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Can China Innovate? Is Failure An Option?

Posted in China Business, Events

BBC did an hour-long show today with Nassim Nicholas Taleb, author of the groundbreaking book, The Black Swan: The Impact of the Highly Improbable.   Taleb’s thesis is that we humans tend to be “blind” to major (a/k/a black swan) events.

During the show, an audience member who announced that he was from Vietnam, asked Taleb whether there are any cultural differences regarding black swan events.  Taleb and the announcer then did a fairly short riff on how failure is a “badge of honor” in Silicon Valley and on the West Coast of the United States, but is viewed far more negatively on the East Coast of the United States and in England, and even more to be avoided “in Asia.”

I am going to be speaking at the Plastics News Executive Forum in Tampa in late February on protecting your IP in China, and as a bit of a prelude to that, I am participating next week in a free online webinar that asks “Can China Innovate?”  Now I do not think that I would be giving too much away by saying that my answer to that question is, yes, of course it can, because it has.  Rather, the question is what changes must we see in China for it to increase its innovation so as to even come close to the United States as an innovation powerhouse?

The bulk of my talk is going to focus on the legal aspects of China IP that need to change/improve for China to increase its innovation, but the BBC show really did get me to thinking about the cultural aspects as well.  Does China have a risk averse culture?  I don’t think that is true overall, especially since it is extremely entrepreneurial.  Yet, it also strikes me that far too many of China’s best and brightest view a government job as their highest and best use/opportunity and governments are just not going to be the font of much innovation.

So does Mainland China have a culture well suited for innovation?

You tell me.

What do you think?

 

  • Vigarano

    “Yet, it also strikes me that far too many of China’s best and brightest view a government job as their highest and best use/opportunity and governments are just not going to be the font of much innovation.”

    This discussion could be book-length, and we don’t have time for THAT, but I thought I would point out the huge importance (glorious importance) in China of getting rich. A government job in China is not only the steady paycheck sinecure it is many other places (though it is that, certainly), but also an opportunity to get gloriously rich through influence peddling and other corrupt acts. Perhaps the best opportunity for getting gloriously rich. Any Chinese person who doesn’t think so simply isn’t paying attention. Plus, a government job offers the opportunity (time, guanxi, cash via corruption) to engage in more entrepreneurial business activities …

  • Demetrius H.

    Unless China is able to adopt the necessary Enlightenment Values necessary for innovation and creativity it will never succeed on the scale of the West. These values are tolerance, the health of dissent, the rule of law, freedom of expression, and pluralism. A society without these values simply cannot function at nearly the same level of intellectual competence as that of a Western society. India, for example, as a country with far more developed Enlightenment Values than China, has been outperforming China for years in software innovation with a much smaller workforce.

    • Terry Newman

      I agree with Demetrius. In a practical terms the key issue is the rule of law and the ability to debate policy matters openly. Obviously neither of those things are currently a reality in any consistent sense. The constraints will remain until the politics change significantly.

      China claims to be subject to the rule of law, but that is not the case in the usual sense of the term. Law is applied selectively here and power is exercised in an arbitrary fashion. There is very little ability to reliably predict the future, or guarantee that one’s assets are not seized under some legal pretext. Even a traffic accident that is entirely the fault of the other party can result in significant financial pain. In business entire industries can be wiped out overnight, with no recourse, due to an arbitrary change in policy. There is no discussion and no forewarning. In business disputes, powerful enemies can coopt the corrupt court system to attack business rivals. Cash-starved government agencies impose arbitrary fines on businesses to help boost dwindling coffers. Again, no recourse is available.

      For those with powerful allies (guanxi) there is some protection from some kinds of the arbitrary exercise of power some of the time, but no-one is immune all the time. So luck and money are seen as essential to survival. Money can help buy protection or an escape route. With good luck accidents and illness might be avoided. Being ethical in ethical society is not only worthy, but will probably serve you well, but here a person who trusts the system is seen as a fool. The system is not going to protect you, and it is certainly not your friend. And this is the way it has always been. You are more likely to get help by burning some fake banknotes for the Money God during the Spring Festival and burning some candles to Guanying, the Goddess of Mercy and other deities that might bring good fortune.

      As long as this is the case, China is hardly likely to be leader in innovation.

  • stevelaudig

    I am a retired lawyer from the US and have taught conversational and written English in China for six years. First at a middle quality vocational ‘university’. Then three years at what could be called a military/industrial and large scale [say for example high speed rail] civilian engineering school and later at what is reputed to be one of China’s ‘best’ medical schools. It has been my experience that at every school the first few to several weeks of every course [class sizes have varied from 3 to 50] a large percentage of time is spent in ‘fear’ management/suppression in which I try to ‘desensitize’ students towards making errors in their spoken English. There is a pervasive ‘moral obloquy’ indeed ‘horror’ associated with publicly making mistakes that seems so deeply ingrained as to be pathological. Happily there’s always a percentage [say 5% or so] of the students who seem relieved at being in a different classroom environment in which mistakes are noted, corrected and moved on from and not deemed a personal failing. Of the three, the medical school students transitioned most quickly to accepting errors as inherent in learning while the military types were, by far, the slowest and least flexible. Call it ‘normalizing’ mistakes if you will but the contrast with American students was readily apparent. It should be noted that Chinese students were far more conscientious about completing assignments.

  • Paul Maidment

    Think of innovation in China in terms of incremental and process innovation, not big breakthrough innovations, and the answer to your question is an unequivocal yes.

  • mrgrb10

    INNOVATION MEANS regimenting the troops – China is well versed & rehearsed in this category! therefore the answere is yes & like the developed nations a sacrifice or sacrifices will be made.

  • C S

    China does not have a business culture as well as a physical environment for innovation in the scale of the western world. Lack of IP protection means that no one is going to spend a lot of resources to innovate. In such an environment, they find it more financially rewarding to merely make improvements on other people’s products and inventions. Pervasive corruption and severe pollution also ensure that people’s minds are pre-occupied with these pressing issues of the day. Make quick money, get it outside and get out takes priority over engagement in innovation for the long haul. The need to create jobs for the massive number of graduates (6 millions?) every year, the need to ensure that there is no social upheaval that would weaken the communist party rule and the need to maintain a certain level of economic growth every year, means that there are these more urgent and pressing issues to tackle than to seriously entertain the inherent leisure of innovation and to risk precious resources needed for innovation.

  • Concerned capitalist

    “Yet, it also strikes me that far too many of China’s best and brightest view a government job as their highest and best use/opportunity”

    How is it different from US? Pretty much all kids from power families are following milservice > CIA/espionage > consulting > government bureaucrat route.