Pages Navigation Menu

Invisible Innovation: The Blindness of the West to China’s Innovation Story

Invisible Innovation: The Blindness of the West to China’s Innovation Story

The Western countries have turned a blind eye towards the innovation capabilities of the People’s Republic of China. The reasons could be various, ranging from cultural barriers, IP thefts in China to language problems. An apt example of this complete denial is the recently released, highly publicized list released by Reuters-Thomson, bearing the names of the world’s topmost global innovators, on the basis of patent activity. Considering that China has witnessed major developments with regards to patent activity with substantial economic impact, one would expect multiple representations of Chinese entities in this list. However, the list did not feature even a single Chinese enterprise!

The list bears the names of 27 Japanese companies – four South Korean, three Swiss and one even from the Swiss neighbor of Liechtenstein, Hilti Corporation. However, there were none from Taiwan, Mainland China or any other prominent Asian nations. Although the list is based on patent activity, it does not rely on patent volumes alone. Instead, it considers other metrics that have been based on patent data. The list includes companies who invent on a particular scale and are contributing towards internationally acknowledged innovations. The innovations should be important enough to seek global protection.

The analysis seems fair. Therefore, Chinese innovations in the supply chain and manufacturing domain do not stand a chance. They do not fare in European and US granted patents. Furthermore, since most Chinese innovators file patents within the country, there isn’t any international impact as is warranted by the list. However, have they not tracked internationally active Chinese innovators? For example, recently, Huawei and ZTE emerged as two Chinese companies with five international patent applications! So, why have these not fared among the patent searches carried out by Thomson Reuters? After all, these firms have managed to emerge as global entities with a robust economic impact and huge volumes of patents.

Despite being ranked among the top international patent filers, did not seem enough for Huawei and ZTE to fare in the Thomson Reuters list. Although it could be argued that ZTE has made a relatively recent surge in the field of patents and their prior presence could be considered as insignificant, the same cannot be said about Huawei. It has 445 American patents to its credit from 2005 to 2010 which is greater than many companies in the list. And, in 2011, Huawei is, in fact, the number one patent filer internationally. Does that make them a sure-shot entrant in the next Thomson Reuters List? We sincerely hope so. How about Hilti AG from Liechtenstein? In their inclusion fair? They are into drills and building tools with 20,000 employees and 327 patents through 2005-2010. That’s below Huawei, but still competitive.

Now consider a non inclusion, Foxconn. They are the biggest manufacturers of electronic components worldwide, with over one million people working for them. They are the ones who make Apple’s iPhone and iPad! Much of its operations are in China. However, despite being the driving force behind Apple and emerging as a truly innovative partner, it was excluded from the list. Let’s consider patents. Well, Foxconn has more than 700 patents to their credit, filed between 2005 and 2010. While some of these are design patents, most are for technological innovations.

In fact, Foxconn is extensively spending on its patent systems in a bid to create high tech products that are far better than the existing ones. In this, they are way ahead of several Western companies who have made it to the list. Its innovations are widely represented through patents with an estate size that’s two times that of Hilti Corporation and a far stronger economic impact as well! However, Hilti still remains the chosen one.

Update on Foxconn: There are further updates on Foxconn worth considering here. Although the name ‘Foxconn’ has around 700 patents to its credit, many of the other patents filed by the company were under the name of “Hon Hai Precision Industry Co.” So, actually, what we are looking at here is turning a blind eye towards 5,872 patents. It clearly outscores stalwarts on the list like BASF and Brother Industries! What’s more? The total number of patents filed by Apple during this period is barely one thirds of the number filed by this invisible force that makes Apple what it is today.

The case of Huawei also deserves a special mention here! There is no denial of the innovative prowess of Huawei, although they do not publicize their efforts as much as Apple. However, they are a huge entity in the telecom domain with 100,000 employees and are responsible for connecting almost 33% cellular phones of the world. It is highly probable that Thomson Reuters refuses to acknowledge it on account of being a young entity. Although 50% of their total 445 patents were filed in 2010, Huawei still beats Hilti and others, for the given period, quite clearly. The only logic here could be that the evaluators have lesser time for citing the patents of Huawei because citations were included in the listing methodology. However, does that justify ignoring Huawei totally?

Although Thomson Reuters would always argue that their list was the result of methodologies and efforts that were developed and applied in full fairness, someone should have taken note of the important omissions of international innovators and filers, such as Foxconn and Huawei. However, Chinese innovations tend to remain nonexistent for Americans who still believe that they lead the field of innovation with China following suit by copying their efforts. This blind approach would cost American companies dearly in the near future. Very soon, US companies would be confronted by stiff patent barriers from Chinese innovators who would be owners of the most valuable IPs of the world. Therefore, the Western countries need to recognize that China would indeed be creating some of the most important global innovations of the future. Hence, this blind approach needs serious correction. In fact, Lenovo, the Chinese computer giant which happens to be the second largest producer of personal computers in the world, must have also been on the list!

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

The New Asia Innovation Team

404