China, Becoming an Innovation Super Power?

Credit: http://www.aboutastra.org/latest_news/05-16-2011-china-innovation.asp

Recently, there have been a lot of discussion about China becoming the next innovation super power. A recent HBR blog “Get Ready for China’s Innovation Juggernaut” alerts the readers that China is making huge strides to transform themselves as an innovative nation.  It uses examples that more than 100 million registered private enterprises in China; the Chinese firm Huawei was third among all companies in number of patents filed last year; and media conversation these days centers on when, not whether, China will produce a success story like Steve Jobs’. For the first time in 2009, four Chinese companies are listed in the 50 Most Innovative Companies ranking by Bloomberg Businessweek, while American companies on the list decreased from 35 in 2007 to 22 in 2009. All signs are pointing to the fact that China is going to become next innovation power house.

On the other hand, there are doubts existing about Chinese innovation capability. An earlier NPR report Plagiarism Plague Hinders China’s Scientific Ambition pointed out that 31 percent of papers with unreasonable copying and plagiarism. Blame lies in part with traditional Chinese culture, as many scientists believe, which values rote memorization and repetition and holds that copying a teacher’s work is a way of learning.

No one can deny the fact that Chinese government is pushing innovation with strong incentive policies. From WIPO data source, China is the only major country with increased Intellectual Property (IP) application in last two years when other countries experienced IP application decreasing because of financial crisis. We can argue that IP application only means quantity, not quality. However, we also see China has a dramatic increase in IP granted. Below graph illustrates Top 10 countries of IP granted according to WIPO data from 1995 to 2009.

Top 10 Countries with IP Granted (Source: WIPO)

Japan has been the leader of IP granted, followed by the United States. Korea surpassed Germany becoming the number third since 2004. However, China passed Korea in 2009 while Korea experiences a significant drop in IP granted since 2007. According to the NPR report, China is forecast to become the world’s leading innovator in 2011, overtaking the United States and Japan in number of patent filings.

There is no doubt that China is very good in enhancing current technology. However, the question lies whether China can create “disruptive” technologies or services, which can lead the market and build the brands, such as Apple, Facebook and twitter. Government policy motivates the number of IP application or grants, but perhaps majority of those innovation are incremental improvement and development, instead of breakthrough creations which can drive much more value for the business and the society.

Thus, come back to my question: will China become next innovation super power? To my knowledge, Chinese are still learning how to be more creative and more innovative. If China wants to become the most innovative nation, the government policy should drive a scientific culture which emphasizes quality, instead of quantity, with an innovative environment embracing patience, persistence and precision.

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