The opportunities for China’s innovation economy
It seems to me that most commentators in the West view China through the prism of sales opportunities; focusing on the increases in market size, personal wealth, consumer demand. Or of environmental consequence; looking at the environmental impact of China’s rapid growth.
Of course there is truth in both these points, lots of it, and it’s easy to write about. But I think that looking at China solely as a home for western products, or simply as a polluter only tells half the story and misses the big opportunity: Innovation powered sustainable growth.
I don’t think anyone would deny that China has some growing pains, and certainly some environmental issues (trust me, I’ve been in Beijing when visibility is down to 400m and your eyes sting from the pollution), but on the ground, working day-in and day-out with Chinese businesses, you get the feeling that things are starting to change for the better as problems are acknowledged and solutions sought. This is giving birth to a sizeable and profitable innovation economy.
Leading the way in this innovation economy are (perhaps unsurprisingly) some of the world’s best-known brands with a strong presence in China such as IBM, General Electric (a client of ours), Siemens and P&G, along with rising local companies such as solar power firm, Suntech Power.
Working independently, or alongside state-owned firms, these firms and those like them are creating the next generation of products, systems and solutions in areas as diverse as city planning, energy supply, healthcare, nutrition and transport to help create and power sustainable (financial and environmental, that is) growth.
It is apparent that by being ‘in-market’, and by innovating against the problems faced by China as it proceeds on its fast and relentless march forward, each innovation created to help manage its growth locally has a very natural, and potentially profitable, home globally.
Whether it be handheld medical imaging equipment, remote diagnostics that connects rural areas with city-based doctors and specialists, advanced energy extraction or creation techniques, ‘smart city’ planning, fuel efficient engines or accessible and nutritious consumer goods, it is clear that India, Africa and almost every other emerging market shares similar needs.
But seeing this as an opportunity is reliant on acknowledging one point.
Namely, that the world is evolving, and as countries grow they will want to increase their say on the global stage, and to increase the quality of life of their citizens, irrespective of what the West may say or want.
Growth waits for no man - the Copenhagen climate summit was a great example of this. The key is to find and promote ways to achieve growth with minimal negative impact.
Once this point is acknowledged, the opportunity couldn’t be clearer. Rather than a mass-market home for western designed B2B or consumer goods, China – with the right support and encouragement - has the opportunity to become an innovation centre for worldwide ‘sustainable growth’ in the 21st Century.
Through hard lessons learned as a large emerging economy, China can support – along with its global partners – an innovation market that can help up-and-coming economies manage the impact of growth on the environment, and potentially open up new markets and revenue streams for those on-board.
Only this week Bill Gates, in his annual letter issued a rallying cry for innovation as the key to improving the world. People always assume the West will pick up this mantle. Who knows, perhaps China has the answers.