The future of the Chinese economy lies in innovation, and everyone in China knows it. But that hasn’t always been true. Innovation didn’t drive the manufacturing miracle that has unfolded in China over the past half century, during which some 700 million people have been raised—or lifted themselves—out of desperate poverty. Instead the driver has in large part been what might be called brute-force imitation. Relying on a seemingly limitless supply of cheap labor, provided by the hundreds of millions of ambitious workers born during the postwar baby boom, China devoted itself prodigiously to the production of other countries’ innovations. The effort enabled a country that missed the Industrial Revolution to absorb the world’s most modern manufacturing advances in just a decade or two. Fittingly, China earned a reputation as a global copycat.
China’s New Innovation Advantage
Long considered a global copycat, China is now home to many of the fastest start-ups to reach a $1 billion valuation globally. Whatever has propelled Chinese companies to the top, the metrics we use to evaluate innovation have missed it. The author argues that China today has a resource that no other country has: hundreds of millions of people who have lived through unprecedented amounts of change—and who, consequently, can adopt and adapt to innovations at a speed and scale unmatched anywhere else on earth. Those hyper-adaptive and hyper-adoptive consumers are what make China so globally competitive today. But competition with the Chinese should not be considered a zero-sum game. Foreign companies would do well to seek to learn from China’s newly powerful example.
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