China's Quest for Innovation by Shuanping Dai Markus Taube

Author:Shuanping Dai, Markus Taube [Shuanping Dai, Markus Taube]
Language: eng
Format: epub
ISBN: 9781138497146
Barnesnoble:
Goodreads: 51773618
Publisher: Routledge
Published: 2019-11-11T00:00:00+00:00

4 Conclusions

A country’s innovative capacity and its competitiveness is frequently assessed based on indicators showing how strongly domestic actors contribute to the creation of (measurable) scientific or engineering knowledge, particularly in the most dynamic technological domains. The notion of architectural innovation, as it is understood in the present chapter, seeks to broaden this perspective. It does so by pointing out that fundamentally new knowledge is important but not necessary to induce consequential changes in the segmentation and status ordering of existing sectors. While radical innovations can very well reinforce the position of incumbent industry leaders, innovations that do not significantly alter the sector’s knowledge base can have quite disruptive effects. Even when it does not dislodge the incumbent industry leaders, it is often sufficient to help firms establish a viable position within the sector, while it may impose new market segmentations and a new division of labor. Architecture-based innovation strategies are frequently embedded in broader sectoral ecologies. If so, then distinct national patterns of architectural innovation can result from (initial) differences in industry structures. These differences are not only effective in providing domestic firms the means to alter general sectoral trends but also to push trends further than elsewhere or into particular directions.

While innovative activities in the Chinese context have not altered established sectoral paradigms, the domestic setting allows firms to push ongoing sectoral trends toward an exceptional degree of openness – as evidenced by the comparatively high level of design and manufacturing task externalization. China’s distinct pattern of architectural innovation has emerged as an effect of the interplay of three factors. First, modularization has taken hold as the dominant cognitive frame in many industrial sectors, including the focal passenger vehicle sector. This ongoing general trend by itself entails an increasing disintegration of relevant tasks and a search for outsourcing opportunities by the leading system integrators. Second, the domestic development of a comprehensive population of supplier firms, including local branches of virtually all major transnational leaders and a wide range of domestic firms, accompanied by very high localization rates and high levels of competition have rendered it easy to shop domestically for all product-related parts and components. Third, the effective feasibility of using existing car models as reference designs has introduced a system of de facto standards that enables industry-wide component sharing. The resulting modular markets are generated and reinforced by the innovative efforts of component producers and newly appearing system integrators alike.

Although it would be far-fetched to argue that the Chinese innovation strategies in the automotive sector will help domestic firms to displace the global industry leaders in the near future, it would be grossly negligent to underestimate their effect on the segmentation of the sector and the position of component suppliers in the sector’s dominant division of labor. The ferment of companies with similar mix-and-match architectural strategies bears the potential to reconceptualize the car for a low-income demand that is located at “the bottom of the pyramid” (Prahalad, 2006) and lacks a strong “automobile culture” (Kimble and Wang, 2013; Tyfield et al.

Download

Copyright Disclaimer:
This site does not store any files on its server. We only index and link to content provided by other sites. Please contact the content providers to delete copyright contents if any and email us, we'll remove relevant links or contents immediately.