InnovationCatching up: Indian and Chinese companies at the forefront of innovation
In a few short years, the Chinese and Indian share of the world’s research and development centers has increased from 8 to 18 percent. A new study says that India and China invest more than the West in organizational innovation, that is, the implementation of a company structure that creates a favorable climate for new inventions.
In Europe and the United States, the importance of regional clusters is often emphasized for the development of new products and services. In China and India, it is global collaborations rather than regional ones that drive innovation.
“It is still the case that both Indian and Chinese companies imitate others, but they have also become better at developing new complex products”, says Monica Plechero, who has studied Indian and Chinese companies in the automotive, ICT, and green biotech industries.
A Lund University release reports that the process has not been exactly the same in both countries. China mainly develops products for the domestic market; international trade comes second. In India, the international market is used as a springboard in product development.
“The Chinese market is larger and more mature than the Indian market”, says Plechero.
In the course of just a few years, the Chinese and Indian share of the world’s research and development centers has increased from 8 to 18 percent.
Plechero claims that India and China invest more than the West in organizational innovation, that is, the implementation of a company structure that creates a favorable climate for new inventions.
What is the West to do, then, when it can neither compete on low wages or on the best innovation capacity?
“I think we need to become better at utilizing others’ knowledge, just as is done in China and India. It is not a bad thing to learn from others’ knowledge. Of course, then you have to specialize and find your own niche. Successful European companies are far too eager to keep their trade secrets to themselves.”
— Read more in The Changing Geography of Innovation: Chinese and Indian Regions and the Global Flows of Innovation (Lund University, 2012)
