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Radical Innovation Prediction #1

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China wants be the "plant of the world", while India wants to be the "back office of the world".

If you did not know, China has become the world's top producer of steel, small-sized motors, and home electrical appliances such as toasters, ovens, and refrigerators. How? They have achieved this due to two important factors:

  • 1) foreign investment in China
  • 2) high quality of the Chinese workforce

China has also been ‘buying' up companies just so they can learn and develop global management skills. In 2004 IBM announced they are selling their flagship personal computer business to the Chinese company Lenovo. In December 28, 2004 article, New York Times suggested that part of the reason they bought the IBM business was to acquire the experienced management team that came with the business from IBM.

On November 11, 2003, then the chairman of Toyota and head of Keidan-Ren, the most powerful organization of CEOs in Japan, said to his peers that

"China has become the world's top producer in many areas...and Japan cannot of compete with China in the production of like products. China has enormous competitive advantage in its quality of workforce. We must clearly understand that competition is not possible in the filed of "commoditized" products.

For India, the exponential growth rate of software export is clearly the most competitive advantage. In 1995 the export was $700Million, it grew to $15Billion in 2004, to $40B in 2008 and is expected to hit $50B in 2009.

This is not the only advantage in India, the second strength is in the manufacturing sector. Level of Quality of Indian industry has been increasing such that 111 Indian companies were TPM Award Winners ( between 1995 and 2006. Similarly 16 Indian companies won the Deming Prize and Japan Quality Medal. In the United States only two companies (Florida Power in 1989 and AT&T Power Systems in 1994) have ever own the Deming Prize. In Taiwan, only one company has (Phillips in 1991).

According to Ex-Indian President, Mr. Kalam India has three types of companies for the world to take advantage of:

  • 1) companies with an R&D capability to create unique technologies
  • 2) companies that license technology and do some design
  • 3) companies that do manufacturing according to a specification given to them

Bottom-Line #1: For every business , the question for companies elsewhere is...What type of breakthrough thinking is required for a business to grow and prosper in the future, knowing that China and India wants to be your plant and the back office?

Bottom-Line #2:For every individual, the question is what type of skills and competencies will be required to stay in the career you are in or prepare for a career that will be in high demand, knowing the new competitive global workforce?


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