Chinese companies take innovation path in efforts to globalize
This is according to a report conducted by the World Economic Forum in collaboration with Strategy& (a part of the PwC network).
The Emerging Best Practices of Chinese Globalizers: Develop the Innovation Models report was based on a series of comprehensive interviews and surveys of 120 Chinese globalizing companies conducted over the past 12 months.
Half of the surveyed companies are regarded as globalization champions within China that have outpaced their peers in establishing global presence.
In analysing how innovation contributes to these companies’ globalization efforts, the report unravelled a dual-path framework. In the first path, companies become successful innovators in the domestic market first and then leveraged their advantage in innovation on the global market.
In the second path, companies successfully expanded within the global market first and then leveraged its resources to enable innovation for long-term development.
According to Strategy&, over 45% of globalization champions put innovation as their top priority in overseas strategy; more than 80% focus on business model innovation to satisfy customer needs, and one third of them employ 50% or more local employees.
China’s outward foreign direct investment (FDI) has seen significant growth over the past two years as Chinese companies have continued to invest overseas, rising to $108 billion in 2013 from $88 billion in 2012.
In addition, the government continues to propose new international cooperation frameworks such as the Silk Road Economic Belt and the 21st Century Maritime Silk Road to facilitate economic cooperation with other regions and countries, providing favourable international circumstances for Chinese companies to go global.
These and other such macro policies and economic incentives will continue to facilitate the globalization process of Chinese companies. ■