Globalization: The China Machine! Is Creativity winning against Copy-Cats?

Chinese business cats are really afraid of creativity

By Pooky, this blog economics journalist

Recently, Apple opened the Apple Store in down-town China-to sell the iPhone. Many wondered why did Apple did that, because China had cracked the code and was producing copy-cats iPhone that not only sells widely in China, but in the entire ASEAN region as well.

  • Is that a sign that creativity is starting to win the commerce war in China?

Well in fact, apart from Apple, most of the globe’s major brands that are known to be creative and innovative-have established strong followings in China. Why is that, when cheaper copy cats alternatives are everywhere? Like, in Hangshen Mall, Starbucks, a coffee house, sits right next to Indigo, a Chinese coffee house. Both offers about the same thing-but Starbucks is beating Indigo by a mile.

  • Is it just brand conscious? If so, what does many foreign brand, like Apple and Starbucks represents?

Well, who knows what a typical Chinese consumers think. However, the UK government appears to think it is innovation and creativity.

  • The UK government, after years of trying to crack the Chinese market, and failed-decided to do a market research in China. The research found that the typical Chinese saw the British as conservatives and boring. And to help UK goods sell in China, the UK government spent about US$200 million, “Re-Branding” the UK in China.

The new image? A UK that is cutting edge creative and innovative.

  • The Thai implication?

China now sees Thailand as China’s gateway to ASEAN. The roads and rail linking Thailand to China are going up. Apart from that, China has very strong links to the Thai-Chinese community, which arguably, controls much of Thailand’s economy. The Thai Chinese community, now, has very strong direct link to a Thai political party,New Politics, that teaches that the poor are too stupid to vote. Or Thailand’s leading Thai Chinese owned conglomerate, CP? Its cable TV busness just went preaching that totalitarianism is good for Thailand.

Will Thailand learn from China’s success and failures-or will Thailand blindly follow China’s lead? And as China uses Thailand to crack the ASEAN market with cheap copy-cats, what products will lead Thailand’s crack of the China market?

  • The following is from the Atlantic:

Is the discussion about whether Chinese schools foster “creativity” and “critical thinking” confined to foreigners, or to Chinese writing in English?

Apparently not. Today’s People’s Daily has a big story on the results of the Intel International Science and Engineering Fair, just completed in Reno. (The Chinese team, from People’s Daily.)

The article notes that mainland China had a large number of entries and won many minor prizes. But it had no real successes — and the question was why.

The three overall grand-prize winners were all young women from American high schools, shown here. For individual best-in-category prizes — 18 total according to People’s Daily, 19 total according to Intel — all but one went to American students. That one exception was from Taiwan.

What’s the problem?

The article discussed some obvious barriers — language, resources — but quoted a number of Chinese authorities saying that the real problem lay in the way Chinese schools taught people to think for themselves — or, didn’t. Too much emphasis on rote, detail, and following procedures; too little encouragement to reflect about the process of discovery. An analysis very similar to what we originally heard from a foreigner.

I do not pretend to be able to follow arguments in the Chinese press with any nuance. I offer this (tipped from a contact at Intel, then labored-through by me) as evidence of a parallel, and obviously authorized, Chinese-language discussion, and as a resource for any Chinese reader who might have missed it.

  • The following is from Knowledge@Wharton

Tools for Business Recovery: Innovation, Communication and Flexibility, among Others

Following the global crisis, poor prospects for a rapid economic recovery have led many companies around the world to come up with a strategy for 2010 to keep themselves afloat. “2010 will be a year for working twice as hard and making half as much,” said Javier Fernandez Aguado, professor of general management at the European Forum of the Navarre School of Business in Spain, and the author of some thirty books, including Creators in the History of Spanish Management and Leadership Creators.

He was speaking at the latest conference of business leaders sponsored by Expansion, the economic daily, last December. “This will be a year of transition, and of political and conceptual renovation.”

