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Expert: China Looking Toward Economic Innovation

   Author  of  'Innovation  Nation'  says he believes Beijing realizes it
   needs to move towards being a creator of new products

   Ira Mellman 03 January 2011

   As its economy expands, the Chinese government has set out to push the
   country towards innovation.
   As  [1]VOA  reported last year, companies building or processing goods
   in  China  have  already  begun moving inland and away from the coasts
   because of rising wage demands and labor unrest.
   As  part  of  its  efforts  to  keep pace with new economic realities,
   Beijing  came  out  in  November  with a document called "The National
   Patent  Development Strategy." The document sets a goal of two million
   new patents by the year of 2015. 
   John  Kao, Chairman of the Institute for Large Scale Innovation in San
   Francisco,  believesĀ   China understands it is very important to move
   from  being  a  low  cost commodity factory for the world to being the
   creator of new products and experiences.
   The  author  of  Innovation  Nation and other books told VOA he thinks
   China  wonāt  copy  the  U.S.,  but rather follow its own path towards
   innovation.
   Kao:  I  think China realizes that it is very important for its future
   to move from being the low cost commodity manufacturer of a wide range
   of  goods.  China  is  today the factory for much of the world. It now
   wants to make a transition to higher value-added, which ultimately has
   to  do  with  innovation,  meaning creating new products, services and
   experiences that they can own.
   Q:  Do  you  think  China  is  going  to copy U.S. innovation, such as
   copying  Silicon  Valley, or do you think theyāre going to try to come
   up with a system of their own?
   Kao:  I  think  every  country, by definition, has its own approach to
   innovation.  Thereās  no such thing as a āone size fits allā approach.
   China is interesting because, on the one hand, innovation is very much
   a  part  of  the  five  year planning cycle which has its roots in the
   industrial  era  in  the heyday of the Communist Party following 1949.
   But  at  the  same  time,  the  forces  of  entrepreneurship have been
   thoroughly  unleashed. You have clouds of entrepreneurs pursuing their
   own  individual  idea  of  business  bliss,  so  to  speak.  So  China
   represents a curious hybrid between a top down state driven innovation
   agenda on the one hand and the traditional independent entrepreneurial
   ethos  on the other. Thereās a famous Chinese saying that āItās better
   to be the head of a small chicken than the tail of a big cow.ā Thereās
   a  curious  blending  of streams of culture and politics and mentality
   into what the Chinese system is today.
   Q: There is a fear, as Iām sure youāve heard here in the United States
   of  China taking over just about everything from the United States. Is
   that valid in this case?
   Kao:  There is no doubt that the United States, which was alone on the
   world  stage  of  innovation  in  the post World War II era now has to
   share  that  stage  with  many countries. To the extent that China has
   money  and talent and willpower and scale and many other advantages it
   is  going to be a big player on the global scene. But America has some
   elements that the rest of the world is short on.
   For  instance,  we are the most tolerant society when it comes to big,
   new  ideas,  when  it  comes  to  uncertainty. [Also] when it comes to
   tolerating   the  risks  of  entrepreneurial  activity  and  also  [a]
   forgiveness  of  failure,  which  is  a hallmark in virtually no other
   country  that  Iām  aware of around the world. Most countries, even in
   Western  Europe  have  significant  penalties  for failure. We all can
   imagine being an entrepreneur and starting a business but there are no
   guarantees.
   Q:  So  I take it that you think that China is willing to take on that
   possibility of failure.
   Kao:  There  are  many  seasoned entrepreneurs in China who understand
   that  there  are no guarantees. What is less clear is the state driven
   innovation sector and how it will look at failure.

References

   Visible links
   1. http://www.voanews.com/english/news/Strikes-Highlight-Chinas-Growing-Industrial-Unrest-97081019.html

   Hidden links:
   2. http://www.nytimes.com/2011/01/02/business/02unboxed.html?_r=1&emc=eta1

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