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The Trouble With China's So-Called Pursuit Of Innovation

China talks the talk when it comes to innovation, with recent national conferences on the topic attended by high-ranking Communist party leaders. But scratch the surface, and you'll find something that is the very opposite of innovation.

Good tech never dies (derekGavey)
Good tech never dies (derekGavey)
Ma Yu

The Central Politburo of the Communist Party of China held a meeting in May to discuss the deepening of scientific and technological reforms, as well as ways to accelerate the establishment in China of a true system of innovation. The meeting set the goal of China reaching the ranks of the world's most innovative countries by 2020.

Innovation has long been talked about in China. It is a timeless topic. Nevertheless, it's the first time a top-level meeting has been devoted to the issue.

Earlier this month, the National Science and Technology Innovation Conference was held in Beijing, gathering most of the members of China's top leadership. One can imagine that in the Chinese context the term "innovation" will continue to be a hot button word for a long time in all of China's political, economic, cultural and social fields.

In fact it's not just in China. Innovation has become a hot issue across the whole world. Some have said that the word "innovation" is employed so often, in so many ways, as an affirmation that one is at the forefront of one's field, that the term has been abused.

According to a statistic from Amazon, in the last three months alone, as many as 250 newly published books include the word "innovation" in their titles. They are mostly books about business. Another search result based on the annual and quarterly reports submitted to the U.S. Securities and Exchange Commission last year also shows that each of these company reports had used the word "innovation", in different ways, a total of 33,528 times. This represents a 64% increase over five years ago. Apple, Google and Procter & Gamble, three distinct types of companies, used the word 22, 14, and 22 times respectively in their most recent annual reports.

And yet, what the vast majority of companies mean by innovation is not truly innovation but just ordinary progress. Or worse, it's a pretense.

The purpose of flaunting innovation at a company is obvious. First, by misleading the capital market and raising the value of its stock, the company can reduce its financing costs. Second, it's a way of promoting itself in the consumer market. An image of innovation improves the corporate reputation and can be considered de facto as a marketing tool. Regardless of their real corporate innovation results, at least they have more or less achieved their aims -- and certainly won't be left out of the current search for innovation.

However, a country's innovation is much more complicated. It's beyond reproach for the government to make innovation a priority so that people and businesses recognize its importance. Nevertheless, in the Chinese context, there seems to be something missing: the establishment of a system and environment for innovation.

Animated example

Take China's animation industry as an example. Recently an animated film called "The biography of Qi Jiguang," about a 16th century hero who fought against Japanese pirates, was released. The film was supposed to be an "epic" that cost millions to produce. Yet the quality was worse than the level of amateur-made films on the Internet. Needless to say that it was a disaster at the box office.

According to professional sources, this is because today's Chinese animation production is making money from its relationship with the government, not from the market. The government's slogan of "Constructing a cultural power" has prompted authorities at all levels to introduce a series of incentive policies, including broadcast subsidies.

The result is that so-called animation industrial parks are springing up everywhere that are basically a local authority's front for enclosing farmland for urban development, as well as bait for getting government subsidies to pump up their local finances. Nothing is really being done to develop an innovative animation industry.

As a consequence, China's annual animation output today is as much as 200,000 minutes, which surpasses Japan and makes it the world's biggest producing country. But when it comes to quality or influence, even the Chinese professionals are ashamed to talk about it.

This is precisely the key problem with China's innovation. Government-led innovation has high cost and poor results, or worse, the money can go astray. Not only does it not encourage or promote innovation, but it actually restricts and suppresses creativity. For cultural innovation, the ultimate importance lies in the freedom of creation, the protection of intellectual property, not financial subsidies or land concessions.

Unfortunately, China is going exactly the opposite way. Due to the restrictions on the freedom of creation, quality production with real ideas, connotations, creativity and imagination does not emerge. At the same time, when a good animation production does occasionaly appear, it is immediately pirated because of inadequate copyright protection. Meanwhile, subsidies and land concessions have become the tools of official rent-seeking as well as improper businessmen's profits.

As far as we see from the current development of China's animation industry, the billions of RMB that are invested by all levels of government through funding and other sources are not bringing the expected positive effects. On the contrary it does more harm than good. One wonders if it is exactly the same case with innovation in other fields?

Read the original article in Chinese.

Photo - derekGavey

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