Unleashing the power of innovation

Engineers work at Bell Labs in Shanghai. Many multinational companies have set up their R&D centers in China.CHINA DAILY

China's achievements in R&D came under the spotlight at the China Innovation Research Findings Conference held at the CEIBS campus in Shanghai in May.

Attended by R&D heads from some of the leading multinationals in China such as AkzoNobel NV, Robert Bosch GmbH, DSM NV, Royal Philips NV and Royal Dutch Shell Plc as well as Chinese companies, it presented the findings of the work of the business school's Centre on China Innovation, set up three years ago.

George Yip, professor of management and co-director of the center, believes China is on the brink of major technological breakthroughs.

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"Chinese companies are investing more and more in R&D, and the Chinese government's investment in research institutions has started to produce results," he says.

"I think the next few years are going to see a dramatic take off."

Yip, former dean of the Rotterdam School of Management and co-author of Strategic Transformation: Changing While Winning, says one of the key breakthroughs has been in aerospace technology.

COMAC (Commercial Aircraft Corporation of China) is to launch its first commercial airliner, the C919, to rival The Boeing Co and Airbus SAS, in 2016.

"It is leading-edge technology and almost no other country in the world can do this outside the United States and Europe. It will sell very large volumes in China and from there to the rest of the world."

Bruce McKern, former co-director of the center and now visiting fellow at Stanford University's Hoover Institution, says the Chinese have built a strong research base from essentially copying technology.

"They started to learn how to innovate by copying. They then improved on the copying with their own innovations. As a result they have become good at incremental innovation," he says.

The Australian academic says this type of incremental innovation is now vital for the current stage of China's economic development, where production has to become more efficient to absorb higher labor costs.

"A richer society that has higher labor costs has to innovate because it has to find a way of producing things more efficiently," he says.