The Pains and Joys of Innovation in ChinaBy
After seven years of working with intellectual property and innovation in China, I’ve seen some of the ups and downs as well as the gross misunderstanding of Chinese innovation and IP in the West. I’d like to briefly summarize what I’ve seen.
First, when it comes to innovation in science and industry, graduates of Chinese universities are not the drones and clueless copyists that many in the West seem to think they are. Yes, they have been through intense educational processes that emphasize memorizing tons of material and respecting what teachers say, but this hardly means they cannot think for themselves or innovate. In fact, the mastery of material that they have obtained gives many of them the skills needed to apply sound principles in creative ways. he truth about innovation is that in many cases, skills and knowledge matter, and the more you have at your fingertips, the more you can do with it.
But yes, in an innovation session, a facilitator is likely to find a lot of people looking down at the ground and not contributing. This can often be due to having the wrong people in the room and not providing the right setting and incentives. If the boss is there, people might be afraid of showing him or her up or afraid of saying something risky and possibly wrong. So get the boss out of the room. Then turn your event into a competition. Have incentives for contributing. It can be as simple as “no bathroom break until we have 10 ideas in the board” or prizes for the team with the best concepts. But once it becomes clear that there are reasons to contribute and little risk in contributing, you’ll face the problem I see most now: getting the group to slow down and limit their responses. “I just needed 5 concepts, not 30, but thank you!” A friendly competition brings out the best in many Chinese innovators, and I’ve been deeply impressed with their creativity and insights.
Innovation is very healthy in China. China is leading the world in innovation in many targeted areas, greatly outpacing the West in areas such as nanotechnology, green energy, AI, etc. You haven’t seen the power of great smartphone apps until you’ve seen how people are able to use WeChat over here for so many things: paying utility bills, ordering and paying for meal, participating in free videoconferences, sending gifts, finding when the next bus is coming to your stop, reserving seats at a movie theater, easily forming groups to share text, photos, and videos for an upcoming or current event, etc.
China has wonderful brands, cool business models, increasing quality and safety, brilliant entrepreneurs, and a booming market in many fields. It’s a dazzling and beautiful place with great hope for the future.
On the other hand, there are some great “fatigue factors” that make things tough on some innovators and entrepreneurs. The biggest issue may be the uncertainty in regulations. Here in Shanghai, for example, thousands of entrepreneurs who have spent years building their businesses in small shops along many classic streets of Shanghai suddenly found that all the shops in certain areas would be torn down to beautify the street or convert it to high-end hotels or something. Many times all that happened was that a flourishing market was eviscerated and sterile walls were left lining a street that suddenly was missing the flavor it had nurtured for decades. The purging of small businesses has been painful to watch and has also been frustrating to local residents who can no longer get the goods and services that used to be around the corner. Now they have to travel to go to larger stores that are less convenient and often more expensive.
Last week, I was thrilled to learn that the Central Committee of the Communist Party in Beijing sent out a very wise directive to cities in China urging them to be cautious about unnecessarily closing shops and markets on their streets. It noted that this process is removing important economic zones that convey a crucial part of the flavor of China. Amen! I grieve for the thousands who lost their jobs over these painful sweeps, and hope healthy local businesses and markets can continue to thrive for the good of both the entrepreneurs and customers like me. How I miss some of those little shops and businesses that have been such a precious part of my experience in Shanghai.
Unpredictable rule changes can hurt innovators in many ways. Some innovators just get a business going only to learn that a new rule now forbids the import or sale of a product they brought to China. Others learn that an area that was zoned for industry is suddenly no longer open to their business and perhaps an entire factory has to move. These things happen in the West as well, but the process here is less visible and harder to cope with in many cases, in my opinion, so those creating businesses here need to be both flexible and diligent in understanding the needs and plans of government so they can foresee problems or adapt to them quickly. I’m not saying it’s overwhelmingly difficult, but innovators and entrepreneurs do need to be prepared watchful, and always have a plan B. That’s good advice for any nation, of course.
The challenges from rule changes may be most severe for large companies, where a policy change can affect huge areas of one’s business or involve formidable costs. On the other hand, large companies often benefit greatly from relationships with other entities that can give them great advantages in innovation. And fortunately, the government is often understanding of the impact that rule changes can bring, such as the requirement to move a factory, and will often offer incentives that take way much of the pain and make the change possible.
Part of the good news is that officials at all levels in the country are increasingly recognizing the importance of aiding and not hindering innovation and entrepreneurs, and so in spite of some of the risks of rule changes, there is a general climate of encouragement and help for innovation. This can benefit large and small companies. It helps to be involved, to unite with good organizations to stay informed and build increasing influence, and to also be close to your community, making sure that your business is involved in bettering the community and lifting others. Such organizations and innovators who aren’t just looking out for themselves but recognize the greater good and seek to serve can have lasting impact on this nation.
Innovation is real in China and is becoming stronger and more important every year. It is a great place to pursue innovation and a great place to develop and enforce meaningful IP. More on the IP issues later. For now, give China a chance and look beyond the stereotypes that are often projected as if they were facts. China has changed greatly in the past two or three decades. Come see what’s really happening over here!