Understanding China, One Blog at a Time

An American in China

Innovators Dilemma and China-Keep on Pirating

Posted by w_thames_the_d on April 26, 2011

Clayton Christiansen wrote a book called The Innovator’s Dilemma. At its most elemental level, the book says that due to resource constraints, companies must choose where to invest. And, under those restraints, most companies will choose to invest in projects that have a quick payoff, those that will appease the shareholders. When they make this decision, which amounts to supporting current business, projects and products, they eschew the new and innovative. Thus, the rationale goes, if a company is committing so many resources to the tried and true, they have little to spend on the new and innovative. In addition, they reason, larger corporations stand too much to lose if they propose a project and it flops, whereas a smaller organization does not have this ‘stature’ and can take more chances.
OK, lesson over so you are thinking so the heck what?
Well, this is china. Think of it like this, Christiansen said that the company that made those large 5 inch floppies did not then make the 3.5 inchers etc. The original floppy makers had too much into the old tech so did not go after the new. So think of China, as long as they can steal tech and or copy it, they are taking resources that could be utilized in a much more effective manner. For all those DVD pirates, there is potentially a Prince or a budding artists, but for lack of vision, they will toil away in the subways of Beijing selling knockoffs. The same is true for the host of knock off pharmacy companies here. For pennies on the dollar you can buy their version of heart meds, Viagra, the latest in western goodies, but at what price? Of course the quality may be suspect, but what if those ‘pharmacies’ actually decide to be legit, think of the possibilities…
But then again this is china so it will not happen. They’ve been knocking things off for centuries, so why would they stop now.
Go China Go!!! Keep on Pirating!!!

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