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Intel Innovation Day - Steve Mushero 2October 27, 2008
Questions to Think About
Can China Innovate ? Does China Innovate ? If it does, How ? When ? Why ? What helps the process ? What hurts the process ? How to do more ?
Intel Innovation Day - Steve Mushero 3October 27, 2008
Who is Steve?
Entrepreneur - Founder & CTO of ChinaNetCloud Was CTO of Tudou (土豆网的首席技术官 )
Inventor Several U.S. patents
Author Off-Shoring, Macroeconomics, & Innovation Public Policy
CTO / Chief Architect for 20 years Silicon Valley, Seattle & New York tech companies Fortune 1000 Manufacturing Companies United Nations/World Health Organization Finance / Insurance (U.S.) & Micro-finance (India)
Intel Innovation Day - Steve Mushero 4October 27, 2008
What is Innovation?
Harvard Business School:“Innovation is the embodiment of knowledge in original and valued new products, processes, or services”
Note the key words: Original New Value
Intel Innovation Day - Steve Mushero 6October 27, 2008
Can China Innovate ?
Lots of questions and doubt Comparisons with Asian Tigers & Japan Kodak: “Kodak has a culture of innovation.
Yet, there was a noticeable non-participant in our culture of innovation and invention. China.”
Quote: "Oh no. Nobody invents here."
Intel Innovation Day - Steve Mushero 7October 27, 2008
Individual Challenges
Why not patent: "It's a waste of time. Someone who has money will just take your idea and make the money. You'll get nothing.”
Why not innovate: “I have my job to do, as so does my management. We all work very hard. My job is to do what they tell me, not tell them what to do or question their judgment. If I had such a worthless employee, I'd...”
Intel Innovation Day - Steve Mushero 8October 27, 2008
China only copies things And often not very well Education too rigid Culture too limiting Confucius still lives No risk-taking No initiative Criticism Face
Innovative Challenges or Myths ?
?
Intel Innovation Day - Steve Mushero 10October 27, 2008
Of Course China Can
Long List of innovations, Long Ago Silk, Weaving, & Fine Cloth Porcelain, Abacus, & Gun Powder Compass, Printing, & Paper Tools (popular in Rome) Civil Service / Merit-Based Exams
Probably the world's most innovative culture through history, amid great challenges
China's innovation was so dominant, the opium wars were started to balance trade
Intel Innovation Day - Steve Mushero 11October 27, 2008
How & Why Did They Innovate?
China has a very long and difficult history Innovation from necessity
Lot of people to feed, clothe, & house Lot of war to test weapons & tactics Lot of ocean to explore & trade across
With strong education system Very smart people, working very hard But, declined during Qing Dynasty May seem long ago and far away
But today’s innovations are for the same reason
Intel Innovation Day - Steve Mushero 12October 27, 2008
Innovating-Limiting History
Opium Wars (1800s) Foreign Occupation (Treaty Ports) Republican Revolution (1911) War of Resistance (抗戰 - WWII) Civil War (~1945-1949)
Cultural Revolution (1966-1976) Effects are still with us
Intel Innovation Day - Steve Mushero 14October 27, 2008
What about Today ?
Educational system - one-way Hierarchical Decision Making -老板总是决定 Confucius still lives – decisions are one way Risk-taking – one-way Therefore limited initiative Therefore a fear of failure
Criticism Loss of Face
Good enough vs. optimal No patience for innovation’s improvements
Intel Innovation Day - Steve Mushero 15October 27, 2008
Generational Differences & Gaps Age 40 and above
Protect self & family Lack education, but not effort & determination Fast-moving, fast evolution, innovators
Age 20-30 – Future of the world Western influences China will rule the world Parental & society pressure
Age 30-40 – Cautious Western-leaning In-between, but future leaders Often leaving technology for business
Intel Innovation Day - Steve Mushero 16October 27, 2008
What about Today ?
4-2-1 Family Pressure, Support & Motivation Risk-Aversion, similar to India Move to management, business, entrepreneur
Deprives society of best technical minds Lack of self-funding for risk, startups
Startups not rewarding innovators with riches Not recycling talent like Silicon Valley
Everyone wants to get ahead, now Stimulates real innovation – new companies Limits real innovation – no patience to innovate
Intel Innovation Day - Steve Mushero 17October 27, 2008
Education <> Innovation
Education #1 priority for centuries World's first merit-based promotion system But, how was & is merit measured ? Standard tests Teaching to the test Thinking to the test Following Confucius to
the Test
Intel Innovation Day - Steve Mushero 18October 27, 2008
Question is, does China innovate today?
