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Insights China

Three Questions for John Kao, Author of Innovation Nation

China's influence on global innovation strategies

John Kao, author of the book Innovation Nation, is an advisor to major corporations and government administrators around the world. The founder of the Institute for Large Scale Innovation, Kao regularly hosts summits that bring together the chief innovation officers of the “I-20” (“I” stands for “innovation”) countries, which range from Botswana to China to the United States. He’s also a former professor at Harvard Business School, an accomplished producer of theater and films, is a medical doctor, and a respected jazz musician who was once Frank Zappa’s protégé. We caught up with Kao to get his thoughts on China’s influence on global innovation.

Would you say that China is an “innovation nation”?

My definition of an “innovation nation” is one that has mobilized all of its innovation assets toward a world-improving goal. China has an explicit innovation agenda and leadership structure. The country is pouring a lot of money—staggering public funds—toward national technology and engineering initiatives. It will be exciting to see what develops in terms of new solutions in energy, transportation, and materials. The aim of the Chinese push for national science and technology agendas is clearly toward pushing the horizon. What will be interesting to see is the narrative that evolves in terms of China’s place on the world innovation stage.

It’s important to remember for the world to remember that China has historical and cultural assets to influence innovation going forward. Throughout the centuries, the pendulum has swung back and forth in China, in terms of its embrace of Westernization. I’ve been meeting people in China who are skeptical of the West today, rather than are attracted to it. That’s not just because the Little Emperors have decided that the U.S. isn’t cool. This sentiment is deeply historical: the word for China literally means “Middle Kingdom,” or the center of the world. We’ll be seeing more indigenous innovation coming out of China. In a sense, among younger Chinese, there could be a sense of looking backward—toward China’s deep history of innovation—that will inspire original ideas for today’s marketplace.

What’s the biggest misconception about Chinese innovation?

Well, the biggest mistake that most people have about understanding innovation in China is to believe that the strategies in use today will reflect the future. It’s tempting to analyze China in such a complacent way.

Yes, there had been suppression politically in the relatively recent past, but 20-somethings who are enrolling in design schools are certainly exploring anti-authority ideas. Also, there are policies in place to encourage innovation in China now.

Of course there are also the global misconceptions about the role of “copying” in China. Think about how innovation is practiced: it’s important to ingest ideas that exist, and then build from there. It is very difficult to “start from scratch.” In this sense, we could re-cast what we think of as Chinese-style “copying.” Rather than think of them as copycats and try to pursue harsh intellectual property laws, it might be fascinating to see, over the next decade, what fresh ideas will result from Chinese corporations and entrepreneurs ingesting current global products and improving on them.

What is the most creative company in China?

China doesn’t yet have an iconic brand that could be considered the “most creative company.” So far, that hasn’t surfaced because the main Chinese business model has been primarily about exploiting manufacturing costs to create efficiency and value. There’s also a model of emulating and improving successful businesses via localization, and that’s been true from Internet service to packaged goods to innovation on a social scale. There’s a sense of incremental disruption, though. And now that there are other areas of the world that are using the low-cost advantage in business, such as in Southeast Asia, China will move to a disruptive business model. Once again, the next decade will be the acid test to see what Chinese company emerges as a global brand along the lines of Apple or Nike.


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