On Monday, March 9, Apple CEO, Tim Cook, unveiled Apple’s eagerly anticipated smart watch, available for purchase on April 24. To make Apple’s first wearable device, of course, it will rely on a global supply chain that, according to China Daily, includes 349 Chinese manufacturers.
Weeks before Apple’s debut, however, resellers on Taobao, the C2C e-commerce platform of Alibaba – Yes, the same Alibaba that raised $25 billion in a record-breaking IPO on the NYSE in September, 2014 – were selling smart watches for less than $50. These aren’t called Apple watches, mind you, and they run on Google’s Android operating system rather than Apple’s iOS.
The screens are identical in size, but even the manufacturer of the so-called D watch, YQT Electronic Technology Co., Ltd., admits that the screen resolution is inferior to the Apple product and the D watch has much, but not all of Apple’s functionality. It does, however, offer step tracks, calendar, and Bluetooth-enabled remote camera control.
Zheng Yi, CEO of YQT, has proudly announced that the company has made enough changes (changes to what?) that it intends to file for patent protection of its product.
If this kind of thinking seems out of sync with Western notions of Intellectual Property rights Mr. Zheng is certainly not alone. A quote relating to the D watch in China Daily reads, “From smartphones to luxury items, there will always be knockoffs. It is a form of compliment. This proves that products are popular.”
This, once again, raises the age-old question: Can China innovate or just copy? Innovation, everyone admits, is critical to success in the modern economy and will be essential if China wants to stop being the factory to the world with all of the ecological degradation that comes with the title.
Chinese entrepreneurs are sure giving it a try. The Zhongguancun district of Beijing, sometimes referred to as the Silicon Valley of China, gave birth to an average of 49 new startups per day in 2014. And the district is now home to 1600 tech incubators, insuring a prolonged pace of rapid expansion.
In my humble glassmaker’s opinion, however, the debate over innovation is often mistakenly positioned as an issue of creativity. And if you look at China’s long history of art, architecture, and literature, it would be hard to argue that creativity does not exist in abundance here.
To me the missing ingredient is not creativity but curiosity. And the current lack of it in China, I believe, is the rote nature of its education system.
The American education system, to its credit, teaches nothing quite as ardently as it teaches curiosity. Admittedly, it doesn’t always take hold and requires a 24/7 partnership between parents and educators to truly be effective. But Americans are, on average, taught to be curious. How else could the National Geographic channel or reality shows about swamp logging survive?
If innovation was simply a function of creativity it seems doubtful that the tech innovators who have so changed the world would have led the charge. Even Steve Jobs, to my knowledge, was not endowed with creative genius. He was, however, endowed with unparalleled passion and curiosity.
This is where I believe America has really missed an economic opportunity over the last two decades. We’ve spent too much time pushing money around and lamenting our loss of manufacturing jobs. (Which should surely be lamented. We’ve wiped out the blue-collar middle class.)
What we should have done, instead, however, is devote our ample energies and talents to pursuing the curiosity that got us to where we are. Curiosity leads to innovation, if channeled properly, and it is innovation that defines the most profitable companies in the world.
There used to be a saying in American business that “pioneers get shot,” suggesting that it was always best to let someone else establish a new market before you went in with a better widget to harvest the spoils.
This is now outdated thinking, however. Beyond losing the opportunity to get the ‘first hook’ in the consumer’s brain, as marketers Ries and Trout so aptly noted, there just isn’t time to follow the leader. The pioneers will be on to something else and the market they created may not even exist anymore.
The Chinese university system will churn out some 7.5 million graduates this year, up from 1 million twenty years ago. And most will be hard-working and well trained in science, engineering, business management, etc. Many, however, will not find jobs. The business of copying only requires so many reverse-engineers. Mostly it requires low-skilled assembly workers and low input costs, both of which are becoming scarcer in China.
The question will be what those who do not find jobs will do. Will they compromise and accept work that is beneath their education? Will they devote their effort to complaining to the government about their lack of opportunity? Or will they create their own opportunity through innovation?
Many, it is feared, will move abroad, creating a brain drain that will only prolong China’s pivot away from its current export manufacturing model. This, however, I believe will be a short-lived migration. Most migrations started by necessity are.
In the end most Chinese people don’t want to live in America or Europe or Australia. They want to live in China. They are Chinese and very proud of the fact.
And this, I believe, will be the key to the emergence of the Chinese Century. A few outlying souls will have to show them the way down the path of innovation. Once the Chinese have their collective ‘aha’ moment, however, the trickle will become a stampede.
The creativity is here. The desire is here. The home market is here. The capital is here. They only need to understand that Steve Jobs set out not to make the Apple Watch, but, in his own words, “to put a dent in the universe.”
That’s where innovation comes from.
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Copyright © 2015 Glassmaker in China
Notice: The views expressed in this post are strictly those of the writer acting in a personal capacity. They are not in any way endorsed or sanctioned by his employer or any other individual with which he may be personally or professionally affiliated.