With the emergence of China as a powerhouse of business innovation, the D'Amore-McKim School of Business has recruited as a Distinguished Visiting Professor George Yip, renowned expert and author on global strategy and also Chinese business practices.
“There is a misperception in the U.S. that China imitates rather than innovates,” says Yip, who joined the Northeastern faculty in March as a Distinguished Visiting Professor in International Business & Strategy. “The reality is that China is a world leader in manufacturing-based innovation, whether it's the self-cleaning solar panels developed by Suntech or the first foldable smartphone created by Royole.”
Yip contends that U.S. based multinationals can learn valuable lessons from Chinese business practices, particularly those that promote rapid innovation based on perfecting existing breakthroughs.
“The Chinese are very good at taking an invention and steadily innovate on it,” says Yip.
For example, although the Chinese company DJI didn't invent drones, it now commands 70 percent of the world market due to manufacturing-based innovation that has made drones faster, more durable, and capable of carrying heavier loads.
“The U.S. knows that manufacturing is important, but still thinks about it primarily in terms of job creation,” said Yip. “In fact, it is also an essential element in the innovation process.”
According to Yip, manufacturing prowess enables rapid prototyping and allows China to get new products to market quickly. Rapid innovation is further enhanced by China's massive consumer market which makes new products instantly scalable, and a tech-savvy consumer base that is “extremely adventurous” when it comes to trying new things.
The overall effect is a business culture where companies are prepared to “fail fast” and adjust quickly.
“The biggest challenge from China is its willingness and ability to take risks,” says Yip. “Western multinationals can benefit from including China in their ecosystems by establishing R&D and other innovation centers in China itself.”
In his most recent book, Pioneers, Hidden Champions, Change Makers and Underdogs: Lessons From China's Innovators, Yip and his co-authors studied more than 200 Chinese companies that are challenging the West through rapid innovation.
“The book serves as a warning to Western companies that the future pressure from China is not coming from a handful of giant companies, but from the thousands of emerging innovators that are operating under the radar,” says Yip.
In addition to his professorship, Yip serves as a Distinguished Faculty Fellow at D'Amore-McKim's Center for Emerging Markets, where he has teamed up with another new faculty member, Michael Enright, to expand the university's China expertise.
Yip has published more than 70 articles, a dozen books, and delivered more than 100 keynote addresses around the world. He is the former dean of the Rotterdam School of Management in The Netherlands and a former faculty member at Harvard, Georgetown, UCLA, Cambridge, London Business School, and China Europe International Business School, and an emeritus professor of Imperial College Business School, in London. His many accomplishments were recognized on September 18 this year when he was inducted into the Thinkers50 Hall of Fame, as one its 40 ever inductees.
“Western companies will benefit from opening their minds to the idea of China being a place to learn rather than solely a market, a supply base, a competitor, or a threat,” he said.