I am honored to be invited to speak at the Economist Innovation Summit in Hong Kong on Sept. 6, 2016.
The Summit gathers entrepreneurs, venture capitalists, and industry luminaries to examine how Chinese firms have evolved from copycats to innovators, and what impact they will have on the rest of the world.
A couple of years ago, I wrote an article Why China Will Lead Innovation in Social and Mobile Commerce. Clearly, Chinese firms are innovating in many other fields as well. An Economist article indicates that:
In fields from gene editing to big-data analytics to 5G mobile telephony, Chinese experts are now among the world’s best. Sunway TaihuLight (pictured), a supercomputer made using only local computer chips, is five times as fast as the best American rival…. WeChat, a social-media and payments platform with 700m monthly active users, is more useful and fun than Facebook, Twitter and WhatsApp put together.
According to Douglas Fuller, an academic at Zhejiang University in Hangzhou (my hometown), the most innovative firms in China are hybrids of Chinese entrepreneurs with foreign investment. These Chinese entrepreneurs not only have access to foreign capital, but also to technological and management know-how. “These firms have no choice but to compete at the level of top global companies. Such firms also boast talent from Hong Kong or Taiwan, who blend knowledge of Chinese culture with global sophistication.”
Some questioned whether innovation by these firms can scale up. Can the Chinese market become the world’s innovation hotbed? My take is that innovation happens when there is a problem to be solved, or a customer’s pain needs to be relieved. There are plenty of problems and pain in the Chinese market, many of which do not exist in western markets, opening up tremendous opportunities for Chinese firms to innovate.
As George Yip and Bruce McKern, authors of China’s Next Strategic Advantage: From Imitation to Innovation, argue:
Consumers are quick to adopt new trends and are digital sophisticates. Unlike those in established markets, they are quite forgiving of mistakes, which lets firms experiment, fail and learn quickly. The domestic market, with both a super-rich elite and a big bottom of the pyramid, is a useful bellwether of global trends. And the huge diversity of the continental-scale country forces firms to adapt nimbly.
On this subject, my friend Shaun Rein has written a book The End of Copycat China. He argues that the dramatic rise of Chinese consumers presents a tremendous opportunity for local companies. They have to focus on innovation to appeal to these new consumers as they look for new brands and categories to spend their money on.
It will be interesting to hear what other speakers have to say at the Summit. I am really looking forward to it!