Abstract:  Innovation have been the central approach for economic transition in China. Essentially, innovation approach is a system transformation process, which bears typical path dependency characteristics. This paper aims to give some suggestions on directions, approaches of future innovation, and also the formulation of government policy base on the review on Chinese firms’ innovation history in the past 40 years. First, this paper offered an overall judgment on characteristics of innovation experience in the past 40 years. Second, this paper distinguished the past 40 years into 4 stages and summarized crucial concerns, achievements, and policy directions at each stage. Third, this paper offered new implications for future innovation trends and also academic research.This research argues that: first, although innovation capability has been largely improved, there is still big gap to compete with international leader firms. Especially, Chinese firms need to improve technological capability in core technological fields. China is standing on the turning point from factor-driven economy to innovation-driven economy, because core technology innovation is still not the main reason of Chinese firms’ business success. China should rely on unique institutional to build endogenous innovation ecosystem to support core innovation.Second, the past 40 years covers 4 typical stages. At the first stage from 1978 to 1998, effort to reduce shortage was the central subject. At this stage, the main innovation activities centered on reforms of institutions and policy in planned economy to improve production efficiency. There was little academic research in China. Chinese researchers aimed to learn innovation methods and theories from foreign researchers.At the second stage from 1989 to 1998, absorption and improvement was the main target. Firms relied on cost advantage to exchange for investments and technologies from advanced countries. China started to promote high-technology innovation and speed institutional innovation step by step. In academic research aspect, innovation got its central research status along with scaling of market oriented innovation. Especially, form innovation emerged from previous informal investigations on innovation activities.At the third stage from 1999 to 2008, intensive attention was attached to exploratory innovation for catching up. At this stage, along with the permission of WOT and also the fit reform in financing fields, the openness of market inspired firms to invest more in innovation to do business in international market. A great number of firms moved from low value chain to high value chain based on innovation capability. Along with this progress, previous innovation mode based on absorptive process turned out be too weak to support competitive advantage of Chinese firms. To build solid competitive advantage, firms set urgent demand on endogenous innovation. Therefore, endogenous innovation became the hottest topic in academic research field. At the fourth stage from 2009 to 2018, we name it as stage of innovation accelerating and breakthrough.At this stage, core technology innovation attracted heavy attention from the whole society. More importantly, the interaction of business model innovation and technological innovation guides our eyes to innovation ecosystem. Academic research attached more attention to innovation ecosystem, the interaction of business model innovation and technological innovation, and the approach for core technological breakthrough. More importantly, digital innovation as innovation activity has attracted attention from researchers at all over the world.Finally, based on review on innovation history in the past 40 years, future innovation activities in China will bear new characteristics in new times: combination of various innovations enabled by innovation ecosystem. The innovation scope will turn from one signal product to the whole innovation ecosystem. Innovation target will turn from physical product to the interaction between physical product and information. The innovation will bear multiple and customized value dimensions. In new times, firms should rely on innovation ecosystem to promote innovation performance. In term of innovation directions, firms should rely on domestic demand to foster new industry. We need to build an inimitable innovation ecosystem embedded in unique Chinese culture and government-enterprise relationship. Centering on new innovation demand, the future academic research should attach more attention to the inherent unique characteristics of innovation in China, and also the theory on innovation ecosystem construction and evolution.

Key words: technological innovation, organizational innovation, innovation stage