Encouraging creativity and Innovation in China
Creativity and innovation in China is a hot-topic at present, as discussion moves away from the notion of China as simply a manufacturer of other people’s goods – ‘Made in China’ – towards the concept of ‘Designed in China’.
A recent BBC series focused on the industries where innovation is occurring andaddressed many of the challenges China faces in developing its innovation economy. Recently, I also attended a private session at the World Economic Forum’s Annual Meeting of the New Champions in Tianjin, the so-called ‘Summer Davos’, on Investing in Creativity in China, which offered some insights into the developments happening in the creative industries.
China is going through one of the world’s biggest mass migration movements, with millions moving into the cities from the rural hinterlands of the poorer western regions, bringing with it a more vibrant, dynamic and entrepreneurial culture, particularly in the cities. People from widely different backgrounds are being brought together in the rapidly evolving Eastern seaboard cities, such as Beijing, Shanghai and Shenzhen, exposed to Western ideas and able to take advantage of the myriad work and entertainment opportunities.
The environment is ripe for entrepreneurship and the huge economic growth is an attractive prospect for investors too. This period of great change has been compared with the creative fervor of the Industrial Revolution in Europe and is bringing in its wake new opportunities to leapfrog Western industries in this quest for development.
Technology is one significant area where we are seeing innovation, with mobile technology in particular leading the way. Three of the five biggest mobile phone companies in the world – Huawei, Lenovo and ZTE, are from China, the latter of which ranks as one of the most innovative companies in the world, having registered 50,000 patents last year alone.
China has the potential to leapfrog the West in many respects, developing creative products that appeal to both domestic and international markets. Xiaomi, for example, is taking the mobile phone industry by storm. Although it has many detractors who say it is simply copying many of Apple’s existing innovations, it seems to be offering a highly disruptive innovation in terms of its business model. As a recent article in HBR outlines, Xiaomi keeps it’s models on the market far longer than Apple does, relying on the decreasing cost of components over a two year period to recoup profits, rather than Apple’s model of getting its profits with the introduction of each model and then needing to develop a new model to maintain profits. Innovation is thus in terms of disruptive business models, not just new products and patents.