China Knows It Must Innovate. But Can It?

Posted: September 8, 2011 in Uncategorized
The country’s economy is booming, but the ecosystem for creativity has yet to emerge.

In 2003, Goldman Sachs issued a report predicting that by 2041 China would vault over the United States to become the world’s largest economy. Since then, China has been on a tear, with annual growth of 9 to 10%, compared to the U.S.’s recent anemic GDP, which has hovered around 2%. Check the shelves of any Walmart–or the country-of-origin label of most of the goods in your home– and you can see that China’s ambition to be the world’s low cost manufacturer is already a done deal.

Now, we hear, that China has similar goals with regard to those products’ design as well as their construction. In the past ten years, the Chinese have created more than 1,000 design programs, educating more than a million students. In addition, according to Clive Roux, CEO of IDSA (Industrial Design Society of America), who spent a year talking to over 80 people in government, education, and design consultancies, China is investing in hundreds of industrial design parks and cities throughout the country.

“China’s central government wants to shift the economy from being the world’s factory to a modern services economy, and it has declared that the country needs to promote industrial design to help it get there,” Roux says. Does this mean that it’s only a matter of time before America’s design industry goes the way of its manufacturing base? Designers: don’t delete that CAD software just yet.

The concept of user empathy is in its infancy in China.

Liu Jun, vice president and chief creative officer of Eegoo Cultural Industry Investment Co., Ltd, and one of the “50 Most Creative Individuals in China,” according to China’s New Ad magazine, has a far less rosy picture of the reality of the design industry in his country than the alarmist press might have us believe. “The reason the Chinese don’t have global companies is that we don’t have a global vision,” Liu told me in a recent conversation at the materials consultancy Material Connexion’s offices in New York. “We don’t see what world markets need.”

Liu says the reasons why his country’s designers lag the West are complex. For one thing, he says, the concept of user-centeredness, so central to Western design, is in its infancy in China. “Chinese designers only think about what pleasures them, not the customer,” he says. “It’s a huge problem.” In addition, the notion of sustainable design is equally embryonic. Liu cites a client who heads a top Chinese consumer electronics company who came back from a 20-day trip to the United States stunned by what he had seen.

“When he got back to Guangzhou, he realized how terrible the pollution was,” Liu says. “So he summoned all his department heads and insisted that they find a way to damage the environment less. ‘We are all on the same planet, but the U.S. air is so fresh!’ he told them.” Liu hopes to open 10 Material Connexion libraries and consultancies in China in the next year or so to introduce his countrymen to eco-friendly materials and Western-style design principles.

That’s a good beginning, but probably not enough, says Daniel Altman, director of thought leadership at Dalberg Global Development Advisors and author of Outrageous Fortunes, The Twelve Surprising Trends that Will Reshape the Global Economy.

While it’s likely that Chinese designers will catch up on the sustainability front, and will eventually master the art of targeting customer needs (as Haier, the big appliance manufacturer, has already done), the country’s ability to design and innovate will continue to be hampered by deep cultural forces that are less easy to change. “China still has corporate structures that are extremely hierarchical,” says Altman. “And there’s an intense respect for seniority that derives from Confuscian traditions that date back thousands of years. In addtion, the Communist party is a parallel structure in all these corporations, making it very difficult for young people to follow through on their best ideas.”

New ideas need to percolate up through so many layers of hierarchy that most won’t survive all the way to the top–or others will claim credit for them along the way, he says. In the U.S., talented but frustrated workers in similar situations have a handy escape hatch: they can quit and start their own companies. In China, that’s extremely hard to do. Indeed, China ranks 151st out of 181 countries in the World Bank’s annual survey of environments for entrepreneurs. “China has a long way to go before it will be anything like US in its ability to foster innovation or entrepreneurship,” says Altman.

The country’s ability to innovate will be hampered by deep cultural forces.

Stuart Leslie, president of the New York design firm 4Sight, whose company does a lot of business in the Far East, agrees. “We hyperventilate about a lot of things at 4Sight, but not about China,” he says. As replicators, the Chinese can’t be beat, he says, noting factories he’s toured that were crammed with machines knocked-off from those installed earlier by joint venture partners. A legal system that protects intellectual property is essential for an entrepreneurial culture to develop, he points out, and the Chinese government has been slow to adopt those reforms.

As innovators, Leslie also feels the country’s workforce is constrained by its lack of access to other cultures’ best work. “Creativity requires stimulation,” he says. “You have to fertilize it for it to blossom. Because China makes it difficult for other countries to sell their goods, Chinese designers aren’t being exposed to a wide range of options. The creatives who should be evolving, aren’t.”

Plus, he says, innovation can be messy, non-linear, and not polite. “Innovation is not the path of least resistance,” he says. “It often requires confrontation. Chinese workers have been taught not to confront, to go along as a group. Innovation needs the individual who thinks he’s smarter.”

All these things may change as more Chinese students are allowed to study in the West, or attend Western universities that have set up programs in China. But once these students get into the workforce, they may still find daunting cultural hurdles, says Altman. “These programs might help to bring creative thinking to young Chinese, but there’s still a question mark as to how much they’ll be able to follow through under the current Chinese system, where the best students are mostly groomed for top positions in hierarchical companies or the Communist party. Some of the most dissatisfied students are the ones who have studied outside China and then come back.”



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