Innovation, creativity needed to sustain growth
By Alexander Wan and Selina Lo (China Daily)
Updated: 2005-12-06 06:13

Are local Chinese industries ready to design and innovate, or is it easier and more cost effective just to copy others like other Asian economies are doing? Those were the questions raised by delegates at the 20th China Daily CEO Roundtable meeting held on November 30, 2005.

The questions provoked ardent discussion at the "Next Generation Design, Innovation and Creativity for China" meeting, co-hosted by China Daily and the Illinois Institute of Technology. More than 30 CEOs and senior executives from prestigious companies in the design, media, lifestyle, technology, communications, education and legal sectors sat down at the Peninsula Palace Beijing with one objective: to exchange views on China's capacity and challenges in rising to the global stage of design and innovation. Mary Ma, a former national model and now president of her own fashion design company, was among the distinguished delegates that attended the prestigious event.

Assuming a more active role

In their opening speeches, both honorary chairmen at the 20th roundtable were optimistic when discussing the future of design in China and its implications for the country.

"China is progressing in its revolution from the old, stifled economy into a robust and global economy," began Victor Chu, chairman of the First Eastern Investment Group."As China is still in transition, I think it will make a difference whether it can be at the cutting edge of innovation - not just on the industry side, but on the financial and social side as well."

"The centre of gravity, energy and growth of the design market is shifting from North America to Asia," said Professor Patrick Whitney, principal of the IIT Institute of Design. He was equally excited about China's creative prospects. "When things are designed by Chinese factories they are exported back to the West.But I think that model will change and we'll be designing things in China for China."

Christian Boustany, chairman and managing director of Boustany Projects Development, welcomed Chinese influence in the global design market.

"China was completely absent from everything that had to do with creativity and innovation just a few years ago," he said. "The countries that are currently on the world scene have reached a level where there's nothing new, so it's very healthy for everybody to have China come into the picture now. It will introduce and impose its tastes, styles and specifications onto others."

Bruce Nussbaum, assistant managing editor of Business Week, claimed it was only in the past year or two that he has been able to see "that there is a great deal of value to design thinking, design strategy and innovation."Which means China is not so far behind.

"It's only been recently that large corporations such as Apple, Starbucks and General Electric have led to a tipping point in the US economy for going very deeply into design and innovation," Nussbaum remarked. "It would be wonderful to see how China adapts and evolves in terms of innovation and design because the US is just about to begin as well."

Design as a necessity

"Design is a necessity rather than a luxury in the foreseeable future," claimed Moses Cheng, senior partner at Messrs PC Woo & Co and the chairman of the listing committees of the main and the GEM boards of Hong Kong Exchange and Clearing Limited."I would say that design is a requirement for survival rather than the traditional belief that it only adds values to whatever you are doing right now."

Moses illustrated his point by explaining how the changing political and economic climate in Hong Kong has forced him to 'redesign' his legal practice by moving to the mainland.

"Irrespective of what industry you are in, you've got to be able to understand your situation and be ready to react to it," said Cheng, whose interpretation added a creative twist and a much broader meaning to creativity and design.

Director of the solutions and applications department of Nokia (China) Investment Company, Asha Hemrajani, said her personal and company interests were the same as this.

"I think design is a necessity because of how all these things are tied together," said Hemrajani."We're working very hard to see how we can increase penetration of mobile telephony into the huge markets of China and India, where even some basic utilities, like electricity, doesn't exist.We have to design something that is affordable, can be used without a running source of electricity and yet still be able to make money for us.I'm thinking of design for low-end products, which has largely been ignored.

"I hope that design or the answer to this big question comes from Asia because only Asians can design best for Asians."

Ben Tsiang, executive vice-president of China's leading portal website Sina.com, argued that it actually takes a lot of innovation to localize a business model, so China should not be accused of being a mere copycat.

"You see so many great companies coming out of the US and Chinese companies seem to be copying all their great ideas.But if you look at it deeper, there's a whole lot of context in terms of localization.We develop a unique feel and look for the China market."

