What role does government play in innovation?

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This. Marketplace podcast is brought to you by the university of Florida Warrington college of business transform your future with an MBA from one of America's top ten universities. Learn more at Warrington dot ufl dot EDU slash MBA. This marketplace podcast is brought to you by equities N a premier platform bringing private markets to the public get access to tech unicorns like Uber. Airbnb and more sign up for free today at equities N dot com slash tech. A look at the secret sauce of innovation and it's less glamorous cousin adaptation from American public media. This is marketplace tech. I'm Tracey Samuelson in for Molly would. If you're a government day, the Chinese government looking to spur more innovation in your country. How do you do that you can think of innovation as a ladder of sorts? It might start with imitation. And then progressed you adaptation like tweaking a foreign idea to develop it for a local market. Finally, hopefully, you reach invention, perhaps even big industry changing ones. But the steps needed to climb that ladder can be elusive murky, and there's only so much governments can do says Regina abroa- me a professor at the university of Pennsylvania's Wharton school of business. I talked to her about China's efforts at state-sponsored innovation. It's something country. Can't cause to happen. It has to happen at a much more micro level, which is gonna what's the form of business organization in your country. Is it a collaborative is it a hierarchical places their scope for collaboration? What's the the nature of your education system? Are you teaching children to be problem solvers or are you rewarding? What are you? Awarding them for are you rewarding them for getting the answer's right or you're rewarding them for seeing something that you did wrong. But you know, I think we've I think we're at a point now where anyone who thinks that it's just about plopping cluster together meaning to say and China has lots of these right? Let's let's have one university in the next. Let's put a little tech park and extra. Let's do this other thing and magic show happen. It doesn't always work then then last, but not least. And this is not a trivial point you need a legal system where intellectual property is protected, right? Which is a chief US complaint about operating in China Raina, right? But it's not just us firms Chinese firms themselves also want to make sure that their IP is protected. It's interesting because the communist party's main in China twenty twenty five planets received a lot of attention recently for its attempts to you know, pick and develop specific Chinese industries is that type of industrial policy successful in fostering innovation. I think it's successful in fostering market leadership. Perhaps even market domination of a given sector within the Chinese context. And also potentially allowing for firms to compete in a way that gives them an advantage in the global marketplace. So it's not necessarily the case that industrial policy equals innovation policy. Yeah. So this idea of like, creative add patient versus a truly innovative breakthrough. But at a patient, you know is innovation. I mean, you know, as at the end of the day, this sort of hacking and making it work is a kind of innovation right? And certainly if we look at Chinese companies and their ability to sort of really target mid range markets, and how successful they've been in that space. It has been because they've been able to sort of make that those those adaptations that are targeted to our particular customer. They're trying to sell to. So it's it's not that China made in twenty twenty five has not succeeded in many ways it has. But that in an insane China the leading innovator in the world today. I think that we have to be a little bit more cautious on that front. Regina balmy at the Wharton school of business. Professor Rami made an important distinction. She said this isn't about the capacity of the Chinese people to be innovative. It's about the context and system they have to innovate within. Now for some related links. Professor brownie wrote an article called why China can't innovate in the Harvard. Business review back in two thousand fourteen much of that still applies today this China Morning Post had a couple of recent articles on China's intellectual property articles how they could be strengthened to meet US demands in the ongoing trade war and foster innovation the number of intellectual property rights cases in China increased more than forty percent last year and finally on the theme of creative thinking, there's this quantum magazine story from two thousand seventeen I just keep going back to it's about a retired statistician who solved a math proof others had struggled with for more than fifty years. He had the idea while brushing his teeth. I love stories of late bloomers. They give me hope. I'm Tracey Samuelson. And that's marketplace tech. This is a PM. You trust marketplace to cover more than business news. You rely on us to connect the dots between complex economic issues. And why they matter to you to keep public service journalism going, strong, please go to marketplace dot org today and become a marketplace investor with a donation in any amount, we appreciate your support. This. Marketplace podcast is brought to you by Kronos, look into any great business. Whether it's a manufacturer or a hotel a store school or hospital look into each and every one of them and you'll find the same thing. Great people at Cronos believe that great businesses are powered by great people. And with Kronos workforce solutions, it'll help you find them keep them and engage them. Learn more at kronoScom. Kronos, workforce innovation that works.

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