University of California Institute on Global Conflict and Cooperation

China is developing a defense innovation system (DIS) as part of a broader effort to construct a national innovation system (NIS) that incorporates a system-of-systems approach. Modeled on China’s commercial-sector economic development zones and investment strategies, the DIS is focused on enhancing integration and interaction among key defense industry actors, institutions, industry sectors, and regions, both domestic and international. Although serious obstacles remain to realizing an effective DIS, China is laying the foundation for a dual-use DIS that employs both top-down development strategies and fosters greater bottom-up, market-driven, innovation dynamics.