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Business / Industries

Taking innovation to the next level

By Hal Gregersen and Curtis T. Lefrandt (China Daily) Updated: 2014-01-21 07:13

Taking innovation to the next level
 
Production lines at China's leading meatpacker and pork producer Henan Shuanghui Group, which is one of the five Chinese companies that have been included in the "World's Most Innovative Companies List", a joint collaboration with Forbes Magazine and HOLT, a division of Credit Suisse Group AG. Jin Yuequan For China Daily

Taking innovation to the next level

Although China has shown remarkable determination and skill in organizing and deploying resources to meet key objectives, there are still significant barriers that continue to limit its people's creative capacity. Critics of China's patent process point out that below-par standards, poorly designed incentives and a focus on quantity over quality have created a system in which "patents are easy to file, but gems are hard to find". Some of China's brightest minds, such as ex-Google China chief Lee Kai-Fu, note that China's educational system trains its students to be very good at rote learning but "doesn't make them creative, original thinkers". Others point out that Internet censorship and a lack of cultural diversity creates an overwhelmingly homogeneous environment that isn't conducive to creative thinking.

To fuel the next wave of innovation, China needs to combine these impressive investments with behavior and a cultural mind-set that foster truly disruptive innovation. No doubt this is easier said than done, but several bright spots of innovation direct us to deep wells of creative potential that can be tapped within Chinese people and companies.

For example, five Chinese companies landed spots on our "World's Most Innovative Companies List", a joint collaboration with Forbes Magazine and HOLT (a division of Credit Suisse Group AG) that we have run for the past three years. Companies on our list are ranked by their innovation premium: the difference between their market capitalization and a net present value of cash flows from existing businesses.

The five most innovative Chinese companies include meatpacker and pork producer Henan Shuanghui Group (ranked ninth on our list), Internet behemoths Baidu Inc (10th) and Tencent Holdings Ltd (17th), Kweichow Moutai Co Ltd (44th), and at 64th place, China Oilfield Services, a majority-owned subsidiary of Chinese State-owned company China National Offshore Oil Corp Group. What sets these companies apart as top innovators is they cultivate certain key behavior and cultural philosophies. As a part of our research on creativity and innovation, we studied dozens of similar companies to draw insights into how businesses and individuals can successfully innovate - despite the unique challenges they face.

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