China’s Road to Innovation
How one country is growing into an innovation hub.
To survive a fast-paced world and an even faster changing economy, China is transforming its reputation from copycat to innovator. In the past, Chinese culture never put enough emphasis on being creative or taking risks when it came to business and education. Not because the industry wasn’t able to, but because China stems from a culture in which the goal is to keep businesses stable so they won’t fail, unlike many Western countries, where they believe it’s okay to fail in order to succeed. But now, the outdated way of conforming in China is transforming, and the country is understanding the positive impact their economy could benefit from if they can adopt an entrepreneurial mindset.
In 2010, the International eXperience Design Committee (IxDC), the largest user experience (UX) community in China, was created with the support of over 20 companies and universities to promote the values of innovation and user experience design to society. Since it was founded, IxDC has become one of the most effective promoters in the experience design industry, since it created an international platform for exhibition and communication. In January 2017, they organized the 2017 International Design Trip to the U.S., where they have visited 4 times before, in which Chinese education and business leaders visited tech companies in Seattle and the San Francisco Bay Area, including Facebook, Airbnb, LinkedIn, Google, and SAP, to observe company cultures and chat with UX design experts.
SAP’s DeXin Shi and Tina Tuan hosted the tour at SAP. Members had a chance to speak with SAP’s Anamarie Franc and Rana Chakrabarti about the importance of design thinking in enterprise and in higher education. Rana told the members about Project Moonshine, a higher education project he has been working on with other members from SAP and UC San Diego. He discussed how to introduce design-doing into the higher education system in the United States and how it might be inserted into existing classrooms, rather than creating an entire new course that includes design. Since many members of IxDC are involved in the higher education field, such as with China’s School of Innovation Design of Guangzhou Academy of Fine Arts, many were interested in how design and innovation could be translated into the Chinese ecosystem.
IxDC has been spreading the word about innovation for many years, but Chinese society is only recognizing the urgency now because there is growth in their middle class. The middle class in China (those who earn $9,000 — $34,000 a year) is growing at a faster rate than the economy can handle. In 2000, the middle class only made up 4% of China’s entire population, but in 2012, that number rose to 66%, a number that is expected to grow in the next few years. This means that the majority of all money spent in China is spent by the middle class. But, the Chinese economy will only benefit from this disposable income if consumers purchase Chinese-made products. Chinese businesses need to innovate to continue to keep consumerism within their country’s economy. Consulting firm McKinsey estimates that by the year 2022, 50% of all money spent in China will be on the service economy. This opens doors for Chinese entrepreneurs who are willing to innovate to benefit the middle class.
“[Consumers] are very informed with global trends. So, this also forces Chinese companies to innovate, otherwise, these well-educated customers will turn to other products. For instance, to choose between iPhone and Huawei phone, it’s decided by which one has more driving force towards consumers. Only by more awareness of the power of innovation can Chinese companies survive in this huge global market.”
-Luo Huan, CEO of C.BON Design and Consulting Co., Ltd. (member of 2017 International Design Trip to the U.S.)
Take WeChat, for example. With over 768 million active users, it has become one of China’s most popular app because it provides fast and easy services just by going on a smartphone (which are in the hands of 87% of China’s whole population). WeChat is used to socialize, buy tickets to the movies, pay utility bills, and even book plane tickets. This type of versatility in an app makes completing tasks more convenient than before — something that the new generation of China’s urban population desires.
New opportunities for entrepreneurship in China is a relatively new concept, but it is becoming more popular. The incoming wave of the middle class in China has led to confidence in people to start their own companies. Younger college students are recognizing that they can become extremely successful if they create their own startups, like many western countries have been doing since the beginning of the millennium.
The Chinese economy is expected to grow rapidly within the coming years. Cities such as Shenzhen have already begun their transformation into an innovation hub. With the help of IxDC, who is bringing awareness of entrepreneurship and design to their country, other Chinese cities will follow Shenzhen’s lead and begin their own advancement. China is proactively visiting other countries to learn as much as they can to transform their businesses and higher education systems, and the 2017 International Design Trip to the U.S. was just one stop they have made on their road to innovation.
