German Business in China – Greater Shanghai Innovation Survey 2018/19
Incremental rather than radical
Half of the surveyed manufacturing
companies indicate that changes in products
and services in their Chinese entity are mostly
incremental. Only one fifth of respondents
claim to mostly engage in radical innovation.
A comparison of radical versus
incremental innovation between
Top Innovators and their less
innovative peers shows that Top Innovators
engage significantly more in radical innovation
than other companies (43% vs. 26%). They
appear to bring a higher willingness to take
risks.
Changes in products/services in
our Chinese entity are mostly…
Radical
Incremental
Top Innovators
16%
26%
43%
60%
Other companies
Product adaptation rather than product development
To what extent does your Chinese entity engage in the following activities?
Product adaption for the
Chinese market
29%
33%
10%
Product development for the
Chinese market
24%
18%
5%
Development of new products
for global market
19%
12%
3%
Rather large extent Large extent Very large extent
Innovation efforts of German manufacturing companies in the Greater Shanghai region
tend to lie in the adaptation of existing products to meet the demands of the local market.
72% of companies in our survey engage to a large (rather large, large, or very large) extent
in product adaptation. 48% engage to a large extent in product development, while only
34% develop new products for global markets. However, the latter saw a significant
increase compared to the 23% collected in the 2017 survey. This increase in local-toglobal
innovation activity shows China’s growing attractiveness as a R&D hub, although,
as revealed by the Business Confidence Survey 2017 1 , concerns regarding intellectual
property IP and technology transfer may still hinder R&D activities in China.
1
German Chamber of Commerce (2017)
29