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Innovation is Not an Accident – How China Turned Into a Tech Superpower (Review of Tech Titans of China)

This post is in part based on the 2019 book “Tech Titans of China: How China’s Tech Sector is challenging the world by innovating faster, working harder, and going global” by Rebecca Fannin. To purchase the book on Amazon, Click Here

In the fast, messy, and global world of today, one only needs to blink to open their eyes to a new reality. One such reality is the emergence of China as an entrepreneurial and tech powerhouse.

That China could be a world leader in innovation might sound strange to a generation of westerners who grew up knowing China as an imitator of advanced western tech. Yet, the China of today has produced such a robust tech scene, that ironically, western companies are now copying from their Chinese counterparts. 

E-commerce platform Pinduoduo and Messaging app WeChat are gaining recognition abroad. Bike-Sharing platforms are a Chinese innovation copied globally. Chinese advanced Electric car brands are beginning to make inroads in the US. 

It remains to be seen whether China will surpass the US in innovation. Regardless, China’s rise serves as an excellent case study for the power of innovative infrastructure and goal setting for innovation within an organization.

The Rise of Tik Tok

Consider the case of Beijing-based Tik Tok, possibly the world’s fastest-growing social media platform. Since its launch, the Tik Tok app has had over 1 billion downloads. In 2018, it was the number one downloaded app in the iTunes app store. And most surprisingly, much of its new growth has been in the US.

Tik-Tok allows users to edit and post 15-second videos about anything, whether it’s lip-singing or cooking tips. While Tik-Tok has been credited with “making social media fun again,” the app’s true innovation is its seamless blend of AI technology into its user interface. 

Rather than simply a Chinese take on social media, it is Tik-Tok’s advanced AI (that feeds content to users without requiring the user to ever set any preferences) which makes it stand out as a company. 

The app has grown so rapidly that it is now seen as a threat to social media giants such as Facebook, which has since released its own (and not particularly successful) version of Tik Tok called Lasso. 

Tik Tok is symbolic of the cycle of Chinese innovation today – rather than Chinese companies creating “Chinese versions” of apps such as youtube, China is coming up with new ideas, and the rest of the world follows suit.  

The Power of Innovation Planning

China has always been a place for innovation (Paper, Fireworks, Kites), so it’s no surprise that the China of today would continue the historical trend. However, the rapid rise in innovation and the emergence of leading Chinese companies all in less than a decade cannot simply be explained as a result of organic innovative growth.

Rather, China serves as a paradigmatic meta-example of how actively building infrastructure for innovation can act as a catalyst for unleashing potential. 

The steps the Chinese government has taken to foster innovation are enormous. There exist today in China numerous multi-year strategic plans to stimulate innovation and the tech sector.

For example, China has created a $15 billion “New Era technology” fund to finance Chinese tech startups. China’s education plan has encouraged student enrollment into STEM fields; by 2030, China is expected to grow its number of STEM graduates by 300%.

The Chinese government plan — Made in China 2025 — was created to help upgrade Chinese manufacturing from low-tech into high tech sectors such as robotics.

China’s latest five year calls for accelerating innovation, entrepreneurship, and research.

China is literally building innovative infrastructure by creating a mega-business region in what is known as “the Greater Bay Area” to compete with Silicon Valley. Features include a 34-mile bridge linking Hong Kong to Macau, new rail lines, and the construction of innovation hubs.

Whether government spending is the best way to fund innovative infrastructure is not the question (the right and left-wingers can duke that out elsewhere). Rather, what is clear is that innovation can prosper as a result of building the necessary infrastructure, whether by government or a private company. 

Micro Perspective – Company Level Innovation

When approaching the Chinese model from an organizational perspective, it is important to note that, of course, there many differences between national and corporate projects. However, there are key principles that can be distilled from a comparison. 

Chiefly, that while the raw ingredients for innovation must be present for innovation to take place, such as creative talent, the rate of innovation can be increased if the right steps are taken. 

A smoothie can either be made in a mortar and pestle or a blender. The result is the same. The time spent is not.

Similarly, the more innovative platforms a company has, the quicker it will turn out innovation; And innovative ability has never before been so crucial to companies’ competitive advantage. 

In an ever more unstable business environment where competition can just as easily come out of Shenzhen as it can from Silicon valley, 21st Century leaders must invest in innovation infrastructure not as a luxury, but as a basic tool for survival.  

