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The New York Times business bestseller Start-Up Nation: The Story of Israel's Economic Miracle which explores the roots of Israeli innovation has garnered global attention and won its co-authors Dan Senor and Saul Singer worldwide fame overnight. In a recent interview with Global Times reporter Zhang Ni (GT) in Beijing, Singer (S), who served as an adviser to the US House Foreign Affairs Committee before moving to Israel in 1994, said he believes China is more innovative than people think. He suggested that China is ahead of the US in some aspects, as Facebook is now trying to copy China's WeChat.
GT: Do you think China is a start-up nation? Do you think China is an innovative country?
S: The process that happened first in the US and then in Israel is happening now in a very big way in China. Entrepreneurship is growing rapidly in China. There are probably thousands of start-ups already. In addition to this natural growth, the Chinese government is strongly encouraging people. Entrepreneurship is very risky and difficult. When you have encouragement from the government, it makes things easier. China is already producing some very innovative companies as well as a lot of start-ups. This process has moved fast in the past five years and is going to move tremendously as well in the next five. I think China is much more innovative than people think. They just don't realize how innovative Tencent, Huawei and Xiaomi or many start-ups are.
GT: What are driving factors that are making China become more innovative?
S: There are a number of key factors that have made this happen. One big factor is that it is very easy to make things in China. The rest of the world, including entrepreneurs in Israel and the US, looks to China when they need to build a prototype because they can build things easily and quickly here. Another factor is that China has one of the most advanced Internet and e-commerce systems in the world. You are already living a more advanced mobile lifestyle in China than we do in Israel and people in the US. That's a huge asset to innovation. The third factor is that people in China naturally think big. One of the hardest things for entrepreneurs to do is to think big. In China, they are more likely to think "This could be an enormous company. I'm aiming for all of China or all of the world." In Israel, we are such a small country. It's harder for us to think that way. Because we are small country, we have to think globally, but that's not the same as thinking big. The combination between the ability of Israelis to think globally and the Chinese ability to think big is a good one, and one reason that we should build companies together.
GT: China's innovation drive faces challenges. It seems that there is more business model innovation than in technology in China. People also claim that China is good at copying, but that there is less original innovation. Do you think so?
S: Business model innovation is innovation. It is sometimes often more important than technological innovation. We call companies like Facebook and Tencent "tech companies." But Facebook CEO Mark Zuckerberg did not invent a new technology. He essentially invented a new way of using technology that was available. The same with Tencent. The invention was not the technology. [WeChat] combined [the concepts of] Facebook, Twitter, Paypal and Skype altogether in one place. That combination is the winning model on the Internet today. Tencent's WeChat is not a copy of anything. In fact, Facebook is copying WeChat. Facebook wants to be the WeChat of the rest of the world.
Business model innovation is another Chinese asset and a huge strength. China is also strong in technology. Many people believe that Huawei's phone is technologically superior to Apple's iPhone. But technology is often a small part of innovation. This is increasingly true because more and more innovation is going to take technologies that are well known and just combine them in new ways.
GT: What is the key to the success of Apple's branding? What can Chinese firms learn from it?
S: There are three parts to becoming a global innovation leader: technology innovation, business model innovation and branding. China is already producing some companies that are at or above US levels in technology. Where China lags most is in branding. Branding is what makes a consumer choose between two products that are at roughly the same technological level - such as phones made by Apple, Huawei and Samsung. Branding is a form of trust and identification.
People identify with Apple not just because they produce great products, but because they identify with Apple's aura of "thinking different." Apple's most famous commercial ("1984"), doesn't even show or describe its computer - it's all about being different.
The US, with Apple as the best example, is leading the global branding race. Countries, not just companies, are brands. For China to become the global innovation leader, Chinese companies will have to build brands that are global leaders. This can be done, despite the cultural differences between the East and West, as Japanese and Korean companies have demonstrated.
GT: In the future, how should China and Israel cooperate in the field of entrepreneurship?
S: One of the reasons why China and Israel have both been successful is that we both believe strongly in education. China has one of the top performing education systems in the world. Israel's universities are world class, but it's K-12 system has been underperforming in the PISA math and science tests. In China, there is concern that the education system does not sufficiently encourage creativity, initiative and entrepreneurship. Accordingly, both China and Israel feel the need to improve education. In both countries, entrepreneurs are building companies to help solve the shortcomings of existing education systems.
One of the big reasons that Israel became a start-up nation is that its young people have been receiving very important life-skills - such as leadership, teamwork, communication, and so on - outside of school, including during military service. The big challenge for reinventing education, in China and Israel, is to figure out how these life skills can be conveyed in schools, not just learned later in life. I believe that solving this challenge is an opportunity for China and Israel to work together.