Answer is Yes Not often in Technology, but in Business
Tech vs. Need vs. Opportunity Innovation Chinese Capitalism restarted from scratch
Enormous progress, matched for China Still missing a lot of Western infrastructure
Credit Cards, Postal Delivery, etc. Dynamic regulatory frameworks
Evolving rapidly, often in non-obvious ways Still lots of challenges, every day at every level
Intel Innovation Day - Steve Mushero 19October 27, 2008
Innovation Still in Early Stages
Lots of business and economic innovations China has, and will have, tech innovation
Solve real needs P2P, user scaling, infrastructure
TenCent/QQ, PPLive
Companies like Trapeze coming to tap into long-term innovation and talent
No longer just a cheap staffing (“Body Shop”) Western companies can help build
innovation culture
Intel Innovation Day - Steve Mushero 20October 27, 2008
Modern Examples
All around us Often masked by Western perspective Sometimes importing & improving for China
On-Line Video Finance / Payment On-Line Gaming Social Sites
Intel Innovation Day - Steve Mushero 21October 27, 2008
Tudou - 土豆网 China's largest video site OLDER & BETTER than YouTube More features than YouTube, earlier Playlists, channels, mini-sites, wikis More difficult tech & regulatory environment No tech innovation – serve the people’s needs Subtitle innovation Focus on entertainment Future of Global video entertainment
China is far ahead of the world, and is the future
Intel Innovation Day - Steve Mushero 22October 27, 2008
Finance / Payment Systems
Innovation in the face of obstacles Must innovate to build E-Commerce
Break of out family / friend / trust circles No typical payment systems – Credit, Check Cash On Delivery – Scooter-man Escrow (Alibaba)
Intel Innovation Day - Steve Mushero 23October 27, 2008
Gaming
China the Global On-line Leader & the Future Difficult environment
Piracy vs. Console & PC Games Importing some creative parts Surprise Innovation – Make Everyone Pay !
Not a natural Chinese feature Casual Games – Real innovation
Better Merchandising than Wal-Mart Ecosystem – Ops, Billing, Ground Forces
Intel Innovation Day - Steve Mushero 24October 27, 2008
Social Networks
Early copies of American sites – MySpace Many Chinese innovations Making connections important Single children seeking independence Chatting / interacting important
Intel Innovation Day - Steve Mushero 25October 27, 2008
What's Driving Chinese Innovation
Matching business environment with culture Need-driven – just like 500 years ago Speed is life – going slow can be death Loose structure – no planning, just do Risk taking – but only by the boss Competition – lots, so must find an edge Use Information – Internet helps everyone Lower costs – Allow faster try/fail cycles,
and parallel efforts
Intel Innovation Day - Steve Mushero 26October 27, 2008
Characteristics of Innovators
Often Renegades & Delinquents Often poor in school – Einstein & Edison Einstein wrote “The spirit of learning and
creative thought were lost in strict rote learning”
Believe in an idea and follow it Innovator's Habits - Look at crazy ideas for
longer, test, think broadly Think of it as exploration See book “Double Helix” about discovery
of DNA – followed unpopular hunches, ad hoc intuition
Intel Innovation Day - Steve Mushero 27October 27, 2008
Leading Innovation in China
Leadership important at every level School/Corp/Life – People wait for instructions
They go step by step, then wait and see Support initiative, even in the face of resistance Set goals - “Barely works” vs. “Real Solution” Support vs. Criticism Let failure teach lessons
Intel Innovation Day - Steve Mushero 28October 27, 2008
Leading Innovation in China
Every innovation rule in the West applies But even more important
Think about Brainstorming Rules Listen Don't interrupt Don't criticize Let ideas run
Support new ideas and people Reward innovation every way possible
Intel Innovation Day - Steve Mushero 29October 27, 2008
Fostering Innovation in China
Young people are the future Encourage them every day
Hire the mavericks & dreamers And a good weirdo or two Don't wait for the boss
Everyone needs to pull the innovation carriage
Intel Innovation Day - Steve Mushero 30October 27, 2008
Fail Early & Often
Apple iPod – Newton was a big failure Sony had iPod earlier, but innovation failed Post-it notes took 6 years, failed
until marketing met science Learn to support failure Mistakes will (and have to be) made Learn from failures (via reports) Use case studies & research to show that
failure creates success
Intel Innovation Day - Steve Mushero 31October 27, 2008
Financial Incentives Important
Parents & culture drive financial security Show that innovators don't need to move to
management or leave to start a company Consider huge rewards for new ideas Spread the wealth to those who create it Consider policy like the U.S. Bayh-Dole Act
Required to share royalties with inventor Major driver of U.S. university innovation
Intel Innovation Day - Steve Mushero 32October 27, 2008
Work for IP Protection
Chinese IP System improving Useful for big technology companies? Chinese assume it’s not that useful Also not helpful for business
models, payments, games, or ways of thinking
So move faster, bigger risks And innovate more, stay ahead
Intel Innovation Day - Steve Mushero 33October 27, 2008
Finally
“Think like a child”
Picasso said: “We are all born creative; the challenge is to stay creative when we become
adults.”
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