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Don’t just make gadgets – try to change the world! [Interview with Bill Dodson]

Madanmohan Rao
posted on 21st October 2012
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bill_dodsonInterview with Bill Dodson, author of “China Fast Forward”
Hardly a day goes by without mention of the rise of Asia, particularly China and India, as the next economic and innovation frontiers. Bill Dodson is the author of the books China Fast Forward: The Technologies, Green Industries and Innovations Driving the Mainland’s Future(see my review on YourStory.in) and China Inside Out. He is a prolific columnist on economics and industry issues for the China Economic Review, and a principal at TrendsAsia, a Shanghai-based investment analysis firm. Bill joins us in this exclusive interview on the innovation ecosystem in China, and importance of pro-innovation policy in emerging economies.

Q. Your comparisons between the innovation paths of India and China were interesting and informative. Do you see much cooperation between India and China in innovation and co-creation, or do they see each other more as competitors and arch-rivals?

I do see the two as more rivals, part of which has to do with the scramble for resources for which the two largest populations in the world are vying. And then, the elite of both countries are more interested in presenting trophy projects and statistics to the world than creating an environment in which real innovation on the order of the Renaissance can flourish.

Q. Most of the case studies in your book feature big companies in China; what are your findings with regard to small startups?

I recently visited two small companies in Beijing that were truly thinking imaginatively and attempting in their own small way to make an impact on their industries. One was a solar water heater design and manufacturing company with a truly innovative approach to the use of materials and designs to personalise solar water heating.

The other was a performance school for toddlers to help them and their parents break out of their emotional shells to learn a different sort of self-esteem and develop the ability to express themselves more freely than traditional curricula support.

Q. What are the typical challenges entrepreneurs in China face as they scale up? How can these challenges be addressed?

China is a dog-eat-dog business environment. There is little in the way of cooperation between small companies involved in innovation efforts, and big companies simply want to snuff out or absorb small companies that come onto the radar of profitability. In many instances, State-owned Enterprises are the major culprits in stifling home-grown innovation. The unwritten policy of guojin mintui - the State advances while the private retreats - is a major inhibitor to developing innovative products through small businesses.

Only the central government can effectively dissolve these challenges, as the government is policy maker and regulator and consumer and producer. Conflicts of interest abound in such an environment that sap creative initiative.

Q. What trends do you see in venture capital movement from the US to China? Are VCs investing in new local business models of startups, or do they prefer replicas/variants of mature models from Silicon Valley?

Money isn't really moving from Silicon Valley to China: most of the money is already in China. The VCs in China are looking at how to adapt foreign innovations - some of which are quite disruptive to society and business - to the China market. After all, China is the largest, most rationalised consumer base in the world.

Q. How are the current and next generations of entrepreneurs in China positioned to take the country ahead? Has exposure to the global Internet made young Chinese more receptive to openness in cooperation and co-creation with the West?

Chinese Internet entrepreneurs suffer a host of self-inflicted limitations that make it difficult for them to collaborate with companies in the West. One issue is the Great Firewall of China, for which special software is required to access various sources outside the country. Internet speeds suffer incredibly in China because of constant monitoring and filtering of data that enters, exits and circulates within the GFW.

Another challenge is the dearth of English language skills of programmers: all the innovations and developments in programming technologies, techniques and methodologies are in English. Chinese programmers have to study up on their own, which reduces productivity immeasurably.

And then, because Chinese are traditionally risk-averse when it comes to creating something unique from scratch, copying and adapting developments is far easier and cost effective for them. And because the Chinese economy is so large, they are still bound to make some money even though they may not have created something original.

Q. Who are some of the entrepreneurs you admire the most?

I only have authors as role models and individuals I admire. The world needs new thinking; not more gadgets.

Q. What scope do you see in the innovations and globalisation of Chinese telecom companies such as Huawei and ZTE?

I still do not see Huawei and ZTE as breakthrough companies, except insofar as they've been able to squeeze the cost out of products that have a basis in technologies that are decades old in the West. Incremental adaptations to technologies have their place in making a profitable company, but not necessarily in changing the world.

Q. How about traditional Chinese medicine, and Chinese cultural/entertainment fare? Is there good global scale possible for them too?

Chinese medicine is big with the alternative medicine followers in the West and with the diaspora of older Chinese. The country's cultural and entertainment fare will always do well with the Chinese diaspora and with non-Chinese who have imaginings about China they would like to explore.

Q. Which emerging economies do you think have the right attitude and policies towards global/local innovation?

I don't think any national government has it right, frankly. I think there are innovation bubbles at local levels that work; however, from a national policy point of view, politicians and technocrats tend to introduce conflicting government interests into the mix that obfuscate the development of national innovation efforts.

Q. What were some of the responses and reactions you got when your book China Fast Forward was released?  

I had actually been talking about many of the issues in China Fast Forward to Western and Chinese audiences before publication of the book. Both groups were more surprised than any other in response to the findings.

Q. What is your next book going to be about?

I'd like to do a book on all 13 of China's neighbours (including India): travel to them, talk with the locals about their feelings about China, and discuss geopolitical relations between China and each of the countries: a sort of cross between a Paul Theroux travel book and a survey from the Economist Magazine!

Q. What is your parting message to the startups and aspiring entrepreneurs in our audience?

Try to go beyond just making the next gadget to truly effecting change for the better for your society and, possibly, the world!

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