2019 release by Rebecca Fannin. An excellent resource for those who want to explore China's rise over the last decade

Case Study: The Ferrari Pit Stop and The Value of Shared Goals

Consider the Ferrari video above, and notice what can be achieved in 2.5 seconds: Stabilization of the vehicle, tire changes, part replacements, and finally release of the vehicle. The self-critic in you might ask, if it’s possible to do so much in that time, why has my project been stagnant for months?

There’s plenty of blame to go around in an organization when results aren’t achieved. Managers may assume their subordinates are incompetent or lazy. Subordinates may blame poor working conditions, the tools given to them, or their managers lack of clarity. 

Yet, even if everyone was working at full capacity, there is a common obstacle shared by both managers and subordinates: goal ambiguity. It is typically not sufficient to leave goals as one line slogans — if they are even addressed at all.

In the fast, messy, and global world of today, projects are increasingly complex and require a goal-subgoal hierarchy (generated through deep planning) from day one of implementation. The goals generated should strive to be quantitative, fully prioritized, and in line with the organization’s mission. 

Typically, projects begin with great fanfare, but often the nitty-gritty is not confronted in planning and a goal hierarchy is not established. This leaves team members floating, confused, and sometimes embarrassed to clarify once the project is in motion.

Most importantly, once a target is set, team members will know how to aim. Tasks can be divvied up and organizational charts can be established. Thus team members, knowing exactly what their goal is, can be precise in the actions they take – from the tasks with the greatest responsibility down to crafting an email message to a client. Each person’s task becomes well defined. 

Consider again the Ferrari video above.

What enables the team to work so well? Surely they have the skills and training. But there are plenty of organizations that cannot thrive despite having recruited top talent. 

So, what is the key?

The goals are clear and hierarchical: Chiefly, make races run smoothly so that fans can be entertained and staff can earn an income. How can we do that (subgoals)? Change all four tires. Then, do it as fast as possible. Then, make a front wing change. If there’s nothing to fix, clean the front wing etc…

With these goals in mind, the team is able to work in full synchronization with near-zero ambiguity, and utilize a hierarchy of priority should uncertainty arise. Everyone knows exactly what they are doing, what everyone else is doing, and why.

If you want to increase the power of implementation when setting out on a new project, generate a list of goals – not a list of tasks. Tasks will come later. If planning is ineffective, implementation will be ineffective. 

For an in depth analysis of the Ferrari Pit Stop and each team member’s task, check out this video:

The Age of IoTrees – Israeli Startup SeeTree Uses AI and Drones to Digitally Transform the Farm

Agriculture is one of the most interesting sectors regarding digital transformation. Our perception, which proved to be wrong, is that digital technologies are disrupting many industries and main sectors like finance, media, retail, technology and more. One sector which until recently, was under our radar, is agriculture. The reality proves that this sector is using technology quite aggressively to optimize every known aspect of agriculture. AI, Drones, Big Data, IoT, Satelite data, GPS, precise weather forecasting models, and other technologies, are penetrating quickly into almost every aspect of the agriculture value chain and business models. And this is good news – the world needs more food and more effective ways to deal with the global population growth. By 2050 the world will need to produce 70% more food to the expected 9 billion population.

One of the latest terms, in this regard, is “Precision Agriculture,” a hot topic for over many years that started to deliver exciting results in recent years. Some of the published case studies are almost science fiction – drones patrolling over crop fields and monitor the crop conditions, photographing and analyzing soil conditions, identify issues and instantly deliver chemicals or fertilizers as require. Precision agriculture is using advanced machine learning algorithms that recommend the farmer when to harvest based on data received from many sensors and much more.

A fascinating case study is the Israeli start-up SeeTree which developed an end-to-end intelligence network that collects data from the many trees in the far. It makes use of Artificial Intelligence, Machine Learning combined with boots-on-the-ground, multi-dimensional sensing imaginary utilizing drones and specialized vehicles to collect precise data to provide farmers visibility and monitoring of their trees health, whiled recommending actions (e.g., alter irrigation parameters, etc.)

A recent Forbes article titled “How This Company is Transforming the AgriTech Industry by Blending AI, Drones” published on their website on January 16, 2019, is describing SeeTree and how they are transforming the farming and tree management by the use of advanced digital technologies.

