03
01
EXECUTIVE
SUMMARY
Innovation is vital for future growth in China
The times when China could prosper by simply drawing
on excess low-cost labor are over. Today the country
is transforming into an innovation powerhouse and
Multinational Corporations (MNCs) must keep pace
to catch up with local competition. This report aims at
providing companies with a framework for shaping
their individual road maps toward innovative product,
service and business models.
MNCs are realizing the significance of innovation
but lack operational development
Innovation in China is among the top priorities of MNCs,
who have started to recognize the importance of innovation
for customer-specific products. Yet the majority
have no well-defined innovation road maps in place.
Barriers to innovation can be overcome
Barriers to innovation reduce the overall speed of
progress and might stem from a lack of innovation skills,
intellectual property concerns and restrictive headquarters.
However, barriers are not set in stone and proactive
measures can help to move beyond them.
Self-assessing capabilities help to identify
the missing part for driving innovation
Identifying and benchmarking one’s own innovation
capabilities raises awareness of strengths and weaknesses
regarding innovation performance. By using
goetzpartners’ Innovation Benchmarking Tool, concrete
areas for improvement can be derived and the remaining
parts of the overall innovation strategy added.
A concrete plan is required to systematically
translate innovation into action
A well-structured innovation road map is a prerequisite
for driving innovation further and helps MNCs add the
missing parts to their puzzle of innovation. This includes
not only China-oriented product management, but also
close cooperation with the international headquarters
regarding product engineering and the overall product
pipeline. By pursuing a clear innovation strategy, MNCs
can evolve from import oriented companies into global
innovation motors.
Methodology
The opinions and data presented in this report are based on goetzpartners’
work experience with multinational corporations in China. In addition, a
comprehensive innovation survey was jointly undertaken with our partners
from renowned Chinese institutions. In cooperation with Professor Zheng
Han, Chair of Innovation and Entrepreneurship at Tongji University, and the
German Chamber of Commerce in Shanghai, we interviewed more than 100
German corporations operating subsidiaries in the Chinese market, with
two thirds of them being present in China for more than ten years. Although
the survey focused primarily on the automotive and industrial sectors, many
of the lessons can be applied to other industry segments as well. In addition,
the results of the survey made a valuable contribution to the development
of the goetzpartners’ Innovation Benchmarking Tool.
86%
SENIOR EXECUTIVES
41%
AUTOMOTIVE
50%
25%
MACHINERY/
INDUSTRIAL
EQUIPMENT
TURNOVER >RMB 250M
8%
INDUSTRIES
87%
MNCS
METAL/
PLASTIC
PRODUCTS
69%
7%
CHEMICALS
> 10 YEARS IN CHINA