One of the essential ingredients for developing and sustaining a high-performance innovation culture is the deployment and effective utilization of scientific and engineering talent. The next five chapters provide a comprehensive and detailed examination of China's scientific and technical talent pool, including a stocktaking of the current science and technology (S&T) workforce, a thorough analysis of higher education in S&T, a discussion about how S&T talent in China is being utilized, an examination of the “brain drain” phenomenon, and a forecast of the demand and supply for scientists and engineers over the next five years. Taken together, these five chapters present a broad, integrated picture of China's S&T talent situation and its international connections. The analysis is built on field interviews as well as in-depth inspection, scrutiny, and analysis as well as the interpretation of a large volume of primary talent-related data from Chinese sources. It is this overall set of data and the accompanying analysis that forms the core of this book.

This chapter starts with a discussion of terminology and focuses on the application of the internationally used definition – human resources in science and technology (HRST) – and its variations in the Chinese context. Particular attention is paid to the latter – the terminological variations that occur in the Chinese situation – to lay a clear foundation for the subsequent discussion about and analysis of the case of the People's Republic of China.

Although it is clear that the “supply” side of the science and technology (S&T) talent equation is an important component of a nation's innovation capacity and potential, it also is the case that sheer numbers of scientists and engineers is not an adequate proxy for innovative performance and economic contribution. The effective use and deployment of the S&T talent pool is the major factor which truly shapes, as well as yields, meaningful innovative outcomes. Having described the characteristics of China's human resources in science and technology (HRST) and the educational pipeline through which China's S&T workforce has been produced, the purpose of this chapter is to highlight and evaluate how effectively the Chinese S&T workforce has been utilized.

The chapter first lays out how intellectuals, of whom scientists and engineers are an important component, as a social class have evolved in contemporary China. This analysis is followed by a review of the core political and modernization issues involved in the Chinese Communist Party (CCP) policies toward intellectuals in general, and scientists and engineers in particular, since 1949; the attitudes and actions of the CCP have been the major determinant of how Chinese scientists and engineers are treated both politically and economically. The various components of the professional lives and careers of China's high-end talent pool – from job assignments and promotion to career mobility and performance rewards – are discussed.

This book has focused on providing a detailed stocktaking of the science and technology (S&T) talent contingent in China, accompanied by an in-depth analysis of the potential role of this evolving talent pool in Chinese current and future economic growth and technological development. As discussed in earlier chapters, during the reform and open-door era, China has gradually changed its development strategy from one heavily dependent on natural resources and capital investment to one more focussed on knowledge and talent as the key drivers of enhanced economic performance. The Chinese leadership has exhibited a pervasive sense of urgency about the need to catch up with the developed economies and has recognized that solving the country's talent issue is a crucial ingredient in terms of China's ability to cope with an increasingly competitive international environment, build a comprehensive well-off and harmonious society, and, more importantly, consolidate and fortify the ruling base of the Chinese Communist Party (CCP). It further understands that the successful creation and growth of a knowledge-driven economy requires a greatly enhanced talent pool composed of high-quality scientists, engineers, and other professionals.

In fulfilling the policies of “rejuvenating the nation with science, technology, and education” (kejiao xingguo) and “empowering the nation through talent” (rencai qiangguo), China literally has turned out millions of college students, especially in S&T, and more recently in management, to meet the new innovation challenges.

This chapter extends our analysis of China's scientific and technical talent by examining its distribution, deployment, and utilization in key emerging technological fields such as information and telecommunications technology (ICT) as well as biotechnology and nanotechnology – the so-called science-based technologies. The development and advancement of national capabilities in these technological fields has become a high-level priority for the Chinese leadership, as, collectively, they are viewed increasingly as critical engines for the nation's current and future economic growth and national security. Most important, these high-technology fields have witnessed a significant transformation in the structure and size of their workforce and steadily increased the demand for more high-quality talent.