Forbes article

In Chapter 2 of our e-book “Doing Digital” (Hebrew) Raz Heiferman and Prof. Yesha Sivan describe some of the exciting digital technologies which, they claim, are part of the Third Digital Age technologies. Some of these technologies are the ones that SeeTree is using to disrupt and transform tree management. In chapter 5, they extend the discussion and describe innovation. We provide some case studies of companies (e.g., John Deere) that used digital technologies to transform the company from a product-oriented company selling farming equipment, into a solution-oriented company that sells solutions for farm management.

Link to our e-book (Hebrew) on the e-Vrit application: https://bit.ly/2odl5th

Disruptive Innovation Can be an Opportunity and not Just a Disaster: Case Study: Fujifillm Vs. Kodak

According to Yuichi Itabashi, GM of Fujifilm’s e-Strategy Management Office (Jan 2019 Interview).

Fujifilm is a living example that disruptive innovation can be an opportunity as well as a risk. The company not only survived the disruption of the film and analog photography, but it also executed a successful transformation by taking its in-house expertise in chemical compounds and applied it in new ways entering new markets like cosmetics, healthcare products, pharmaceutical products, computer tapes for datacenters back-up, and of course for digital cameras.

In Heiferman & Sivan’s e-book “Doing Digital,” (Hebrew) they also describe (in chapter 5) the disruptive innovation model as defined by Prof. Clayton Christensen and use the Kodak vs. Fujifilm case studies as examples of how different approaches to the disruptive innovation led Kodak to miss the digital opportunity and Fujifilm to take this opportunity and thrive in the long-term.

Yuichi Itabashi, Fujifilm

How did they do it? In an interesting interview titled “How Fujifilm lives by the maxim: never stop transforming” published on January 2019 by the i_CIO magazine, Yuichi Itabashi, the general manager of Fujifilm’s e-Strategy Management Office, provides some insights to this challenging journey. As he says, it was not an easy transformation and sometimes even a terrifying nightmare. But the bold reaction of Fujifilm’s executive management saved the company from a similar destiny as Kodak’s that had to close its photographic operation in 2012. Fujifilm has transformed from a photographic oriented company into a diversified technology company with about 283 subsidiaries and a wide range of product lines.

As a diversified technology company, new challenges raised “how can it best gain visibility in the market for this vast array of products?” They decided to implement a bold digital marketing strategy and started by establishing the e-Strategy office in 2011 as part of the company’s headquarter. With so many subsidiaries and different product lines, the creation of joined-up thinking in digital marketing was necessary. From there they moved on to the e-commerce operations and worked to tie together the wide range of digital marketing activities and tools. They applied marketing automation tools and much more. As Itabashi says, he’s a great believer in the message he first heard from Prof. Philip Kotler, “Digitize or die.”

Gogoro – a One Billion Dollar Unicorn from Taiwan that Wants to Be the Tesla of Scooters

You have, probably, never heard on Gogoro. One of Taiwan’s most exciting and innovative startups and the first unicorn (over 1 BN$ market valuation). Well, you should – they are revolutionizing the scooter industry the way Tesla revolutionized the car industry. Gogoro recently rolled out their electric scooter, the Gogoro 2 Smartscooter, and it’s really smart.


Their concept is exciting, and like a two years old company, the results are amazing. Their scooter is well-designed, colorful and electric and above all – smart. It is an emission-free scooter, targeted for the crowded, congested and polluted cities, the challenging reality of most modern big cities.

Gogoro website

An interesting article on Gogoro.

The core idea of the new electric scooter is the battery and the charging station network. As we all know the main challenge of the electric vehicles is the relatively limited traveling distance and the long charging time. Gogoro approached that challenge by innovating together with Panasonic a brand new battery, the Lithium Ion 18650 battery. The depleted batteries can be swapped in a matter of seconds or so, much less time required to refuel your scooter.

Together with the new battery, they have innovated a network of recharging stations used to swap empty batteries with fully charged ones quickly. Instead of plugging in your battery to recharge, you just quickly replace the battery. Riders are offered a monthly subscription fee for that service.


The charging station, like a vending machine, holds four rows of 10 batteries each. They already have 350 charging stations in Taipei (they claim that you can find a station less than every 1.3 km, and plan to add many more charging stations. Those compact stations, like gas stations, can be deployed anywhere. They already started to install the charging stations in many more cities and countries.
If we remember the popularity of this transportation mode in many Asian countries, we can understand the huge potential of Gogoro. They also have plans to extend the usage of their batteries. According to Gogoro, a charged battery at 50% to 75% capacity can power a house for an hour, a laptop for 25 hours, a home furnace for an evening, or server rack with 40 servers for 20 minutes.

