Intel China Innovation Day Keynote 2008 - by Steve Mushero

Intel ChinaInnovation Day

Intel ChinaInnovation Day

Steve Mushero

October 27, 2008

Intel Innovation Day - Steve Mushero 2October 27, 2008

Questions to Think About

Can China Innovate ? Does China Innovate ? If it does, How ? When ? Why ? What helps the process ? What hurts the process ? How to do more ?


Who is Steve?

Entrepreneur - Founder & CTO of ChinaNetCloud Was CTO of Tudou (土豆网的首席技术官 )

Inventor Several U.S. patents

Author Off-Shoring, Macroeconomics, & Innovation Public Policy

CTO / Chief Architect for 20 years Silicon Valley, Seattle & New York tech companies Fortune 1000 Manufacturing Companies United Nations/World Health Organization Finance / Insurance (U.S.) & Micro-finance (India)


What is Innovation?

Harvard Business School:“Innovation is the embodiment of knowledge in original and valued new products, processes, or services”

Note the key words: Original New Value


Innovation


Can China Innovate ?

Lots of questions and doubt Comparisons with Asian Tigers & Japan Kodak: “Kodak has a culture of innovation.

Yet, there was a noticeable non-participant in our culture of innovation and invention. China.”

Quote: "Oh no. Nobody invents here."


Individual Challenges

Why not patent: "It's a waste of time. Someone who has money will just take your idea and make the money. You'll get nothing.”

Why not innovate: “I have my job to do, as so does my management. We all work very hard. My job is to do what they tell me, not tell them what to do or question their judgment. If I had such a worthless employee, I'd...”


China only copies things And often not very well Education too rigid Culture too limiting Confucius still lives No risk-taking No initiative Criticism Face

Innovative Challenges or Myths ?

?


Can China Innovate?

No

Do You Agree ?


Of Course China Can

Long List of innovations, Long Ago Silk, Weaving, & Fine Cloth Porcelain, Abacus, & Gun Powder Compass, Printing, & Paper Tools (popular in Rome) Civil Service / Merit-Based Exams

Probably the world's most innovative culture through history, amid great challenges

China's innovation was so dominant, the opium wars were started to balance trade


How & Why Did They Innovate?

China has a very long and difficult history Innovation from necessity

Lot of people to feed, clothe, & house Lot of war to test weapons & tactics Lot of ocean to explore & trade across

With strong education system Very smart people, working very hard But, declined during Qing Dynasty May seem long ago and far away

But today’s innovations are for the same reason


Innovating-Limiting History

Opium Wars (1800s) Foreign Occupation (Treaty Ports) Republican Revolution (1911) War of Resistance (抗戰 - WWII) Civil War (~1945-1949)

Cultural Revolution (1966-1976) Effects are still with us


What about Today ?

Educational system - one-way Hierarchical Decision Making -老板总是决定 Confucius still lives – decisions are one way Risk-taking – one-way Therefore limited initiative Therefore a fear of failure

Criticism Loss of Face

Good enough vs. optimal No patience for innovation’s improvements


Generational Differences & Gaps Age 40 and above

Protect self & family Lack education, but not effort & determination Fast-moving, fast evolution, innovators

Age 20-30 – Future of the world Western influences China will rule the world Parental & society pressure

Age 30-40 – Cautious Western-leaning In-between, but future leaders Often leaving technology for business


What about Today ?

4-2-1 Family Pressure, Support & Motivation Risk-Aversion, similar to India Move to management, business, entrepreneur

Deprives society of best technical minds Lack of self-funding for risk, startups

Startups not rewarding innovators with riches Not recycling talent like Silicon Valley

Everyone wants to get ahead, now Stimulates real innovation – new companies Limits real innovation – no patience to innovate


Education <> Innovation

Education #1 priority for centuries World's first merit-based promotion system But, how was & is merit measured ? Standard tests Teaching to the test Thinking to the test Following Confucius to

the Test


Question is, does China innovate today?

