Daily Archives: April 19, 2008

Can China Be Innovative? IBM Says “YES”

Can China be Innovative? I asked this question here on this blog about a year and a half ago after doing a fair bit of reading and research on the subject – which led me to the conclusion reached by Denis Simon of New York’s Levin Institute, that China risks becoming a good 20th-century industrial economy just when it needs to figure out how to be a 21st-century knowledge-based economy if it doesn’t move in the right direction.

The reason for this is that it takes more than a new science policy (as mentioned in the Economist article Something New: Getting Serious About Innovation, registration and subscription required), additional funding, a stemming of the “brain drain”, and a protection of intellectual property rights to build a knowledge-based economy – it takes a culture, and more specifically, a culture that fosters innovation, not conformity.

But it seems like IBM, who moved it’s global procurement headquarters to Shenzhen, China back in the fall of 2006, thinks that China is far enough down the road to open its first supply chain innovation center in Beijing. Dedicated to helping companies worldwide integrate and transform their global supply chain capabilities, the center will leverage the company’s expertise in supply chain research, business consulting services, software capabilities, and it’s own Integrated Supply Chain experience (which brought the company from the brink of bankruptcy in 1993 to a company that saved 6.2B in 2006) to create new solutions for companies around the world.

According to the press release, the Beijing Supply Chain Innovation Center will collaborate with companies to develop innovative solutions that include:

  • Virtual Command Center
    a SOA (Service Oriented Architecture) supply chain visibility solution that integrates and synchronizes supply, demand, and logistics information
  • Carbon Tradeoff Modeler
    that helps companies include carbon output foot-printing in their supply chain optimization efforts
  • Supply Chain Optimization
    tools and modelers that enable companies to design and operate agile and adaptable supply chain processes and networks

… and is available to be leveraged by any IBM client world-wide — immediately.

It’s a very interesting development. It means that the pockets of innovation are becoming larger and that China might be capable of accelerating down the innovation highway faster than one would expect. However, given that China, like India, contains a great disparity between its urban centers, which are rapidly giving rise to a new middle class, and rural areas, which are only beginning to taste the “new” China, it also means that China might be exacerbating some problems as it solves others. I don’t think we’re far enough down the road to make any calls yet, and this leaves me with my initial thoughts: it will be very interesting to see how this plays out over the next few years.