Monday, September 30, 2013

China's Top-Down Take on Innovation - WSJ.com

China's Top-Down Take on Innovation - WSJ.com:

"In China, that's an especially tough transition. Chinese scientists complain that Beijing focuses too heavily on headline-grabbing efforts, like building supercomputers—it currently makes the world's fastest supercomputer, in a ranking done every six months by Top500, a group of leading computer scientists—rather than fundamental science that could spawn new industries."
Yes, but same is true almost anywhere. Resource allocation will be biased by media attention. Chinese way to encourage innovation is actually very capitalistic, if think the state as a corporation. The strategist at the headquarter pick the areas that are key to the growth, and the CEO and CFO throw tons of money into those areas. The conglomerate corporations operate this way, and Chinese leaders learn the lessons from them. Whether it is effective is another question.
Over the coming weeks, Chinese leaders will need to confront a fundamental question: How much are they willing to ease control, let markets operate more freely and encourage curiosity-based innovation? The more they pull back, the more they may reduce their ability to control society. The more they continue to dominate, the less they spur the kind of innovation that can create new technologies and industries.
I don't think the it would worry them. Science and engineering thrived in Stalin's Soviet Union and Hitler's Germany, or this is what the Chinese leaders have learned from their history book. Even if they are confronted with the either-or choice, they will make the decision in a heart beat, and you know the answer.

Further reading:
When China is looking for next Elon Musk, Bryan Mezue thinks Emerging Markets don't need one

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