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Letting Innovation Flourish: How Will China Succeed?

Letting Innovation Flourish:  How Will China Succeed?

All around China, the spirit of innovation is gaining traction as the next big trend for the nation.  With a five-year plan already in place, China’s government seems determined to change how their nations innovations are viewed.  Instead of made in China, discovered in China seems to be the catchphrase that’s taking over as China continues its shift from manufacturing base to innovation hub of the eastern world.

 

Significant progress has been made in recent years to shift China’s strategy from manufacturing to innovation. And while patent filings in China are increasing, it becomes clear upon closer inspection that the majority of patent filings are for small process improvements instead of new innovations.  While patent filings are important to foster innovation, many believe that China’s traditional culture may hold back real innovation.

 

With the majority of innovations, they tend to be created in environments that allow collaboration, teamwork, and creativity to flourish.  In Western cultures, different business units work together to present ideas.  In China, each business until has a clear goal and instead of working together, there is a culture of aloofness between units.  It is not usually encouraged that different business units work together, especially when it comes to stepping outside of assigned roles.  This is not to say that innovation cannot be achieved in China – but it tends to happen within individual groups – instead of across a variety of different business units that are working together.  Many times, competition can be too overwhelming between departments, encouraging a culture that narrows the vision and imagination of employees.

 

For innovation to flourish, China must change its approach to the way it does business.  Market research tends to be one of the last developed business areas and is often under budgeted, if it’s even done at all. As manufacturing has been the basis of China’s economy for more than thirty years, little attention has been paid for company’s to understand their customer’s needs and wants.  Most often, innovation in China has consisted of taking an already existing product and improving it or adding to it in some way, or creating a less expensive version of it for the marketplace.

 

Fostering innovation will require Chinese entrepreneurs to take risks, something that is not easily accomplished in the Chinese culture.  The culture largely consists of recognizing and rewarding obedience to the status quo while shaming those who choose to find their own way of thinking and doing things.  This culture has shown itself to influence the business management style of many Chinese companies.  Most often, individuals are rarely recognized in public for their achievements with companies preferring to praise teams while keeping individual achievements private or low-key.  Western companies have become very adaptable at praising individuals while also focusing on business unit accomplishments as necessary.  Chinese companies would do well to take a cue from the Western world when it comes to creating an environment where innovation can flourish.

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