Op-Ed Contributors

Economy of brawn and brain

By Handel Jones (China Daily)
Updated: 2010-09-10 07:44

Chinese companies have to develop and nurture new skills that can help them decide which products to develop, and how to develop and market them successfully. They invest millions of yuan to build modern factories but are reluctant to spend on market data or competitive analyses. This attitude has to change.

Strategic planning and proper marketing require huge volumes of data, which include the size and growth of markets, competitive analyses and impact of new technologies (such as software and user interfaces). These data need to be based on global conditions because China must evolve from being inward-looking to having a global outlook. In fact, it needs to strike a balance between the two, because its inward focus in the past gave foreign countries the chance to take advantage of its innovations.

It would be foolish to think that the Chinese have lost their innovative powers. But they have to learn to leverage their innovations to cash in on the global market, something they didn't do with gunpowder and their other gifts to the world.

Chinese people have to change their "factory mentality", which they have acquired over the past few decades. Corporate managers, too, need to change their "mindset" and, along with university students, should be made to undergo training in strategic planning and marketing skills.

Strategic planning can determine what products to make, after which engineers (and software writers) can design high value-added products to attract more customers. And proper marketing can convince customers of the need to buy those products.

Many successful foreign companies have innovative strategic planning and marketing departments. But most successful companies' approaches are specific to their products and market needs. Strategic planning and marketing require customization and need to be enhanced in real time as the business environment changes.

China is now arguably the second largest economy in the world. To continue growing, expanding its middle class and broadening its employment base and factory power, it needs to develop new skills. If it broadens its base in strategic planning and marketing, it will create more jobs for university graduates and enhance its ability to produce more value-added products.

China needs the power of "brawn" and "brain" both to continue providing labor at comparatively low cost and to start making more value-added and hi-tech products. Innovation, and strong research and development can make "made-in-China" products the leaders in their fields.

Leveraging brainpower is a gradual process in which new skills have to be developed. China has adapted to changing times in the past. It can do so again.

The author is founder, owner and CEO of US-based International Business Strategies, Inc. in Silicon Valley, California. He is the author of Chinamerica: The Uneasy Partnership That Will Change The World.

(China Daily 09/10/2010 page9)