In this chapter we describe and analyze the science and technology (S&T) workforce in high-technology manufacturing, software, life sciences and biotechnology, and nanotechnology. We also discuss the emerging face of talent in the field of management and business administration, an area closely related to technological process since many Chinese managers have technical backgrounds. China's foray into global markets and knowledge networks will stimulate even further the demand for competent, experienced management talent. And, achieving desired improvements inside China's research organizations also will necessitate upgrading the performance of an entire cadre of research and development (R&D) and project managers. The chapter takes stock of the current situation and examines the readiness of talent in these fields. In doing so, we try to provide greater insights into the talent dynamics in priority areas where the Chinese government is making major investments.

In the span of less than three decades, China has evolved from a peripheral player to become the most potent engine in the global economy. Along with its rapid economic progress, and the many improvements in the quality of life for large numbers of the Chinese population, a variety of indicators suggest that China's science and technology (S&T) capabilities also are on a sharply rising trajectory. Since the early 1990s, spending on S&T by the Chinese government has been increasing at a rate approximately twice that of overall economic growth. In 2007, China spent RMB (reminbi) 366 billion (US $50 billion) on research and development (R&D), or 1.49 percent of its increasing gross domestic product (GDP), highest among countries with similar economic development level, though the percentage is still lower than that of most of the major developed economies (NBS, 2008). Chinese institutions of higher education have been turning out an increasing number of well-prepared graduates. In 2006, China graduated some 159,000 students with masters and doctoral degrees in science and technology, on top of 1.34 million engineering undergraduates as well as 197,000 science undergraduates (NBS, 2007: 794). Unequivocally, this represents the world's highest output in terms of overall numbers.

In recent years, there also has been a steady increase in the number of international papers published by Chinese scientists.

The rapid increase of China's human resources in science and technology (HRST), described and analyzed in Chapter 3, is a product of the nation's rapid, continuous, and sustained economic growth during the post-Mao economic reform and open-door era. The country's growth imperative has fuelled the demand for larger and larger numbers of high-quality technical and managerial personnel. This has placed an increasing burden on the higher education system, which has been asked to provide a larger volume of capable graduates to assume crucial positions throughout the economy and society.

In recent years, higher education has become much more desirable and also more affordable to most Chinese, who recognized that investment in higher education can bring long-term benefits in terms of rising levels of compensation and greater social status. As the utility of obtaining a college degree or beyond has become more and more apparent, and taking into account the one-child family planning policies across most of China, there has been a steady acceleration in the number of students seeking higher education in China. Between 1991 and 2006, China's regular institutions of higher education turned out a total of 21 million undergraduates and 1.25 million graduate students, including 193,000 doctorates (see Table 2.1). The total enrollment in higher education, including those in various non-traditional higher education programs – from adult institutions of higher education, radio and TV universities, internet-based education, to self-learning – reached 25 million by the end of 2006.

The previous chapters have surveyed the prevailing situation regarding China's scientific and technical workforce and the higher education system that is responsible for producing the next generation of scientists and engineers. In particular, we have argued that the expansion of university enrollments since 1999 has created an increasing supply of graduates, perhaps even oversupply, in science and technology (S&T) and other disciplines. And, we also have shown that, at the same time, despite admissions having increased, both foreign-invested and domestic employers in China continue to face a growing challenge of finding appropriate candidates for employment with not only adequate educational credentials but also the right skills, competencies, and experience for the highly skilled jobs that they increasingly need to fill. In other words, China continues to face a “talent shortage” in terms of the gap between supply and demand. This kind of mismatch derives primarily from the imbalance between quality and quantity, between the specific skills required for jobs available and what the job candidates learned in school, and between localities that have open positions and the willingness of S&T personnel to relocate, among other issues.

From the perspective of available statistics and data, however, it is one thing to pinpoint the existence of China's talent problem, but quite another to quantify the actual size of the gap between supply and demand. In this chapter, we highlight and analyze the drivers behind both supply and demand for scientists and engineers in China over the next few years.

