Is China ready to innovate?
It's a key question for those pondering how quickly China will go from manufacturing what the rest of the world designs, to becoming a center of new products and ideas for the globe.
Some Chinese companies like computer maker Lenovo Group Ltd. and appliance giant Haier Group are starting to make that switch, while others, like firms in its sizable auto industry, are scaling back export plans as they realize they aren't ready to go head-on into some of the world's top auto markets.
So, how quickly will a home-grown version of Japan's Sony or Korea's Samsung emerge?
Allan Wong, chairman of Hong Kong electronics manufacturer and injection molder VTech Holdings Ltd., thinks China is ready to innovate. Two years ago, he cut back on industrial design operations in the United States, eliminating more than 100 jobs and shifting the work to Hong Kong.
He said the move has worked well, consolidating design with other functions key to product development.
On the other hand, Katherine Ngan, executive director of Hong Kong toy maker and molder May Cheong Group, is less sure of Chinese design capabilities. The firm's primary design work is done in the United States, with secondary design operations in Hong Kong and manufacturing in China, she said.
``The USA is more creative, but now Hong Kong is improving a lot,'' she said. ``The Hong Kong designers, including the students, need more international knowledge.''
Both spoke in late November in Hong Kong at the Business of Design Week forum, an event aimed at helping firms in China's Pearl River Delta manufacturing zone develop their design capabilities and brands.
Both VTech and May Cheong have developed brands. VTech makes electronic learning toys and is one of the world's largest makers of land-line telephones; May Cheong and its roughly 500 presses produce toys under its Maisto and Bburago brands.
But they are somewhat unusual. Well-known industrial designer Eric Chan, who was born in China's Guangdong province and grew up in Hong Kong before moving to the U.S., thinks other firms in China will start to develop major brands, if they can overcome what he said are cultural predispositions against pushing new ideas.
``I think it will be even bigger than Sony or Samsung, but the point is the Chinese people don't believe they can now,'' said Chan, president of Ecco Design Inc. in New York, and one of ID Magazine's 40 most influential industrial designers.
``It's because the historical thing for China has always been, `Follow the master. You need to practice what the master gives you,' '' he said.
China and Hong Kong are hoping to change that, and quickly, by putting a lot of resources into design and product innovation education. China, for example, graduates 20,000 designers a year from 400 schools.
Hong Kong as well opened a design incubator and office space, the InnoCentre, in November, as part of the government's HK$250 million (US$32.2 million) DesignSmart Initiative to promote local design.
Victor Lo, chairman of the Hong Kong Design Center and chairman and chief executive officer of Hong Kong manufacturer Gold Peak Industries (Holdings) Ltd., said some Chinese firms are moving quickly to get out from under being original equipment manufacturers, where they make products for others.
``If I look at companies today vs. 10 years ago or even five years ago, they are making rather rapid improvements,'' he said. ``But of course, in our manufacturing sector, our companies have a long and deep history of being OEMs. So to get out of that and move into [original design manufacturer] and then go into brand, it's a long journey.''
A globally recognized Chinese brand will take at least 10 years to emerge, in the view of Lo and Zhou Yi, who a decade ago founded Shanghai-based s.point design, one of China's first industrial consultancies.
Yi told conference attendees that while China turns out graduates in large numbers and has a huge number of firms calling themselves design studios - 600 alone in Shenzhen - design remains a low priority for Chinese manufacturers, and the quality of design often is not very good.
It's important to improve design because the country is losing its labor cost advantage to places like Vietnam and India, said Yi, whose firm does 70 percent of its work with international firms like Motorola.
Ultimately, he predicted design in China has a bright future, in part because the government is putting up substantial resources.
Still, the country doesn't seem to be there yet.
Palo Alto, Calif.-based industrial design firm IDEO, which employs 400 at 11 locations around the world, has an office in Shanghai, but finds most of its demand there is to complete engineering work started elsewhere, and not start as many creative projects, said Bill Moggridge, a co-founder of the firm.
Moggridge, a well-known figure in industrial design circles who designed the first laptop computer in 1981, said China will catch up, though. He compared the mainland today to Taiwan more than a decade ago.
``If you looked at 1980-1995, Taiwan was going through a transition from being thought of as a manufacturing country toward being thought of as more of a tooling and engineering development and design economy, and [was] moving from OEM to ODM very successfully, I think,'' he said.
``What we see in China seems to me to be really the same, only it's accelerated.''