Aug. 16 (NBD) -- Against the backdrop of globalization, new industries, new business models and new technologies including artificial intelligence, big data, and blockchain have been emerging one after another in China over the past decade. Innovation has been the key label embodying the competitiveness of an enterprise or even a nation.
The 2018 Forbes China Innovation Summit on Wednesday kicked off in southwest China's Chengdu, a hub for technology and business, to share and discuss innovative development under the trend of new economy.
When looking at the history of business, an innovative cluster of businesses is typically built around one technology, Bob Daugherty, executive dean at the Forbes School of Business at Ashford University, told NBD in an exclusive interview.
Innovation drives new industries to grow, old ones to adapt
Living in California and having spent a lot of time in Silicon Valley, Daugherty introduced that the world's renowned innovation center, not only every week but every day, is attracting people from all over the world. And he recommended Chengdu to do the same thing by putting on this type of conferences and summits.
The Silicon Valley, an innovation ecosystem driven by information technology, has inspired many countries and regions to recreate their own version of innovative ecosystem. But few of them stand out. The reason why certain areas outperform others in development is, as Daugherty put it, the focus on innovation around typically one technology.
When Silicon Valley started, it focused on silicon chips and micro processor, and so all those companies within the ecosystem then built up. It was only 30 years later that people started to see the personal computer and then Internet-based companies.
In another case, Daugherty said, around Cambridge University, there is a similar cluster of businesses which is called Silicon Fen. The cluster is based on biotechnology, so some of the world's leader in biotechnology, Nobel winners and faculty members at Cambridge there and then companies spin off from that.
Daugherty also pointed out that enterprises from traditional industries are facing a major disruption, not only in the United States but around the world, as innovation fuels the development and application of cloud computing, Internet of things, AI and other new technologies.
When asked about how traditional firms cope with the challenge, Daugherty underlined the importance of allocating capital. Taking traditional retail stores as an example, Daugherty held that those companies should reflect upon their balance sheet and use those resources in a different way.
Shares of Macy's, a well-known department store chain in the United States, sank more than 14 percent Wednesday following a year-long run-up in the stock. Daugherty suggested "going online" for a turnaround, "if you are a shareholder of Macy's or on the Board of Directors, you should be saying, 'I want to take those precious resources and capital, and think about how to go online.'" Macy's was reported to being losing market share across a number of categories.
Bob Daugherty (Photo/Zhang Jian)
Technology progress gives birth to new business models
Talking about the reason that Forbes chose Chengdu to host the Summit, Daugherty noted that Chengdu is a city trying to embrace innovation in a profound way. One of the exciting things about China is that those major cities are competing with each other, and Chengdu is competing with many other important cities in China. That should get the animal spirits going, and the people of Chengdu are excited to find ways to differentiate themselves. Conferences like this one are great ways to spur that type of innovation, he added.
China's innovation was also a critical topic at the conference.
Wu Wei, partner of Maison Capital, said during panel discussion that China provides abundant opportunities for innovation of startups.
He explained that the development of technology brings forth new business models. For example, models such as ride-hailing platform Didi and lifestyle service app Meituan rose from the mobile internet. More new types of businesses will emerge after the 5G era comes. Therefore the constantly upgrading technology gives birth to a batch of new firms which will create new business models.
Wu further noted that startups should seize the opportunities brought by the rapid growth of technology. Firms need to evaluate their core technology and set up a team to adapt to the rapid technological progress.
David Zhang, managing director of Infinity Group, shared the similar view at the conference.
Zhang pointed out that the innovation for startups lies not only in technology domain but also in business models. Apart from those enterprises with leading technology, firms that achieve integrated and cross-border development will also have a chance to grow into unicorns.
Currently, cities around the world are competing for talents and innovative development. When commenting about the criteria of innovative talents, Daugherty held that talents need differentiate themselves and bring something different and special to the company or the city. They should purposely focus on developing themselves and skills in their knowledge base, but also thinking about how they are going to serve and help whether it's a company or another individual, he said.
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