The debate over India vs. China, who is most innovative, was addressed in the Wall Street Journal yesterday, March 13, in an article, “Low Costs, Plentiful Talent Make China a Global Magnet for R&D,” that is written off a new report by the United Nations Conference on Trade and Development (sorry, I couldn’t link to the UN site to get the report or link in the WSJ site to the story).
When it comes to innovation, China wins big over India in this UN report. Companies such as Motorola, P&G, IBM and many others are opening and expanding R&D operations inside China. Companies are shifting their focus from the internal market to using China-generated innovation for the global economy. The UN report says that China is spending 1.5% of its gross domestic product on R&D invesment, twice that of India. The US spends 2.7%. China plans to boost R&D spending by 20% in 2006 to get its total figure up to 2% of gdp by 2010.
OK. This sure undermines the argument that China is to Walmart as India is to Target made by Grant McCracken. Check out his take on the UN report and the debate now.
As for me, the jury is still out. No doubt great Chinese companies such as Lenovo are global innovators. Just look at their latest round of laptops. Motorola is doing brilliant work at its Chinese labs. But measures of R&D spending are not measures of innovation. Indeed. companies such as P&G are reducing their spending on R&D and increasing their innovation productivity. An innovative culture requires more than money.
I am rooting for BOTH India and China in the innovation sweepstakes. The country I am really worried about is—mine.
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