China’s Hu met Microsoft’s Gates at Bill’s 40,000 square foot home (is that right?) and I am thinking what must Hu be thinking? But that’s another story. The big historical question for me is whether China can make the leap from low-cost producer to actual innovator. The latest 5-Year Plan (yes, they still do 5-Year Plans in China) puts innovation at the center of government investment and planning. That’s a good thing.
What is also interesting is how senior executives around the world see China in terms of innovation. I am still mining the insights of the BusinessWeek-BCG Most Innotive Companies survey and find this slide. So China is virutally tied with India as a destination of R&D money from global corporations—and just slightly behind Europe. Imagine that.
One slide not up on the site asks the purpose of the R&D spending. So the senior execs said that, for the most part, they still see the U.S./Canada as the place for idea generation, product design and product development but look to China and India only for product development. I take this to mean lower-cost, commodity-type design and development activities.
The big challenge for China now is to make the great leap to innovation. Some companies, such as Lenovo, are already there. Most others are not. Lenovo, by the way, is an official sponsor of the 2008 Olympics in China, the 21st century “coming out” party for the nation. As such, it offers cute little mascot dolls that are collected by Chinese kids. The big buzz in China is that no one knocks off these Olympic dolls. No one. Beijing just doesn’t allow it. So if the government can stop the knockoff of this little piece of IP, why can’t it stop……. Think about it.
One final thing. Lenovo just announced it will load its its PCs and laptops with real Microsoft software. That’s a big step in stopping piracy of software in China where most folks think nothing of it.
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