Let’s focus shortly on the “smart” elements of Gogoro, the digital technologies they have used for their innovative scooter, a network of charging stations and mobile applications. In many ways, they are less a vehicle company and much more a technology company.

  • There are 30 sensors on the scooter including a digital compass, a shock sensor, and a thermal sensor. The Gogoro Smartscooter can analyze riding patterns, optimize energy use, and dim its lights when necessary to maximize energy. Every 10 minutes, the scooter uploads information on its condition online.
  • Riders can download sound effects and lighting patterns to customize their scooters further. Everything creative and versatile can be done through its smartphone app.
  • Gogoro mobile application enables many functionalities. Some are: where is the closest charging station; where have you parked the scooter; dual dashboard – on the scooter and on the mobile; scooter condition display; 256 bit digitally encrypted and fingerprint authenticated (it makes the scooter almost unstealable) mobile app that reminds when maintenance is needed and helps you schedule an appointment at one of the Gogoro Service Center.
  • Smart scooter power management that maximizes your range by generating energy back into the batteries when slowing down. Digital throttle with Sports Activation that takes riders from 0-50 km/h in 4.3 seconds; SBS braking that delivers simultaneous braking force to the front and rear wheels and automatically balancing stopping force to reduce slips when hard braking or during panic stops, and much more digital innovations.
  • Gogoro uses digital technologies to manage the charging station, quantity of available and charged batteries, allocation of batteries to customers and more.

Gogoro is a great example of a company that uses technology to disrupt the scooter industry. They have augmented the physical product (the scooter) into a smart product by using digital technologies (sensors, fully digital dashboard, mobile applications) and innovating concepts like a new business model (monthly subscription for charging the batteries instead of only selling scooters) and remote management of recharging stations.

We can clearly see how Gogoro used several types of digital transformations, out of the six types we described in our e-book, published in Hebrew on the e-vrit mobile app.

  • From Atoms to Bits: In section 4.0.1 of Chapter 4 of our e-book, we named this kind of digital transformation as “atoms to bits transformation”, a transformation in which some products are entirely replaced by digital products (e.g., CD music, e-books, maps, photos and more) while some products are being digitally augmented (e.g., cars, home appliances, airplanes, and in our case, scooters).
  • From Products to Services: Gogoro transformed a physical product into an ongoing service by using the subscription business model to generate a constant revenue flow from customers for their charging fees.
  • From Business Models to Digital Business Models: Introducing a digital business model to generate revenues, opens up room for more innovative revenue generating models.

Case Study: How China’s Wanda Group succeeded to merge physical with digital worlds

How Wanda Group, China’s largest shopping center network, succeeded to combine the physical and digital worlds and bring new value to its customers

This post is based on an article written by Prof. Howard Yu, a professor of business administration and innovation at the Swiss IMD business school.

The article presents the exciting case study of the Wanda Group, China’s largest real estate developer that specializes in shopping centers. The company is known for her excellent business performance and for understanding how to leverage digital technologies to support the group’s accelerating growth.

The shopping centers are facing competitive challenges from the e-commerce giants, like Alibaba and others, and therefore have to reinvent themselves to remain competitive in a world where the boundaries between the shopping experience in shopping centers and e-commerce are blurring quickly.

Wand Group operates a huge network of shopping centers that host and combine shopping, cinema, and children playing grounds, hotels and office spaces. Recently they have expanded into amusements parks, film production, sports, technology and internet.

To remain competitive, they decided to implement a two path action plan: improving the customer experience in their shopping centers and leveraging the power of digital technologies. Prof. Yu’s article shows how this business giant succeeded in this two path action plan and to continue to grow in this competitive business landscape.

Regarding improving the customer experience, they were one of the first shopping centers in China to include restaurants and by 2017 they have become the world’s largest cinema chain operators. Their shopping centers include spacious indoor playgrounds within the plazas where children can play on traditional slides, swings, ball pits and educational arcade equipment.

Regarding their digital systems, Wanda’s Group rapid expansion capabilities, is supported by their IT backbone that has enabled the company to carry out informed decision making, streamline operations, codify its knowledge and operate at scale.

Here is Prof. Yu’s article.

Wanda Group is a great case study of the digital transformation journey of companies, as described in our “Doing Digital” e-book. Using digital technologies has helped Wand Group to expand quickly and become one of the world largest shopping centers operator.

Here is a link to our e-book.