Can China Be Innovative?

Even though I know that I will get crap from many Chinese colleagues for saying this, I don't believe that China is a culture that fosters innovation relative to other fast developing countries like India. A recent blog post over on Sourcing Innovation attempts to debunk the myth that China is not innovative by citing the case of IBM's experience and willingness to move their global procurement headquarter to the Mainland (from North America). But there will always be outliers like IBM -- a company that depends on specialized suppliers in China which are now hard to find elsewhere. In general, I'd argue, China's culture encourages hard-work and getting ahead, but the two are not synonymous with innovation -- and can in fact run counter to it.

What innovation at the core of Chinese business culture today? First and foremost, innovation requires conflict and dissent. It requires that individuals not only have the education and training to go against the mold, but that they are in fact encouraged to do so. Yes, China's culture does not strongly discourage failure (like a Korea, where a business or personal bankruptcy marks you with a Scarlet "B" for life), but it's still hard to go against the popular grain in China. Just as we don't hear any internal voices from China dissenting when it comes to a current political/geographic issue, the Chinese still all too often speak with one voice from a business standpoint as well in a rigid, hierarchical manner. This must change for China to become more innovative on the world business stage.

Second, innovative countries place a tremendous emphasis on the power of an elite university system to churn out ideas at the intersection of industry and the public sector. China has a long way to go from building the university / government / private sector R&D bridge -- especially in comparison not only to the United States, but its Asian Tiger neighbor to the West, India. In this regard, China must realize that the university / innovation link is not a question of quantity, but of quality -- in other words, more degrees granted will have little bearing on overall innovation unless these recent graduates take advantage of a research-driven environment.

What do you think? I'm sure a certain "All Roads" colleague will take me to task for suggesting what I just posited -- and maybe he'll be right -- but I just don't see China as the innovator that others make it out to be.

- Jason Busch

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