Indigenous Innovation and Economic Development - China's Great Leap Forward into the IT Age

Are emerging nations obligated to follow the types of developmental trajectories of developed countries? Or can they instead engage in "indigenous innovation", transferring technology from abroad to generate superior technology at home? Using the comprehensive studies undertaken by his late colleague, Qiwen Lu, who drew on the previous work of former INSEAD Professor Mary O'Sullivan, Distinguished Research Professor William Lazonick details the phenomenal success stories of four of China's now most globally prominent IT firms.

by , William Lazonick

Given the massive lead in technological knowledge enjoyed by the developed world, how can emerging states hope to acquire the innovative capacities that are crucial for joining the ranks of prosperous nations? Do they have to follow the technological trajectories that have succeeded in the developed world? Or can they instead engage in "indigenous innovation", transferring technology from abroad to generate superior technology at home? In the modern context, this would generally involve exploiting technologies transferred from the advanced economies in support of home-grown, often very high-tech areas.

Distinguished Research Professor William Lazonick details the phenomenal success stories of four of China's now most globally prominent IT firms. Using the comprehensive studies undertaken by his late colleague, Assistant Professor of Asian Business Qiwen Lu, Lazonick expands the research of both scholars on the comparative historical experiences of both developing and advanced economies. He seeks to distil the insights provided by Lu's four business histories, using them to inform theories of innovative enterprise, indigenous innovation, and economic development.

The four Chinese firms studied - Stone, Legend (since renamed Lenovo), Great Wall and Founder - are all now publicly listed and are world players in their various IT sectors. Lazonick and Lu analysed the conditions, created by the Chinese government in the 1980s and early 90s, crucial for providing the technological capacities needed for indigenous innovation.

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