One can hardly fail to notice the trendiness of innovation in and for emerging markets.
Frugal innovation nowadays comes in a variety of forms: reverse innovation (when products/services developed specifically for emerging-markets make it back to developed economies) and jugaad (the gutsy art of overcoming harsh constraints by improvising an effective solution using limited resources) both place emerging markets at the center of the innovation process.
While there are already some documented cases of emerging market innovations making it back to emerged markets (e.g. GE Healthcare’s portable ECG in India and ultrasound in China), it remains to be seen to what extent multinationals will take the risk of cannibalizing their own products. That of course also depends on whether emerging market multinationals will let them the time to think about it!
The Swedish furniture retailer IKEA is linking up with the Chinese electronics manufacturer TCL to offer a furniture-TV named UPPLEVA. One of the central value proposition will be the disappearance of cables (or at least hiding them better) and a better integration of the TV in the furniture.
So after getting their feet wet with Electrolux and Whirlpool, IKEA now moves out of the kitchen. The challenges for UPPLEVA? Keeping up with the fast evolution of consumer electronics will most likely require a very modular approach as well as managing the partnership with TCL
Quite an achievement realized by a company (“The Broad Group”) which started in the business of heating equipment and air conditioning less than 25 years ago!
There are of course important questions raised by such an engineering feat, e.g. in terms of structural resistance and scalability. One may also quibble about the fact that the conception of the design and the production of the pre-fabricated elements need to be factored into the timeline. It nonetheless strikes as a very interesting example of process innovation.
If you have 3 minutes to spare, the video is well worth watching.
The long-awaited report from the World Bank on the future of China has finally been released.
The report is of particular significance for several reasons. First, it has the endorsement of the Development Research Center – the State Council’s think tank. Second, it gives 6 clear strategic directions as to China’s development strategy. Third, it highlights the importance of innovation (even open innovation) and the necessity to link the country to global R&D networks.
To deliver on the innovation part, the focus will be placed on increasing the quality of universities and the links with industry, fostering innovative cities where talent and ideas flow freely and improving capital allocation. It all sounds very well thought through. Like all plans (and this one has 19 years to run) implementation will be key. So will be making sure that the institutional framework evolves at the same speed.
Not surprisingly, one reads that China is home to an increasing number of innovative products and patents and that competition between Chinese and foreign firms is bound to get more intensive. The piece also highlights some notable differences between domestic companies and MNCs: the former excel at time-to-market and can rely on the government’s strong support while the latter are better at nurturing a culture of innovation in-house.
The piece leaves one fundamental question aside: how does the transformation of the Chinese innovation eco-system re-define the global innovation landscape? Stay tuned if you are interested in the answer….
Ever heard of Tasly Pharmaceutical, the Kanglaite Group or Lanzhou Foci Pharmaceutical? All three companies are either engaged in clinical trials in the United States or applying for registration in the EU with drugs derived from traditional Chinese medicine (TCM). Akin to the research carried out on malaria by Youyou Tu, TCM may offer promising avenues to cure some of the world’s most lethal diseases.
Recognition of TCM by Western drugs agencies however rests on the capacity of scientists to clearly identify the active ingredient, something rather difficult for researchers used to traditional methodologies (e.g., water decoction, immersion, etc.) to process herbs.
There is no doubt that important efforts will be needed to conform to Western agencies’ strict protocols of registration so as to ensure the safety and effectiveness of drugs derived from TCM. Time may have come for both “worlds” to cooperate and devise together strategies to bridge the gap between Western and Chinese medicine.
The longest bridge, the tallest dam, the fastest supercomputer (at least for a while..) and the rest: the list of China’s technical achievements seems endless and 2011 a year of many superlatives.
All signs are there that China’s transformation into an innovation powerhouse is gaining momentum. For sure, it is still hard to pinpoint a particular breakthrough or name a leading Chinese personality associated to innovation – the search for the Chinese “Steve Jobs” in the Chinese Internet sphere is a case in point. But the data points are getting more and more numerous (e.g., emergence of an IP culture, growth of venture capital) and the government is not showing any slowing down in its plan to work China’s way up to first place.
For skeptical, the surprise will be large. Maybe the largest.
Can Chinese firms be considered as global innovators? No… at least not according to the latest Thomson Reuters report “Top 100 Global Innovators“.
The conspicuous absence of Chinese firms in the ranking is at odds with he explosion of patents that has taken place in the recent years at the domestic level. It is all the more surprising given the massive effort of international patenting carried out by ZTE and Huawei, which landed them respectively at the 2nd and 4th place in the WIPO ranking.
Is it a question of timing? Do Chinese firms take more time than others to transform their patents into products? Is it a question of geographic scope? Do Chinese firms file patents only in selected countries? May be it is a question of methodology. The criteria used to evaluate firms include success (filed vs. granted patents), global (patents filed in the USA, Europe, Japan and China), influence (subsequent citation of patents) and volume.
Chinese firms may not yet be top global innovators but they for sure are on the way to becoming top global competitors. It can be a costly mistake to believe that patenting is the only way to secure a competitive advantage.