Innovation summit powers cooperation

Forum for Swedish CEOs and Chinese SOE heads looks into future of business

Editor's note: The heads of leading Swedish companies and China's State-owned enterprises (SOEs) shared their insights during the Sweden-China CEO Summit on Innovation held on May 22, Peng Yuefei and Chen Jialu report:

In a globalized world, where the speedy flow of information makes competition increasingly intense, the power to innovate is essential.

The concept of innovation has much to do with technology, but is wider when an novel product can be patented - such was the consensus reached at the forum.

In China, the concept of innovation is prized by the government and tops its development agenda.

At the forum in Beijing hosted by the Embassy of Sweden and the State-owned Assets Supervision and Administration Commission, company and SOE heads were joined by King Carl XVI Gustaf of Sweden, Deputy Prime Minister Maud Olofsson and Minister of State-owned Assets Supervision and Administration Commission Li Rongrong.

Sound foothold

Today, there are more than 1,500 Sweden-related businesses in China that embrace innovation as key to their successful presence in the nation as well as in the world, said Mikael Lindstrom, ambassador of Sweden to China.

"Innovation is linked to economic growth and job opportunities and is a principal determinant of the welfare of nations and their citizens," Lindstrom said.

"Sweden's willingness to spend so much on research and development is certainly one of the determining factors."

Many believe that the Swedish education system, which encourages critical thinking and the questioning of established facts by students at an early age, is equally important.

Cooperation potential

As global leader in environmental protection, Sweden has unique experience in creating a low-carbon economy.

Many speakers at the event agreed that China and Sweden have enormous development potential.

"The global challenges in the environment are great. Swedish environmental technology and services can be a new area to strengthen Sino-Swedish cooperation," said Ulf Berg, president of the Swedish Trade Council. He added that Swedish companies are significant buyers of Chinese products and services.

Li Dang, general manager of China General Technology Group Holding Ltd (Genertec), noted that the group's environmental protection fund set up earlier this year helps introduce advanced technology and energy conservation facilities developed in Sweden.

Developing a low-carbon economy has become a central goal of the government to transform the nation's economic structure, with energy reduction increasingly crucial to manufacturing, Li said.

"In advanced production, companies should add innovation in services and sales to transform the enterprise from production-oriented to service-concentrated," Li said.

Li said Genertec is now drawing on the experiences from top facility manufacturers and service providers to better innovate.

'Green steel'

Delegates also expressed their viewpoints on innovative solutions to conserve energy.

He Wenbo, general manager of Baosteel Group, noted two key factors in car production - cost reduction and energy conservation.

The cost of iron ore has become a main concern due to the high ratio of steel in cars. A possible solution is to invent new technology to use raw materials more efficiently, he said.

"Innovation is based on outstanding techniques. Without advanced techniques and skills, innovative ideas cannot be carried out. Highly efficient techniques reduce the cost of products, which helps to maintain innovation and plays a positive role in long-term development of the car industry," He said.

To bring about innovation, companies need to understand the importance of new business models, he added.

HR and opportunities

Human resources and management are also vital to put innovative ideas into practice, with enthusiasm needed by team members for the strength crucial to confronting risky situations.

Sha Yuejia, vice-president of China Mobile, noted that a company seeking to reach the top has to be sensitive to what the market and its customers want and be capable of changing itself to meet their demands.

Enterprises need to have a clear understanding of what a big company needs to become a leading company.

He said the development of China Mobile began by taking advantage of the Internet, then followed with providing better service than other rising companies and eventually adopted varied service plans to meet customers' interests.

He said the success of China Mobile can also be attributed to the company's ability to catch business opportunities. Since all markets fluctuate, companies need to accurately recognize the changes and catch new business opportunities to ensure the expansion of their companies.

Moreover, a company needs to have innovative ideas when encountering new challenges. As the market gets more and more competitive, all competitors have developed their unique skills and know-how to use their special innovation to achieve more valuable products and services. They have to come up with new ideas in order to survive in the market.

"We are figuring out a new way, but it takes time to develop fascinating innovative power," Sha said.

Zhang Liang, executive vice president of COSCO Group, said that innovation is mainly demonstrated through the business model of an enterprise. By operating the business instead of owning it, shipping has changed in significant ways, which fosters the innovation processes.

"These years, we have developed 'green shipping' through the adjustment of the group structure, advanced route design, proper shipping speed and new techniques in operations," Zhang said.

Deep insight

Echoing the insight from SOEs, Lars Pettersson, president and CEO of Sandvik, emphasized that innovation can result from mistakes.

He added that innovation does not come without education and training, so management and encouragement are important. Companies should allow staff to make mistakes so they can challenge the traditional techniques by trying multiple methods, he said.

President and CEO of Ericsson Hans Vestberg noted how his company fast tracks innovation by focusing on standardization.

He explained that the number of cellphone users is now reaching 5 billion, so the mission of a handset maker is to ensure the contact of its customers in any part of the world.

Standardized technology is way people can successfully make contact even with different companies, service plans and locations. It also helps to reduce the cost of production.

Two aspects are mentioned in the innovation planning by Ericsson: advanced techniques and creative services. Advanced techniques guarantee efficient business procedures, and creative service helps to transfer the business integrity from quality products to good service provided by the company.

Delegates include heavyweights from Sweden's business community and government.

(China Daily 06/01/2010 page15)