Answer is Yes Not often in Technology, but in Business

Tech vs. Need vs. Opportunity Innovation Chinese Capitalism restarted from scratch

Enormous progress, matched for China Still missing a lot of Western infrastructure

Credit Cards, Postal Delivery, etc. Dynamic regulatory frameworks

Evolving rapidly, often in non-obvious ways Still lots of challenges, every day at every level


Innovation Still in Early Stages

Lots of business and economic innovations China has, and will have, tech innovation

Solve real needs P2P, user scaling, infrastructure

TenCent/QQ, PPLive

Companies like Trapeze coming to tap into long-term innovation and talent

No longer just a cheap staffing (“Body Shop”) Western companies can help build

innovation culture


Modern Examples

All around us Often masked by Western perspective Sometimes importing & improving for China

On-Line Video Finance / Payment On-Line Gaming Social Sites


Tudou - 土豆网 China's largest video site OLDER & BETTER than YouTube More features than YouTube, earlier Playlists, channels, mini-sites, wikis More difficult tech & regulatory environment No tech innovation – serve the people’s needs Subtitle innovation Focus on entertainment Future of Global video entertainment

China is far ahead of the world, and is the future


Finance / Payment Systems

Innovation in the face of obstacles Must innovate to build E-Commerce

Break of out family / friend / trust circles No typical payment systems – Credit, Check Cash On Delivery – Scooter-man Escrow (Alibaba)


Gaming

China the Global On-line Leader & the Future Difficult environment

Piracy vs. Console & PC Games Importing some creative parts Surprise Innovation – Make Everyone Pay !

Not a natural Chinese feature Casual Games – Real innovation

Better Merchandising than Wal-Mart Ecosystem – Ops, Billing, Ground Forces


Social Networks

Early copies of American sites – MySpace Many Chinese innovations Making connections important Single children seeking independence Chatting / interacting important


What's Driving Chinese Innovation

Matching business environment with culture Need-driven – just like 500 years ago Speed is life – going slow can be death Loose structure – no planning, just do Risk taking – but only by the boss Competition – lots, so must find an edge Use Information – Internet helps everyone Lower costs – Allow faster try/fail cycles,

and parallel efforts


Characteristics of Innovators

Often Renegades & Delinquents Often poor in school – Einstein & Edison Einstein wrote “The spirit of learning and

creative thought were lost in strict rote learning”

Believe in an idea and follow it Innovator's Habits - Look at crazy ideas for

longer, test, think broadly Think of it as exploration See book “Double Helix” about discovery

of DNA – followed unpopular hunches, ad hoc intuition


Leading Innovation in China

Leadership important at every level School/Corp/Life – People wait for instructions

They go step by step, then wait and see Support initiative, even in the face of resistance Set goals - “Barely works” vs. “Real Solution” Support vs. Criticism Let failure teach lessons


Leading Innovation in China

Every innovation rule in the West applies But even more important

Think about Brainstorming Rules Listen Don't interrupt Don't criticize Let ideas run

Support new ideas and people Reward innovation every way possible


Fostering Innovation in China

Young people are the future Encourage them every day

Hire the mavericks & dreamers And a good weirdo or two Don't wait for the boss

Everyone needs to pull the innovation carriage


Fail Early & Often

Apple iPod – Newton was a big failure Sony had iPod earlier, but innovation failed Post-it notes took 6 years, failed

until marketing met science Learn to support failure Mistakes will (and have to be) made Learn from failures (via reports) Use case studies & research to show that

failure creates success


Financial Incentives Important

Parents & culture drive financial security Show that innovators don't need to move to

management or leave to start a company Consider huge rewards for new ideas Spread the wealth to those who create it Consider policy like the U.S. Bayh-Dole Act

Required to share royalties with inventor Major driver of U.S. university innovation


Work for IP Protection

Chinese IP System improving Useful for big technology companies? Chinese assume it’s not that useful Also not helpful for business

models, payments, games, or ways of thinking

So move faster, bigger risks And innovate more, stay ahead


Finally

“Think like a child”

Picasso said: “We are all born creative; the challenge is to stay creative when we become

adults.”


Steve Mushero - www.ChinaNetCloud.com

[email protected] - www.SteveMushero.com

Thank You – 谢谢 !

Intel China Innovation Day Keynote 2008 - by Steve Mushero

Technology

Transcript of Intel China Innovation Day Keynote 2008 - by Steve Mushero