Can China innovate – you bet it can!

This article from Strategy & Business of Booz & Co. (“China’s Long Road to Innovation”) suggests that China will find it very hard to evolve from a global manufacturer to a global innovator.

“Ultimately, Du and other Chinese experts question whether Chinese enterprises and companies can ever innovate technologically. One issue is culture. In Western and Japanese companies, researchers are allowed to develop ideas rather than being told which ideas to pick, and they are allowed to fail. These conditions require a delicate balance between a company’s top management and its technical talent. But in Chinese companies, which tend to be very centralized, individual initiative and risk-taking are rarely rewarded. Chen also argues that Communist Party control of the economy is a disincentive for innovation. “The party wants all the good ideas to be its ideas,” he says.”

So What?

Is the Chinese problem deeply rooted or can at least private firms create the necessary space and culture to innovate as we do in the West? Or will Chinese firms find an alternative way to innovate that leverages their strengths and minimises their weaknesses, just as their Japanese and Korean neighbours appear to have done? Who says the Western approach to innovation is THE way rather than one of many, an approach adapted to the ego-centric culture of the West?

It is so easy to forget that many innovations we now take for granted originated from huge government initiated and funded post-war programs, from NASA moon landing and nuclear power to jet aircraft and telecoms. I for one will not dismiss the Chinese as destined to fail at innovation, especially in a world where original research is ever more scare and under-funded, no more so than in the USA.

China has formidable potential to innovate whole new industries just as the US has done before it. The problems stated in the article are only tactical and just as Chinese entrepreneurs now have the space to make money (unimagined 20 years ago) so Chinese researchers can have the envronment and motivation to innovate – and probably very quickly once the problem is fully recognised.

I would suggest the US and Europe should be seeking to re-invent themselves to compete rather than continuing to look at China through a lens that only distorts rather than reveals and assumes THEIR way is THE way.