Innovation Is a Long and Bumpy Road for China

China may well be an up and coming global leader in some aspects, but are its major companies ready to tackle the “ify” process of innovation? Creativity should not be confused with innovation although it should be rewarded. The Chinese have been very successful at driving down production costs, and at implementing borrowed (okay, stolen) ideas that work in some less developed parts of the country. This is particularly exemplified with the Chery Automobile Company. Designs from the General Motors Corporation (an out of court decision settled the issue) were pirated, re-packaged and sold in rural areas of China where GM’s joint partnership with the Shanghai Automotive Industry Corporation (SAIC) had not yet established jurisdiction.

According to Michael Dunne, managing director of China for J.D. Power Commercial Consulting:

“The automotive sector is an area of particular focus for the Chinese government, which is anxious to create auto companies that can compete globally. The holy grail of the auto industry is designing and engineering your own products. Unless you can do that, it’s hard to see how you can be competitive.”

Can China innovate technologically? China, unlike other countries, has missed a vital step in its growth as a modern nation by allowing its most important technology sectors to be dominated by foreign companies. Despite the success of its space programs and reputation as the land where paper and gunpowder came from, Chinese companies are not involved at all in research, which is the mother of all innovation.

There is hope for the flow of know-how back to China, and one important factor is hai gui, which translates literally into “sea turtles,” and refers to the turtles who return to the beach where they were born to lay eggs. The metaphor concerns native Chinese who are returning to their homeland after having worked in technology firms in the United States.

Chinese experts question whether Chinese enterprises and companies will ever be able to innovate technologically. Culture is an important consideration in this regard as Chinese companies rarely reward individual initiative and risk-taking. The government is attempting to overcome barriers to innovation with a 15-year plan for science and technology as the first step toward China’s goal of being a world leader in the field by 2050.

Will China succeed as a global innovator? The answer may lie in the truth of an old Chinese axiom that states:

“The journey of a thousand miles begins with a single step.”