I think the answer is, it doesn't. It requires coordinating bodies, industrial base, and resources. Not ability to vote or unfettered media. See PRC recently moving up value chains, topping science and innovation indexes in western publications, controlled for quality. That's PRC goign from fraction of high skilled talent in 2010, to near parity in in last few years after boosting tertiary education. If you buy into the innovation+freedom argument and also PRC is less free argument, then innovation is negatively correlated to free thought. Regardless, whatever system PRC has in place, it's been driving innovation in last few years with less talent than west, and soon more talent, with more experience. Absurdly more. Meanwhile everyone else is adopting PRC industrial policy, or rather re-adopting indy policy that PRC copied from Asian Tigers who copied from US. And ultimately even if you presume leading edge innovation requires the "right" culture, PRC is still good at replicating and commercializing. Hence whatever lead an innovation an "innovative" culture produces, PRC can still replicate and commercialize and at scale faster and cheaper and reduce market share / R&D of those companies on global market.