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India Vs. China in Innovation: The UN Weighs in.


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March 14, 2006

India Vs. China in Innovation: The UN Weighs in.

Bruce Nussbaum

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.

05:32 PM

India vs. China in Innovation

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Actually we should not worry much about this country's innovations. There have been plenty of activities going on. Maybe we ought to rethink about the purpose and efficient model of innovation, and get away with traditional unilateral invented-here type of R&D and promote Collaboration and Development (C&D) based innovation framework, the new paradigm. So innovation productivity can be achieved and value-maximized through a flat-world talent pool by all countries, China, India and US alike.

Posted by: David Gong at March 15, 2006 05:38 PM

There is really no comparison: In R&D, China beats India. All the stats prove this, too. Patents, citation analysis, university rankings, the list goes on. There's also the argument that the best Indians go to (or, are already in) America, whereas many good Chinese scientists are going back to China (the expression is "sea turtles," "hai gui" in Mandarin) -- although I'd argue that America still has the best Chinese. It reminds me of the von Braun scene in the movie "The Right Stuff" where he proclaims that "our Germans are better than their (Russia's) Germans."

But as somebody who is a VP of one of China's largest outsourcing firms, I have to admit that in practical terms, especially in the IT sector, India is way ahead of China. That's really not such a bad thing: As Indian outsourcing firms move up the food chain, so do their rates. Besides, there's a strong incentive for American firms to use IT outsourcing resources in China, namely, access to the domestic (in China) market.

Anyway, I cover this turf in my AlwaysOn Network "Letter from China" and Sand Hill Group columns.

Posted by: David Scott Lewis at March 15, 2006 09:03 PM

According to me, China's value is "Product Cycle";

India's value is in "Knowledge Cycle".

Product Cycle consists of the following TOP-DOWN tiers:

Market+R&D

Product+R&D

Applications

which are all about building technology and know-how.

This is infractructure heavy.

Knowledge Cycle consist of the following BOTTOM-up tiers:

Delivering for specialized Domains

Building Design Skills

Locating right talent

Here the Talent is infrastrucure!

There is a distinct "GAP" between the two.

The innovation actually lies in knowledge mining.

-Vish

Posted by: A.K. Vishwanath. at March 16, 2006 04:22 AM

This does not make sense. All the companies mentioned are having Indian R&D centre as well.

Raja

Posted by: Malapati Raja Sekhar at March 23, 2006 03:27 AM

It is argued generally that India has better innovaive CAPACITY. Certainly it's spending on R/D is less than China's, thus leading to lower University rankings(which are based on research publications which require high funding). However I work for IBM in the US, and I can tell you that high-tech US companies prefer Indian IIT grads over any other non-US educational institute primarily due to their innovative capacity. Another thing that impresses me about India more is its highly successfull and indigenous space program, which has achieved technological parity with China on less than half the funds. In IBM we do get more patents out of China, however in tech patents are a dime a dozen. The patents coming out of India tend to represent greater leaps in technological capacity compare to China.

Posted by: Binyamin at April 26, 2006 04:51 AM

the consensus here seems obvious

to indians, it's india hands down

everybody else...it's china!

ha ha ha ha

Posted by: lim at May 30, 2006 03:46 AM

Anyone who thinks India is more "innovative" than China should go read the Knowledge Assessment Methodology Test done by World bank. According to World Bank, China scores 4.74 in Innovative Index, while India scores only 3.72. And the gap between China and India is also widening.

Go to http://web.worldbank.org/WBSITE/EXTERNAL/WBI/WBIPROGRAMS/KFDLP/EXTUNIKAM/0,,contentMDK:20589293~menuPK:1453865~pagePK:64168445~piPK:64168309~theSitePK:1414721,00.html

And go read the article http://www.rediff.com/money/2006/jul/17china.htm

Posted by: Andrew at July 23, 2006 11:47 PM

We can talk about Chinese innovation when China get its first REAL private Limited company, till then, lets talk to the government....

Posted by: Aman at September 12, 2006 10:18 AM

Very interesting article.

http://apunkadesh.blogspot.com

Posted by: Apun Ka Desh at September 14, 2006 12:33 PM

Going by facts,40% of silicon valley start ups are owned or jointly owned by indians.

It's just the lure of cheap labour and low production costs that are driving companies to china,thats only perk up their balance sheets.

The chinese are absolutely no match to the innovative poweress of the indian's(I guess we have more noble prize winners than the chinese)

Posted by: prashant at December 26, 2006 08:56 AM


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