‘China chic’

Mike Lord: "China has become fertile territory for a rich flowering of creativity and innovation."

Mike Lord is the lead author of Innovation That Fits: Moving Beyond the Fads to Choose the Right Innovation Strategy for Your Business, which he is revising and updating for a new Chinese edition. The book is being translated into Mandarin for mid-year release. Lord is the Sisel Fellow in Strategy, director of the Flow Institute for International Studies and director of the China program at the Babcock Graduate School of Management.

What intrigues you about China’s potential?

China is stereotyped as a communist, bureaucratic and hierarchical culture. It’s typecast as a Dickensian factory, filled with underpaid and unskilled workers, toiling overtime at repetitive manual labor, and producing poor quality widgets or, worse yet, counterfeits. The truth is much more complex. China has become fertile territory for a rich flowering of creativity and innovation. In some regards, it’s on the leading edge globally.

Why is China becoming more of an innovator, not just a copier of technology?

It’s driven by both society and psychology. Necessity is a powerful motivator, and China has huge environmental, energy and resource needs. New technologies and creative alternatives are the only possible solutions. Period. Scale also matters. China is so big, it can do things that would be impossible to imagine elsewhere. Leadership also is critical. The State Council recently declared that China henceforth will be an innovation-driven society. When the State Council speaks, the country listens, and money flows. China has trillions to invest.

What impact did the Olympic Games in Beijing have on our perceptions of China?

The Olympics highlighted not only China’s big ambitions, but also its ability to deliver on these aspirations — the art of the possible. It was difficult not to be impressed by the Games. As a developing country, however, China still faces formidable challenges, ranging from product safety to human rights to Tibet.

Does China have an emerging creative and entrepreneurial class?

China remains authoritarian. But the country’s tolerance of creativity and diversity and its encouragement of entrepreneurship have increased remarkably — as long as one steers clear of politics. Political repression is stifling, but it redirects abundant energy into everything from architecture and art to fashion and music; a sort of ‘China chic’ is emerging, for example. China aspires to be a soft cultural power, not just a hard economic and political power.

What are some of the distinguishing features of this emerging culture?

Several things stand out. First, China is more of a blank slate, especially for Gen X and Gen Y. The Old China is gone, but the New China has yet to be defined and refined. China is searching for its soul. This creates a lot of ferment and experimentation on a broad canvas of possibilities. Second, pragmatism prevails. Just do it. If it works, use it. As the saying goes, what does it matter if the cat is black or white, as long as it catches mice? Third, there’s a dynamic, ongoing integration of China with the rest of the world. What’s emerging in China is a rich and fascinating global fusion.

How can the U.S. compete with the rise of China on yet another front?

The U.S. needs to reprioritize innovation from A-Z. Regarding China more specifically, cooperation certainly is preferable to competition. Crafting long term win-win exchanges and partnerships is likely to be more productive on issues ranging from politics to business, from human rights and the environment, to education and innovation. Whatever our ongoing differences, China sees itself as sharing many interests with the U.S. and has a large reservoir of goodwill. Competition and conflict instead threaten to be a huge lose-lose proposition for both sides. Innovation is about creating new value, after all, not about fighting over the old.

How responsive is China towards developing relationships with U.S. businesses?

Many American firms are China’s preferred business partners, as well as the preferred global employers for much of China’s top talent. Chinese consumers also tend to view American products and services quite favorably. Unfortunately, the Chinese would like to invest and partner much more in the U.S. itself, but do not feel very welcome. They’re also very cynical about the whole U.S. financial sector, having recently been burned like everyone else. It’s ironic that the U.S. pushed free market ideology on China for years, and now the president of the Dallas Federal Reserve Bank argues for massive government intervention in the U.S. economy, quoting former Chinese leader Deng Xiaoping!

How can Wake Forest prepare students for emerging markets like China?

Openness and awareness are a great start. For example, much of China’s innovation and talent springs from American-educated and U.S.-experienced Chinese. Familiarity tends to breed trust and understanding and helps build good friendships and strong working relationships. The result is cooperation and win-win possibilities, rather than stereotypes, suspicion and conflict. We see very similar and powerful phenomena in other emerging markets, such as India, as well.