Challenges

But for the creative industry to flourish, China must first tackle some infrastructural and mindset problems of its own.

"How China can take advantage of its opportunities depends not just on design, but also on other soft infrastructure developments, like the protection of intellectual property rights and the dynamism of government officials to promote and open the landscape, particularly in the multimedia sectors," said Chu.

Anil Mathur, CEO of Godrej & Boyce Manufacturing Co Ltd, which produces consumer durables, finds many similarities in the design industries of China and India.

"I think to bring a culture of innovation into these developing countries, it's very important that we make SMEs become innovative because they are the ones who add to the value chain for large corporate houses," Mathur observed.

"Secondly, it's very difficult for an individual company to move about in developing countries. We need a new, strategic design policy which will take the whole industry forward by involving policy makers, SMEs, design educators and students," Mathur stressed.

Jan Stael von Holstein, president of The Network with a Silver Lining, who is currently working on developing a science and technology park on the mainland, thinks Chinese designers are very talented and poised to make great leaps.

"The missing factor, I think, is the industry's understanding of how to judge what is a good idea and what is good design.There are simply no parameters by which they can say this is good or bad," von Holstein pointed out.

Educational reforms

The delegates agreed that good educational reforms are imperative for supplying the right talent to drive what could well become a very prosperous design market.

Peter Lawrence, president of Corporate Design Foundation, Boston, who works with companies and universities to raise the awareness of executives and students about the value of design, uses Samsung's internal design school to illustrate the importance of education in developing fresh talent.

Samsung's chairman spent 4 years and millions of dollars setting up an internal school to educate their best designers.These designers, in turn, have headed up the design group and moved into management positions, showing that Samsung's long-term investment has paid off.

User-driven creativity

Besides educational reforms and investment, user focus and market research are also very important in moving the design industry forward.

As Whitney stated in his opening speech: "The main challenge for Chinese design, I think, is not assuming that design is done quickly and cheaply, but that design takes a little more time and costs a little more to get a better view of the daily life of users and use user-understanding as a new platform for innovation."

He added that the rise of creativity in the United States actually started in the 60s and 70s when Japanese products came in to take a piece of the pie.

"American consumers will jump at the option of buying better things from other countries," Whitney pointed out."In other words, it was American consumers that dragged American companies into doing good design.

"If China follows that same pattern it will be consumers that lead the charge and the industry will have to follow eventually."

"In India, we face the same issue of designers not being able to understand the culture and the needs of local requirement," said Mathur."So in developing our own products we try to find out what issues consumers face and develop products which have solutions to their problems."

Professor David Liang from Taiwan claimed that Taiwan is also too manufacturing oriented and needs to make more effort to understand consumers.

"In Taiwan, ODM has come to stand for 'Own Development Manufacturing' - they don't understand how to focus on users," said Liang.

"We have to understand the culture, the society and what people really need," Liang continued."Innovative design should be based on user-oriented product strategy. R&D technology can do everything, but if you don't understand people's needs, then it's nothing."

The importance of market intelligence has led some companies like Baidu.com and McCann WorldGroup to set up special teams focusing on customer behavior.

Guo Yu, chief designer and director of Baidu.com's user experience design department, claimed that his team is one of a kind.

"Baidu is maybe one of the very few companies which have created a user experience design department," said Guo."We're just a 30-person team and everyday we have to research people we just focus on people and what they do."

Unique opportunities

For Chu, the future of China's design industry looks bright."Creativity and innovation is propelled by incentives - or more bluntly, by greed.And to provide the soft infrastructure for innovation to flourish, you need a capital market, company law, and a venture capital industry that is conducive to that type of development. And we're getting there."

Besides, unlike its more developed neighbours South Korea and Japan, China actually possesses some unique advantages its Asian counterparts do not share.

"All this energy that is being put into creativity and innovation is affecting something very seriously - the environment," Boustany reminded the delegates."China has the opportunity to design good environments, new cities and communities they way they should be. I think this is one of the roles that China could very well do and secure for everybody."

(China Daily 12/06/2005 page11)