WASHINGTON – The widely held view in the West is that the centers of Chinese innovation can be found in Beijing, with its government largesse and tightly integrated university system, and Shanghai, with its gleaming towers and far-flung industrial parks.
The conventional wisdom has it that the Pearl River Delta that includes the booming city of Shenzhen and surrounding Guangdong province is nothing more than China’s sweatshop.
That view is precisely backwards, argues America’s foremost scholar on Chinese innovation policy, Dan Breznitz of Georgia Tech’s Sam Nunn School of International Affairs. Breznitz, the co-author of a landmark 2011 book, “Run of the Red Queen: Government, Innovation, Globalization and Economic Growth in China,” was one of the first western thinkers to probe the inner workings of China’s evolving approach to innovation and what it means for the global economy.
The book’s thesis is that in a world of globally fragmented production, “China does not need to master breakthrough innovations to achieve success.” Instead, like the Red Queen from Lewis Carroll’s “Through the Looking-Glass and What Alice Found There,” China needs only to keep pace with technological innovations elsewhere, then master later stages of innovation.
Therefore, China’s vaunted “indigenous innovation” campaign is really “second-generation innovation,” Breznitz argues.
At the center of China’s brand of innovation is Shenzhen, with its acres of soulless manufacturing facilities – lacking all the glitz of shiny Shanghai or the gravitas of well-heeled Beijing.
To support his argument, Breznitz notes that the Chinese companies most feared by global competitors -– Huawei, ZTE and Tencent, China’s leading Internet portal and content provider -- are all based in and around Shenzhen. Despite the recent hoopla over Huawei’s ties to the People’ Liberation Army, Brenznitz notes that Beijing did not bestow the title of “telecommunications national champion” on Huawei as it did to state-owned enterprises like Datang.
Furthermore, when all the IT centers of Guangdong province are combined, the region outpaces Beijing (5 percent) and Shanghai (8.1 percent) in the percentage of Chinese patents issued, Breznitz discovered. The region accounts for no less than 18.7 percent of all patents issued.
As told to Breznitz by a regional official, here is one of the most concise descriptions I’ve ever read on the nature of Chinese technology innovation:
We think of innovation as something China didn’t have before, something we can now conceive and do. Let me give you an example. Take this teacup. The first people who made this type of teacup made of lot of money. The people followed and began making the cup as well. Then more people began to make this cup. What happened? The cup was overproduced and was worth less money. When products come out and make a lot of money and everyone wants to follow, we the government encourage them to innovate around the idea instead of just following others. Even if you want to make cups, you can make a smaller cup. This is innovation.
It would serve us well in the West to forget most of what we think we know about China and its innovation drive and begin a reevaluation by reading Dan Breznitz’s remarkable book.
Yoshida in China: Which candidate can save U.S. jobs?
Despite obstacles, experts say China continues to innovate
Cisco, Huawei and trade wars