Disruptive technology, China main incubator and manufacturer

Look at the host of new technologies:  Most of these are incubated, patented and produced by none other than China. Artificial intelligence & machine learning, quantum computing, 5G connectivity now being morphed into 6G, automation & robotics, virtual & augmented reality, techno without humans in the loop are the buzz words in disruptive techy.

Moreover, China is galloping in every aspects of geoeconomics where e-commerce, BeiDou satellite positioning system and 3D printing carry the China badge proudly. Some of these have hybrid applications. For example, China's BeiDou satellite positioning system has overtaken the West in big stride to present high security threat. So is Cyber capability and enmeshing man with machine technology. Advances in electromagnetic system makes China the first power to incubate, develop and operate in real warfare situation. As my interest lies on business strategy in relation to geoeconomics let me speak about business applications only.

What is disruptive technology anyway? The best answer is found in Investopedia. “Disruptive technology is an innovation that significantly alters the way that consumers, industries, or businesses operate. A disruptive technology sweeps away the systems or habits it replaces because it has attributes that are recognizably superior.” (Here) Moreover Investopedia traces that “upstarts rather than established companies are the usual source of disruptive technologies”.  That fits China well because unlike the West, she had achieved top line status within the last four decades compared to the West taking more than two centuries.

What is the template in which China has taken this task forward? When Deng Xiaoping opened China to the outside world in 1979 he made it a conditional one: China provides cheap & abundant labour while west brings in capital investment and facilitates technology transfer. That did the trick. Chinese are fast learners. Initially they groomed well in the bought-in techno then allowed students to go abroad to prestigious universities to study all aspects of business and the technology required. China understood the value chain process in terms of technology, procurement, inward logistics, operations, outbound logistics using the army of Chinese in training, operations and thereafter scaling the heights in sales & marketing.

By the time students who went abroad graduated and returned to the motherland, they were employed to do further research and invent new forms of doing the old activity. The incubation process was a remarkable success. Newer and modern methods of producing exportable items were being constantly invented and put on trial. As a result a new animal was born. It is no longer a western based technology but indigenous ones that had all the ingredients of modern techy surpassing what is currently available say in USA & Germany. By now, capacity building has been successfully completed; then the Chinese Communist Party (CCP) intervened:

CPP dictum is that an end-product must be produced for local population, which is by now improving in living standards and demanding products with advanced features. From domestic market companies quickly graduated to the export market where these modern features are not available at all or are too expensive to buy.

This template was further tweaked to go from small quantity to large ones, copying & re-engineering to indigenous innovation. When these two brought satisfactory results, companies were urged to get the big deal not only for the consumer items but infra-structure such as telecom rail & road network especially high-speed rail and automated trains. However the centrepiece remained same: understanding what customer wants and how to satisfy it with least cost.

Needless to say, China tech companies have no worthy rivals in the west now!

 

Cheers!

 

Muthu Ashraff Rajulu

Business Strategist

Mobile: + 94 777 265677

E-mail:   cosmicgems@gmail.com

Blog:   Business Strategist