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Innovation, Chinese Style

In the recent blog post titled ‘Innovation, Chinese style’ by Kathrin Hille, the author talks about how Chinese companies have been known to be the bulk manufacturer but recently they introduced new and innovative ideas in their local businesses. Is China really innovating?

A question that is often asked is – Is China really on the path of innovation? China is known to be a low cost manufacturer but time has come for her to prove to be a creator of things through innovation. She has to emerge as the innovative power.

McKinsey has raised a different issue. The question is not whether China is innovating or not; it is the non-understanding by the western world that is making this issue so confusing. Chinese are following innovating ways those are different from the developed world. The McKinsey’s Shanghai office is going to publish a report in which the extra ordinary things of innovation being performed by Chinese companies shall be made public.

The report points out the weak areas of a typical Chinese enterprise in which the multinationals are much stronger. These areas include corporate cultures that do not support thinking of taking risks and internal collaboration nonexistence etc.

The Chinese do not follow the theory of perfecting through continuous research. They rather follow the direct short path of trying out things in the market and this is known as innovation through commercialization. The change is rapid and competition is hard. But, at the same time this report argues that lot of cutting edge ideas for the consumers have been adopted by the Chinese companies those are invisible to the multinationals. The report gives the example of China’s biggest internet company Tencent’s, which uses its instant messenger QQ in an innovative way.

The biggest advantage to the local companies is the local huge consumer market where they show the innovations and do not have special incentive to try these innovations abroad. However, some companies, like Chinese semiconductor industry is facing troubles locally and they are going to look outwards. This may create challenges for the foreigners in near future. The chip makers believe that china is learning fast from her past mistakes and efforts are on to consolidate the industry in specified centers.

It is also argued that big Chinese companies like ZTE, Huawei and Lenovo are ready to give much more clout in designing chip platforms at home. And the fact that electronic products do not require most advanced chips allows Chinese chipmakers to export while remaining within the international / foreign laws of import. Foreign companies are aware of these facts and the future effects but, they cannot do anything except to keep complaining about China’s efforts to transfer the technology.

Note: The preceding is a summary of an article found though our research, and is provided here with editorial comment for members only. Please see the full article at the following link for full original content. http://blogs.ft.com

The New Asia Innovation Team

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