The Effect of Incremental Innovation and Disruptive Innovation on the Sustainable Development of Manufacturing in China

Abstract

Innovation is an important driver for the promotion of manufacturing, and governmental intervention could significantly affect the development of innovation and manufacturing in China. The purpose of this article was to reveal different modes of innovation regarding the development of manufacturing in China. A theoretical model was used to analyze the effects of incremental innovation and disruptive innovation on the sustainable development of the manufacturing industry from the aspect of the industry’s ability to survive under governmental intervention; a corresponding empirical analysis was performed from perspectives of the whole nation and various regions using a panel data model. The results demonstrated that the promotion of the incremental innovation ability was not beneficial to enhance the ability to survive and that the effect of disruptive innovation was the opposite from the aspect of national level. The influencing directions of various innovation modes in the developed region and the underdeveloped region coincided generally with those at the national level but achieved larger effects individually, with stronger effects occurring in the underdeveloped region compared with those in the developed region, while opposite effects occurring in the region with medium development.