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Innovation key to Chinese enterprises' global expansion

By Hu Yuanyuan (chinadaily.com.cn) Updated: 2014-09-23 18:03

Chinese companies prioritize innovation and globalization more than multi-national corporations prioritize on innovating in China, a survey by global consulting firm Strategy& showed on Tuesday.

The survey showed that the first priority for 31 percent of Chinese companies is globalization compared to 21 percent of MNCs, according to Strategy&, formerly Booz & Company.

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"This strategic choice likely reflects the deep and well-trained reflexes of Chinese executives to innovate to succeed, regardless of the geography," said Steven Veldhoen, partner at Strategy&.

"As Chinese companies globalize, they will push the innovation bar higher. We see Chinese companies using innovation to demonstrate relevance for new customer segments, particularly in niche markets."

The 2014 China Innovation Survey was jointly carried out by Strategy&, the Benelux Chamber of Commerce, the German Chamber of Commerce in China, China Europe International Business School (CEIBS) and Zhejiang University School of Management.

In innovation, 42 percent of Chinese companies considered it a first priority, compared to 21 percent of MNCs, according to the survey. The survey was taken by nearly 400 executives from Chinese and foreign companies this year.

Chinese companies are increasingly turning to technology to deliver first-to-market innovations, building on their strength in understanding local markets and customer needs.

Chinese companies are more likely to globalize their innovations to access talent and new technologies. Sixty-eight percent of Chinese companies indicate that the reason for setting up an innovation center is to acquire or monitor a leading technology. For MNCs, 90 percent say that the focus is to capture customer trends and insights.

Chinese companies are also more likely to partner with organizations outside of suppliers and competitors and work with universities and research institutes.

In 2014 survey, eight of the top 10 Chinese Innovators are high-tech or internet companies.

In this year's ranking of the most innovative Chinese companies, the top three remain the same but in a different order. Huawei, Tencent and Alibaba. Xiaomi, BYD and Meizu are newly added to the list. Among the top 10 MNC Innovators, Apple, Samsung and Volkswagen rank in the top 3.

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