New Innovation in China Book Offers Inadequate Solution

I read a tweet from @erlanovation yesterday that intrigued me: Interesting discussion of #innovation in China: Moving China Up the Value Chain

The New York Times article interviews two authors, Mr. Breznitz and Mr. Murphree, about their new book “run of The Red Queen” argue that China should focus on it’s strength in process innovation rather than aim to compete with Europe and the U.S. on full-blown innovation.

They certainly bring some good points to the argument, like fixing the financial system to help companies have the necessary capital to innovate or changing the role of government to enable innovation rather than try to control it. But their raiment is short-term focused.

China will need to fix the short-term road blocks in order to move innovation forward, for sure. That should not be an argument for saying China should not pursue full blown-innovation. In having worked there and following its development, I have realized that China has always forged its own path to its goals. It needs to, not only because it is vastly different from any other developed country but also out of pride.

China needs to move up the “value-chain” and pursuing a short-term goal like incremental process innovation will not support the millions of new graduates that come out of it’s universities each year. China needs to deal with a vast population that is either happily employed or that could revolt. China needs to modernize the hinterlands fast or deal with population migration that will wreck havoc throughout the country.

Pursuing incremental innovation won’t solve these incredibly complex problems.

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