China has been very successful at attracting low-wage manufacturing production, but our study finds that China is not exploiting its talent pool to the fullest. We suggest that looser migration policies and greater investment in research and development could give China’s professional talent pool opportunities to collaborate and innovate, creating the knowledge economy that the nation is striving to achieve.

Authors
Richard Florida, Martin Prosperity Institute, Rotman School of Management
Charlotta Mellander, Prosperity Institute of Scandinavia, Jönköping International Business School
Haifeng Qian, School of Public Policy, George Mason University

Working Paper: Released October 2008

Subjects: Regional Development, China, Talent, The Creative Class

Related Projects: Creative Industries and the Creative Economy, Jurisdictional Advantage, Global Creativity, Prosperity in the Creative Age

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Abstract
The relationships between talent, technology and regional development have been widely examined in the advanced economies. While there is a general consensus as to the important role talent plays in regional development, debate has emerged on two key issues. The first involves the efficacy of educational (i.e. human capital) versus occupational (i.e. the creative class) measures of talent; the second involves the factors affecting the distribution of talent. In this study, we have used structural equation models and path analysis. We employed both educational and occupational measures of talent to examine the relationships between talent, technology and regional economic performance in China, and to isolate the effects of tolerance, differing levels of consumer service amenities, and the location of universities on the distribution of talent. Contrary to the findings of empirical studies on the developed economies, we found the relationships between the distribution of talent and technology and between the distribution of talent and regional economic performance in China to be weak. We found the presence of universities – a factor highly influenced by government policy – and the actual stock of talent to be strongly related. We also found that tolerance, as measured by the “Hukou index,” plays an important role in the distribution of talent and technology in China.