China’s Innovation Benefits the World

时间:2022-10-15 04:49:03

THE strategy of innovation-driven develop- ment implemented in China is expected to present opportunities to transform and update the nation’s economy, while also improving quality and effectiveness, yet also giving a fillip to the sluggish world economy.

China’s Innovation from Global Perspectives

In The China Effect on Global Innovation, McKinsey Global Institute (MGI) evaluates the overall innovation capacity of China’s enterprises. Identifying four archetypes of innovation, namely, science-based, engineeringbased, customer-focused, and efficiency-driven, the research measures Chinese companies’ innovation levels by reviewing the share of global revenue and profi t captured by Chinese companies in certain industries.

The MGI analysis indicates that Chinese companies show the greatest strengths in markets that require customer-focused innovation. Driven by considerable sales in the domestic market, Chinese fi rms across sectors such as household appliances (in which they account for 39 percent of global revenue), Internet software (15 percent), and consumer electronics (10 percent) take the lead among their global peers in respect of customerfocused innovation.

Furthermore, efficiency-driven innovation increases the value added to Chinese products and consolidates the country’s position as a preeminent global manufacturing hub. However, progress in Chinese engineering-based innovation is moving at different speeds in different markets. While several industries, such as high-speed rail, wind power and telecommunications equipment, have seen rapid growth, innovation capacity in such sectors as autos and medical devices still lags. China has yet to catch up with developed countries in science-based innovation.

In general, the environment and capacity for innovation constantly advance as the country progresses economically. China ranked 29th among 141 economies around the world in the Global Innovation Index 2015C Effective Innovation Policies for Development, copublished by Cornell University, INSEAD, and the World Intellectual Property Organization, displaying a narrower gap with developed countries and outperforming its de- veloping peers.

Today, our life is influenced by science and technology in every conceivable way. Scientifi c and technological innovation and development have greatly improved people’s lives. In China, a major developing country with a large population, technological innovation is pivotal in changing people’s lives. From the 1950s to the 1970s, bicycles, sewing machines, watches and radios were the most sought-after commodities in China. During this same period in developed countries, however, demand for consumer goods had already advanced to a level beyond mere contentment with relatively simple, yet durable goods. Today, as technologies and innovation maintain their advance in China, high-end consumer goods such as computers, smart phones and automobiles have gained in popularity. Statistics from the United Nations Development Program indicate that saturation by mobile phones and the Internet had reached 92.3 percent and 49.3 percent respectively by 2015. In a sense, science, technology, and innovation are making Chinese people’s lives ever better.

The improvement in China’s innovation capacity greatly benefits from the country’s enormous market, abundant labor resources, and open economic policy, as well as the emerging trend whereby commercialization of inventions is becoming swift, while costs are comparatively low. Such advantages may also facilitate investment by overseas companies in China, so to speed up commercialization of the fruits of their innovation, while also beefing up their innovative capacity and competitiveness in the market.

Inexhaustible Driving Force of a Vast Consumer Market

China’s consumer market C already enormous and ever on the increase C generates endless impetus for enterprise innovation, since booming consumer demand impels companies to commercialize the fruits of their innovation and scale up their manufacturing processes. The domestic consumer market is expanding in China and displaying the momentum of a rising demand in the wake of economic development and consequent in-creases in disposable income. China has become a huge consumer market for smart phones, with 750 million users C 4.2 times as many as in the U.S., and there are 650 million Internet users in China C 420 million more than in the U.S. China is moreover the world’s largest consumer market for PCs, air conditioners, fridges, microwave ovens, and household washing machines. Relying on this large market, Chinese companies such as Baidu, Alibaba, Tencent, and Haier have rapidly become leaders, not only in the local market, but also in the world, in the fields of, respectively, Internet searches, e-commerce, Internet games, and household appliances. This thriving market demand in turn also benefits overseas investors in China and stimulates their growth. For example, confronted by falling demand for small household appliances in developed countries, Phillips adjusted its strategy to relocate the production headquarters of a vacuum cleaner, juicer and electric rice cooker to China. Its sales of small household appliances have attained remarkable achievements in the robust Chinese market, with an increase of 56 percent in 2014 over 2012.

Rich Labor Resources, Lower Innovation Costs

Manpower is a decisive factor in manufacturing and creation. Despite the potential challenges posed by an aging population, China remains a country with an abundance of labor. At present, a total of 150 million industrial workers are at work in China’s manufacturing sector, outnumbering the figures for the U.S. (14 million), Japan(nine million), and South Korea (four million). In addition, a considerable number of high-level talents offer intellectual support for enterprises to engage in innovation, while saving on labor costs. In 2013, 28,700 persons in China obtained their doctorate in science or engineeringC a figure that stands at the world’s apex.

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