BROKEN BULBS: Innovation: Hands up if you've invested in China

Monday, April 7

Hands up if you've invested in China

The chart below shows the iShares FTSE/Xinhua China 25 Index Fund (Ticker: FXI) over the past year. As you can see, investing in China-based companies is a great way of learning the real meaning of the word "evaporate." I'm no expert on investing but I can tell you that many of the professional analysts that I met in Taiwan preferred to invest their own money in non-China funds. Trust is the key word here. These analysts and financial advisors are still quite happy to recommend investing in China, though, just as long as it's not with their own money.

Still on a China note. The following interview on Smallbizpod is worth a listen. In the interview, David Wei, CEO of Alibaba.com, discusses his experiences working with the company in China. One interesting part was his comments about how the company forces new projects to succeed by restricting the cash the team has access to: "Money makes people stupid." At the same time, the team is placed in the original two-bedroom apartment in which the founders of the company started the business: "This is how you start a great business." How's that for a great reminder of what innovation and the company culture is all about?

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WHAT IS INNOVATION?

Innovation is defined here as:

"The profitable implementation
of ideas." - Broken Bulbs (2005)

This definition includes three core elements of innovation: ideas; implementation; and profit. If you dislike the term "profit," you can replace it with "social or economic value." So: "The implementation of ideas that create social or economic value." Broken Bulb's definition draws from these authoritative sources:

"Implementing new ideas that create value." - Innovation Network, U.S.A.

"The intersection of invention and insight, leading to the creation of social and economic value."
- U.S. National Innovation Initiative (2004)

"The development of new ideas and their economic application as new products or processes."
- U.K Dept. Trade and Industry

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INNOVATION: UNDER THE BONNET (HOOD)

When thinking about innovation, it's worth keeping the following points in mind:

- innovation is a multi-dimensional construct
- an innovation can be described by type (process, product, service, business model, value, market, brand, channel, price etc.)
- and degree (incremental, semi-radical, radical, transformational etc.)
- an innovation can be described as a user innovation (the developer benefits by using it) or
- a manufacturer innovation (the developer benefits by selling it)
- a definition will emphasize a particular unit of analysis (e.g. task, project, individual, group, SBU, firm, region, or nation)
- a definition can, therefore, take a broad or narrow perspective
- a definition can take a supply- or demand-side view
- viewing innovation as either product or process, while useful, is overly simplistic
- a sustaining innovation can be radical or incremental
- a disruptive innovation, by contrast, emphasizes a dimension of a product that incumbent firms' most profitable customers don't especially value.
- the same author may use a number of different definitions, depending on which dimension is being discussed.
- innovation can also be viewed as attitude: "There must be a better way."

My Slideshare Innovation Page

: Name: Gordon Graham; Location: Connecticut, United States

My passion and interest is in innovation and brands in international business. Recently completed post-graduate research into the innovation strategies of Taiwanese firms active in multiple country-markets as part of an MSc (distinction) in International Marketing. Originally from Scotland. I recently moved to the United States (CT) and would love to work in a corporate university or traditional university setting. Thanks!

View my complete profile

Innovation Quotes:

"Though the outcomes of successful innovations appear random, the processes that result in their success often are not."
- Clayton Christensen (2003)

"He who innovates will have for his enemies all those who are well off under the existing order of things, and only lukewarm supporters in those who might be better off under the new."
- Niccolo Machiaveli, The Prince

"The true pacemakers of socialism were not the intellectuals or agitators who preached it, but the Vanderbilts, Carnegies and Rockefellers."
- Joseph Schumpeter (1942, p. 134)

"Dear President Jackson,
The canal system in this country is being threatened by a new form of transportation known as "railroads" . . . If the canal boats are supplanted by railroads, boat builders would suffer, and towline, whip, and harness makers would be left destitute . . . God never intended that people should travel at such breakneck speed."
Sincerely,
Martin Van Buren
Governor, State of New York, 1829

"Some good experiences will always be scarce."
- Matt Mason, 2008

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