Editor's Note: John Kao, dubbed "Mr. Creativity" by The Economist, is the chairman for the institute of large-scale innovation and author of Innovation Nation. You can follow John on Twitter, Facebook and at www.johnkao.com. This post is the final of six pieces by John about his recent trip to China.
By John Kao - Special to CNN
Over the past week, I have posted five pieces on the state of innovation in China. First, in “China as an Innovation Nation,” I provided a portrait of China’s innovation drive, describing its scale and success model. Next, in “Why is innovation so important to China?” I laid out the historical context for the centrality of innovation in China’s national strategy (After all, this is the country that invented the compass, gunpowder and printing.) The third piece, “Chinese innovation – paper tiger or king of the hill?” attempted to go beyond the “black or white” rhetoric that characterizes much of the current debate on how real and significant China’s innovation drive is in order to shape the conversation about how others need to respond to it. Given the importance of the entrepreneur in driving the innovation process, I wrote “In search of the Chinese entrepreneur,” with profiles of Aigo’s Feng Jun and Sundia’s Xiochuan Wang and added a discussion of Chinese entrepreneurship as an innovation asset or bottleneck. The last piece, "Innovation war or innovation peace?" looked at the potential for both conflict and cooperation in the U.S.-China innovation relationship..
In this, the sixth part in the series, "Guarded Openness as a China Strategy; a View from Shanghai’s Bund," I engage with hundreds of your comments from over the week.
Many readers voiced skepticism about the validity of Chinese innovation in a state-controlled society – words like “lie,” and “façade,” being some of the more polite terms of art. The commenter Truth remarked, “When I see a Chinese Jimi Hendrix or Beatles or Spielberg or Jobs or Edison or Gates or etc, I’ll believe.” In fact, some wondered whether I had been paid by China to write these pieces (I wasn’t) or whether I had consumed too much Chinese liquor before sitting down to write (I hadn’t). One person even questioned my loyalty as an American.
What do I think? Right now China is climbing up the initial rungs of the innovation value chain by making big bets on education, funding of science and technology and creating an ocean of intellectual property. Does it have the world’s most sophisticated innovation system and narrative today? No. Are there significant differences in value system with the United States? Absolutely. Do readers have a right to be skeptical? Yes. Personally I am skeptical – or at least cast a critical eye – on any government innovation agenda, including our own. But I also know that dismissive and emotional language often covers up an underlying anxiety and is not helpful in terms of creating greater understanding. And there is undeniable substance to China’s rise in the innovation ranks.
Others predicted a bright future for China. The commenter Many argued that “when the dragon is fully awaking and flexing its muscles, you’d better be on the right side of China.” One reader commented that we would all have to learn to speak Chinese.
My feeling on this is that China is neither the pygmy that some think nor a 20-foot tall giant. The future is bright for China, but the potholes along the path are huge. Meanwhile, our citizens will learn Chinese (and Spanish, and German, etc)
A number of comments bemoaned the parallel narrative of an American innovation, and therefore economic decline. “Devil evil vile” said, “sing, dance, play with ball (football, baseball, basketball), play xbox ps3 ... etc. 20 years later, what do you call a country full of singers, dancers and ballplayers? A 3rd world country.” To me, it is hard to look at how the U.S. is doing with regard to the pillars of innovation performance (education, finance, immigration policy, infrastructure replenishment, stewardship and strategy, etc.) without being concerned. The organic growth that we have enjoyed for so many decades with the success of the “American Idea” must now give way to a more considered and strategic approach if we are to continue to compete effectively and lead. It is tempting when one is not doing well to blame others, and China presents a tempting target. With regard to our innovation performance, alas, we have no one to blame but ourselves.
This notion of paradox – of contradictions not simply reconciled – is key to our deeper understanding of China. Can the creativity that comes from an entrepreneur on fire with a mold-breaking idea be reconciled with the notion of state control and top down policy? It will have to be if China comes to enjoy the kind of entrepreneurship that leads to breakthrough innovation. Can self-interest be tempered by the need for good citizenship in a global community? It must if China is to take its place in the new geography of innovation, which is inherently about collaboration and trust. Can a “fast follower,” “me too” approach to innovation evolve into the ability to produce game changers? The jury is out, but China is intent on mastering all aspects of the innovation cycle. These are the tensions that will shape the future history of Chinese innovation – and the world’s relationship to it.
And these tensions are emblematic of the contradictions that shape today’s China. A posture of what national security types call “guarded openness” is therefore appropriate. In other words, be open to sharing information and to collaboration, but exercise prudence and the kind of reasonable caution that comes with clarity about one’s self interest.
I experienced some of these contradictions myself first hand as I took a morning walk along Nanjing Road, the Firth Avenue of Shanghai during the last day of our visit. I stopped to admire the sweeping city/river vista of the Bund with all the promise that it seemed to hold about China’s future.
A distinguished-looking, likeable, and well dressed old man came up to me with a shy smile and struck up a conversation. He told me he was an artist and proceeded to make a paper cutting for me. To my dismay, he then asked for a “red one,” 100 yuan or approximately $15, then scurried away when a policeman stepped forward to find out what was going on. Kindly grandpa was a scam artist.
This in a nutshell captured the tensions of China for me; the lofty and the crass, the aspirational and the self-dealing, coexisting in the same social frame. On the same day, one can meet with leaders who are as competent, ethical and up to speed as exist in any country, and then go shopping across town in a mall specializing in counterfeit goods with racks of knockoff iPhones, DVD’s of first run Hollywood films, mountains of pirated software sitting side by side with fake Dolce and Gabbana t-shirts and handbags.
In order to get our minds around these contradictions we need to accept that China is here to stay and that dealing with China is an inevitability. It has been said, “If you don’t have a China strategy, you don’t have a strategy.” The key therefore lies in engagement. As an example, Microsoft, mindful of its piracy challenge, nonetheless allowed owners of counterfeit software to purchase legal upgrades, opened research centers in China and maintained a high level of engagement with a long-term view. This has been the posture of other companies and governments seeking to do business in China. We should neither embrace nor bash, but rather seek to understand in a spirit of “guarded openness.” In other words, carry an open wallet, but only have 100 yuan peeking out.
It seems fitting to close out our series with a sign I spotted in Shanghai on a busy construction site. It reads: “renovation in progress – apologize for any inconvenience caused.” Are we being apologized to or are we being asked to apologize as China “renovates” its way to the 21st century? The answer it would seem is more than a bit of both.
The views expressed in this article are solely those of John Kao.