Transforming Technological Research, Developments and Related Investments into Value: How Does This Work in China? – by Claudio Petti

Electronics factory in Shenzhen (Wikicommons)

Bringing technologies to the market and thereby creating profits, high-qualified jobs and industrial upgrading is one of the means by which China can fuel its brand new growth model based on innovation and sustainability. But how does Chinese technological entrepreneurship differ from that in the West?

Booming domestic demand, national research system reforms, strong incentives towards technological innovation and low operating costs have created huge opportunities, spaces and a favourable environment for a spur in technological entrepreneurship in China – an invitation that Chinese entrepreneurs have not failed to seize.

In all sectors, from well-known information technology, telecommunications and the Internet (where homegrown Chinese enterprises such as Lenovo, Huawei, Baidu and Tencent not only ousted their powerful rivals from the domestic market, but are also becoming formidable challengers abroad), to new materials and renewable energies – the creation of new technological enterprises is relentless. The same goes for the value generated, with a more and more relevant quota becoming the innovative component. A quick look to last decade’s statistics gives an idea of the dimension of this rush; the number of high-tech enterprises tripled, with an average of 2,000 new enterprises a year over the whole decade. Over the same period, these enterprises’ revenues and profits increased almost six times, whereas exports registered a quasi-nine times increase, reaching one third of the overall value of exports. The breakneck growth of patent applications (from 2,000 to more than 70,000), sales revenues from new products (which reached almost a quarter of overall industry revenues), and the massive investments in R&D and New Product Development (which have increased almost nine-fold since the Year 2000), all speak for the increasing relevance of the innovation component.

Though remarkable and impressive the progress and changes experienced by China are, most of the topics related to technology and innovation are usually dismissed in the West as being mere assembly of technologies developed elsewhere, if not just pure imitation. In China, closer observers use different terms such as ‘market-oriented innovation’, ‘secondary business model innovation’ or even oxymorons such as ‘creative’ or ‘innovative’ imitation, to mean a slightly different thing from imitation. Essentially, this is the improvement and adaptation of existing technologies and products as a response or a solution to specific local market needs or opportunities; either through lowering costs (but not necessarily performance), or customizing product features – but all with a steady responsiveness to the market.

Whatever the perspectives embraced, they all seem to lead to the need to have a better understanding of how technological entrepreneurship works in China, and above all, to two main intertwined questions:

  1. Whether Chinese technological entrepreneurship differs from the one we know and learn in the West, and if so, to what extent?
  2. Provided substantial differences exist, are these just temporary effects of the transitional state of China, or conversely, the result of deeply engrained and durable characteristics of the Chinese context?

Technological Entrepreneurship in China. How Does it Work?‘ provides interested international readers with an insider view of the phenomenon, in order to help them build their own understanding and find their own answers to the questions above.  Case studies are discussed from the perspectives of both Chinese authors (working in Chinese Government agencies, research institutions and universities) as well as European researchers.

Anyone who wishes to question, debate and network directly with the authors of the book might be interested to attend a presentation of the book at the Italian Institute of Culture in Beijing on 12th September 2012.

Claudio Petti is an Assistant Professor at the Department of Engineering for Innovation at the University of Salento (Italy) and the author of Technological Entrepreneurship in China: How Does it Work? and Cases in Technological Entrepreneurship: Converting Ideas to Value. Truly passionate about ancient and contemporary China, he recently seized the opportunity of spending two years in Guangzhou, where he engaged in the development of collaborative research on technology innovation management and entrepreneurship.

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