Despite surging competition from China, U.S. companies still have the competitive edge in innovation, says a recent Michigan State University study.
In research appearing in the International Journal of Research in Marketing, MSU researchers found that when compared to Chinese firms, US companies are often better in converting knowledge of customers’ wants and needs into innovative products.
“These findings are encouraging for U.S. companies given the increased international competitiveness that China and its companies are showing globally,” said Tomas Hult, a professor of marketing and co-author of the article.
The research team conducted parallel studies among U.S. and Chinese companies to better understand the dynamics involving their customers and competitors. The goal was to focus on comparisons of how well these companies are market-oriented and how they develop market knowledge and competence to drive innovation.
A company being market-oriented – or how well it identifies and meets the wants and needs of its customer - is the first step toward reaching and satisfying customers. But success depends on the value that a company creates using its market knowledge competence – its ability to innovate.
“Customers will engage only if and when they see the company being innovative, not when a company says it will be innovative,” Hult said.
The research showed that leading U.S. companies are also better at using knowledge about competitors to be innovative in the global marketplace. Despite the innovation and market knowledge competence advantages enjoyed by U.S. companies, Chinese firms remain strong competitors for other reasons.
“While U.S. companies are innovative we still have to keep in mind that Chinese companies are very efficient in delivering global products,” said Roger Calantone, a professor of business and co-author of the article. (msu.edu)
China Ahead of Europe and North America in R&D Spend
A study on R&D spend by top Global 500 companies for 2014 has found that China surpassed Europe and North America in growth of total R&D spend.
China's image as an emerging innovation powerhouse, a study on R&D spend by top Global 500 companies for 2014 has found that China surpassed Europe and North America in growth of total R&D spend.
"In terms of geography, China saw the maximum growth of 20 per cent in R&D spend from 2012 to 2014; even higher when compared with Europe (consistent over last 3 years) and North America (steady at 4-5 per cent growth) and Japan (which is on a recovery after a strong decline the previous year)," says the study by management consulting firm Zinnov.
Moreover, the total R&D investment by Global 500 companies grew by 4.31 per cent from 2013 (USD 604 billion) and reached a USD 614 billion in FY14.
The study highlighted that over 65 per cent of the overall R&D spend was contributed by the top 100 R&D spenders, with majority of this growth coming from North American and Asia Pacific (APAC)-based firms.
The number of billion dollar club members (companies that spent more than USD 1 billion in R&D expenditure) in the Global 500 firms have increased though the share of R&D spending has not seen any significant change.
It also highlighted that the billion dollar club is gaining more companies from the APAC region.
"Consumer/Web 2.0 and e-commerce companies such as Baidu, Tencent, Ctrip.com etc. led the growth in R&D in China, while the contribution by telecommunication ( Huawei, ZTE) and automotive segment (Great Wall Motors, Byd Co Ltd-H, Dongfeng Motor) is also on a rise," the study noted.
Slowly but surely, China will succeed and "SET" to bring its in innovation to another level and scale a new height. Whether you like it or not, China's influence to your daily life is set to take place and stay for long. The status of China is growing all the times. China got a really important role to play in international markets.