Ironically, even as the numbers concerning China's production of new scientists and engineers have continued to rise in a dramatic fashion, there have been conflicting perceptions about the actual talent situation in China. On one hand, as noted in the Introduction, as spending on science and technology (S&T), research and development (R&D), and education has been growing at an accelerated rate, not surprisingly, large increases in the size of the country's overall talent pool have occurred as well. At present, China's overall S&T talent pool is the largest in the world, and the number of scientists and engineers in China is the world's second largest. Moreover, the evolving pipeline seemingly remains full as Chinese universities graduate the world's largest number of students. On the other hand, complaints continue to proliferate from multiple segments of the economy and society – from Chinese government officials to enterprise chief executive officers (CEOs), including the country heads of most multinational corporations (MNCs) that operate in China – about the problems that plague the local talent pool: demand seems to be exceeding supply; quality problems are rampant; and the talent already in place remains difficult to manage and retain.

Indeed, China faces a serious talent challenge as it seeks to sustain domestic economic growth and technological advance. The active members of its professional community are young when compared with their counterparts in the West – many being fresh out of school – so that they lack the concomitant experience of their peers abroad, especially in many leadership positions in the Chinese research system.

It has become a well established fact that a nation's economic growth depends heavily upon its overall talent base. The size, quality, and utilization of a country's human resources determine, to a great degree, its prevailing level of technological sophistication as well as its future technological trajectory. Under the broad umbrella of human resources, the role of scientific and technical personnel probably is the most critical; accordingly, the term – “human resources in science and technology” (HRST) – has become accepted internationally as one of the key metrics for assessing a nation's real and potential technological strength(s). In the aftermath of the Cultural Revolution (1966–1976) and the debilitating impact of that movement on China's innovative capabilities, Chinese leaders have come to understand and appreciate the need to develop and harness a large pool of highly skilled human resources to promote, support, and sustain the country's technological progress, economic growth, social development, and national security. It is this drive to create and deploy a well-trained, highly competent scientific and technical talent pool that stands out not only as one of the hallmarks of China's modernization program, but, in all likelihood, also the key variable that will determine the nature of China's competitive positioning in the coming years.

This book examines the contribution – real and potential – of China's talent pool to the enhancement of that nation's science and technology (S&T) capabilities.

Throughout this book, we have relied upon a vast array of statistics and related data concerning China's human resources in science and technology (HRST), as well as Chinese science and technology (S&T) and education activities. The bulk of our research has focused on the use of primary statistical data from Chinese government sources, mainly because there are not many, if any, alternative reliable sources of such data in this field and also because we wanted to develop a picture of the S&T human resources situation in China that is similar to the one used by Chinese policymakers and scholars. In relying heavily on these Chinese sources, we recognized from the start that there remains a huge gap between China and developed countries, especially Europe and the USA, in collecting and reporting statistics. A host of cautions was certainly warranted as we used these data, even after scrubbing for inconsistencies and associated problems. Indeed, as we have pointed out in various sections of the book, problems with these data raise some serious questions about the ability of Chinese policymakers to develop appropriate policies and incentives given their dependence on data that sometimes pose more questions than answers.

These issues and minefields acknowledged, however, we also believe it is just as important to recognize the tremendous progress that the People's Republic of China has made in developing a more uniform, coherent, and systematic series of statistics concerning domestic S&T activities and outcomes (Gao et al., 2007; Schaaper, 2004).

This chapter examines China's human resources in science and technology (HRST) from the perspective of flow – the outflow of Chinese overseas as students and scholars (liuxuesheng). Studying overseas (liuxue) is not a new phenomenon in China, but it is the reform and open-door policy initiated in the late 1970s that has offered Chinese more education and training opportunities on a global scale. The expansion of China's science and technology (S&T) and educational exchanges with the outside world has opened up a broad array of new, substantial opportunities for study abroad through both government sponsorship and private channels. The significance of overseas study is reflected not only in the overall number of liuxuesheng, but in the critical role of those who have returned to China after finishing their studies. The returnees (haigui, literally meaning “sea turtles”), especially those who have returned in recent years to take advantage of a booming economy and the government's favorable policies toward them, are strategically important to China's rise as a global economic and technological power, and even to China's political evolution to some extent as well (Li, 2004, 2005a). China has also experienced a “brain circulation,” in which many ethnic Chinese professionals and scientists residing overseas help their native country by acting as information conduits and collaborative partners in new business ventures (Saxenian, 2002, 2006).