Mon, 02 Oct 2023

BEIJING, June 2 (Xinhua) -- Innovation has helped China to transform from the factory of the world to an innovative factory of the world, Carl Fey, a professor of strategy at BI Norwegian Business School and former Dean of Nottingham University Business School China, told Xinhua in a recent interview.

"Chinese firms used to concentrate more on efficiency than their competitiveness in the past two decades, but as the Chinese government now switches to high-quality growth, the country has seen quite some improvement in its innovation capabilities," said Carl Fey, citing the Global Innovation Index released by the World Intellectual Property Organization and the number of patents that China filed.

In 2022, China moved up to 11th place in the Global Innovation Index, 23 places higher than its 2012 ranking. It also secured the top spot for global patent filings in 2021, way ahead of all other countries, according to the World Intellectual Property Indicators report.

Carl Fey took China's electric vehicle industry as a typical example to show how innovation has helped the country achieve high-quality growth. He noted that Chinese companies have made breakthroughs in cutting-edge green technologies and taken the lead in the new energy vehicle (NEV) field.

"About a decade ago, Chinese companies seldom regarded green development as their focus," he pointed out, "However, now green innovation has become a common theme that average Chinese people, companies, and the government are interested in."

Carl Fey believes the government's sound planning, strong support, and great vision of developing electric vehicles has pushed domestic companies to become a leading force in the area.

Data from the China Association of Automobile Manufacturer showed that the country's NEV sales expanded 110 percent year on year to 636,000 units in April, taking up 29.5 percent of the auto market. NEV exports came in at 100,000 units in April, up 28.6 percent month on month.

Though China has made substantial progress in its overall innovation capabilities, Carl said there is still much space for Chinese companies to achieve real innovation, as a report from Clarivate showed only two Chinese companies, Huawei and BOE, were listed among the top 100 global innovators in 2023.

In Carl Fey's recent study of 200 Chinese companies on what management practices could help them to be innovative, he found out knowledge management is a key driver of innovation.

"In Chinese companies, information usually flows well vertically from top management to average employees and even not so bad from the bottom up. However, knowledge does not flow well horizontally in most Chinese organizations such as from the sales department to the engineering department, and this hampers innovation," said Carl Fey.

He suggests Chinese companies prioritize knowledge management and adopt flatter company organizations to achieve more extensive innovation.

Carl Fey has expressed his optimism about China's economy, given the country's optimized epidemic response and evolving innovation capability.

"I am quite confident about the outlook of China's economy, and we are going to see some extra spending from the Chinese people," Carl Fey said, adding that the country will make more contributions as its evolving innovation capability will become a new growth engine.

"The best is yet to come," he said.

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