So while most financial institutions face a change in their business models, with governmental announcements about limiting their power and developing transparency, multinationals and small and midsize firms are pursuing their own paths. From a financial viewpoint, U.S. President Barack Obama has been the latest to provide his vision about the future of banking. At the beginning of January, he announced that he was setting up strict regulations for banking institutions that would limit — and even prohibit — certain financial activities in order to avoid speculation in banking markets, both on their own accounts (through proprietary trading) as well as those of third parties.

  • A New Business Paradigm

This announcement, applauded by the European authorities, will encompass a new paradigm for the financial sector — a renewal that the business environment will also undergo, and which will involve management and new managerial tools.

This recession has provided an inflexion point for business managers and redefined a new business paradigm. Most management experts stress that everything that has happened – from the decline in the world’s main economies to governmental intervention in large financial institutions – must serve to mold the growth and model the development of every participant in the global economy: from the big international companies, which have seen how their business plans became obsolete with the financial crisis, to the family-owned firms affected by credit restrictions, high unemployment and fear that other companies would join those ranks.

In many cases, the first step that companies must carry out is to discover the new reality they are involved in. “Everyone has to know that there are ups and downs, and the important thing isn’t figuring out if you have a crisis but how to manage it,” said Aguado. In this context, Enrique Alcat, professor of corporate communications at the European Business School in Spain and a consultant in crisis management, noted that there are only two options: “Hide or look to the future, trusting yourself, and being pro-active and using your network of contacts. Those who choose to take positive steps will wind up afloat.”

He cited three concepts for becoming stronger during the current situation: preparation, prevention and transparent communication.

  • Reducing Expenses

Until now, most companies, both public and private, have chosen to reduce their operating costs rather than cut their revenues and profits. Taking this approach, there are many cases of business leaders who have changed their management model by making adjustments in their personnel. “Crises are crises, and we have done the same thing in all of them: reduce costs,” said José María Ortiz, director of the Excellens Program (which comprises Administration and Corporate Management, Law, and a Master’s degree in Human and Professional Leadership) at the Francisco de Vitoria Universia in Madrid.  He pursues this policy of corporate cost savings since “reducing costs is usually synonymous with increasing control.”

  • However, you always have to go further, he added, looking for management formulas that permit recovery, such as innovation and capturing talent.

In addition, the outsourcing of many services developed in companies emerges as a possibility for cost savings, facilitating the adjustment in the plant toward the market’s current needs for services.

Once these new conditions are created, experts advise that it is important to emphasize the process of change, with constant care and vigilance and, of course, the possibility of actualizing the model, and even finding the perfect formula for each business. “The most frequent mistakes in the management of change are improvisation, confusion about goals and individualism,” noted José Aguilar, author of Growing after a Crisis. He is the managing partner of Mind Value, a consultancy. “Change is successful when it is rigorously planned and realistically executed, but it can fail when you don’t take into account the reactions, which are perfectly predictable, of all the interest groups that are affected,” he said.

According to Carlos Sánchez, managing partner of e-Motiva, a consultancy that specializes in strategic management, “There are moments when companies must face situations that are so difficult that even survival itself is at risk. Overcoming those situations successfully requires making decisions at every level that have a strong impact on people.” He added, “Success in managing the process of change; cohesion and credibility of the managerial team; the decisive commitment of mid-level managers, and the attitude of the workers will be the difference between life and death for many companies.”

Experts agree that innovation, committed leadership and sustainability are the most often mentioned formulas, and they must play a role in the success of the corporate recovery. “We need leaders who are in sync with the new paradigm, in which old values like individualism no longer work,” said Nuria Sáez, partner of InCrescendo, a consultancy specialized in organizational change and transformation. Araceli Mendieta, who coaches executives and teams, agreed with this idea, arguing that some models were successful in the past but that it is necessary now “to be more permeable” when it comes to adopting new systems that work effectively under the new conditions created after the international crisis.

  • According to Javier Martín de la Fuente, partner of Person’a, a professional career services consultancy, companies can no longer continue to be anchored in a culture focused on costs, but must commit to innovation. This means not only Research and Development, which has a more technological meaning, but also the creation of open spaces where creativity in the business environment can be encouraged

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