Two innovation models to learn from

The three nations that, one way or another, lead the global economy at the moment are the United States, Germany and China. For the US, it is innovation driven by a can-do spirit and an appetite for risk, with established corporations and startups introducing some of the world's most important and game-changing technologies. In Germany, a commitment to product quality and engineering excellence has been key to the success of both its multinationals and small- and medium-sized enterprises.

China's economic strength has been built on its cost competitiveness and the adoption of foreign-developed technologies and innovations since its opening-up, and its global impact has been due mainly to its massive scale. The global financial crisis, however, has ushered in a new phase in China's economic development, as it can no longer rely predominantly on foreign consumption as an engine for growth. It has to develop domestic consumer markets and orient its production towards them. Furthermore, rising wage costs make it highly unlikely that China will be able to continue to grow by being the factory for many of the world's simpler products.

To move forward and move up the value chain, China needs to begin developing a management system and, more importantly a culture, for technological and product innovation.