China's Innovation Barriers

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For these reasons and more, CLSA China Macro Strategist Andy Rothman last August said that China "has a long history of being inventive, although not innovative," i.e., that there have not been major breakthroughs "that resulted in commercialization of products or services based on that novel technology."

There's another, newer twist to the innovation equation in China, the generation of single children. In a report, Rothman quotes Lin Yifu, director of the China Center for Economic Research at Peking University: "China lost its early technological lead because it did not make the shift from the experience-based process of invention to the experiment-cum-science-based innovation, while Europe did so."

Breaking Out of the Box

In an earlier article I wrote about the ivory tower bias of Chinese higher education, with the assumption that a university education means you never have to get your hands dirty. This has led to automotive engineers who have never driven a car and coal mine engineers who have never been in a mine (see BusinessWeek.com, 7/31/06, "Chindia's Workforce Worries").

An ongoing revolution in Chinese education will change this as well. University administrators are complaining that the one-child generation, which now dominates in universities, is demanding different facilities and services.

And professors point out that students no longer respect authority or do what they are told. This may create havoc as this generation enters the workforce, raising new questions about teamwork, for example—but it bodes well for developing wacky people who think in different, innovative ways.

Today about half of all the science and technology PhDs awarded in the U.S. go to Chinese students. Many of these talented Chinese join U.S. companies and are highly creative, whereas their peers who stay in the Chinese system often get lost in the "average" there.

Will China be an innovative society by 2010? The system suggests not. But there may be hope that individuals can make a difference.

Nandani Lynton is faculty at the Euro-China Centre for Leadership and Responsibility at the China Europe International Business School in Shanghai, ranked Nr. 8 globally by the FT in 2009. With more than two decades of international experience in the private and public sectors, Lynton focuses on developing effective leadership in global organizations. She has lived and worked in India, the U.S., and Germany. Based in China since 1993, Lynton built and ran an organizational consulting firm before joining Thunderbird School of Global Management in 2004, switching to CEIBS in 2008.