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How creative and innovative can technology made in China be?

China's IT industry is becoming more Silicon Valley-like and, as a result, more attractive to the CIOs of western enterprises

Imagine a working environment that encourages creativity and innovation, where employees can take time off what are supposed to be their ongoing projects to develop their own ideas, where there are open and comfortable physical spaces for employees to interact informally, and private cosy places to relax or focus, a games room, a gym – are you thinking Silicon Valley? Google? 

This might sound like what we know about “creative companies”, such as Google and Apple, but it is actually what we have seen in the China-based offshore delivery centre (ODC) of a US IT service provider. 

But the working environment is just part of the story. The most remarkable aspect of the centre is several teams working around long oval tables, with a huge screen at the far end of each table showing another team in another country, sometimes working independently and sometimes “getting together” with the team at the office we were visiting.

Apparently, the teams on the screens (each local team had a counterpart team with which they could interact virtually) are client teams, all based across the Asia-Pacific (APAC) region. Each team at the ODC in China collaborates closely with a corresponding client’s team developing technologies that address the client’s core business and strategic objectives.

We were told that interactions between the teams in the office and those on the screens are regular “stand-up” sessions that are part of the agile methodology. 

As we learnt, such close interactions between the ODC and its clients is the norm. The ODC has had a collaborative relationship with this particular client for more than six years, during which time several inventions have been “born” and many innovations introduced to the client’s business model. To achieve its aims, the ODC recruits people who have a passion for technology, and are a perfect fit with the company culture.    

We have visited several client-dedicated ODCs of major Chinese service providers, where the typical scenario would be outside lockers where employees are required to leave all their personal belongings, cubicles for working, and interactions with the client typically limited to team leader/manager level. The difference we saw at this ODC was astonishing. 

Reassess its potential

Perhaps it is time to re-evaluate China’s image and reassess its outsourcing potential?  

Despite the growing number of research and development (R&D) centres in China, such ODCs are perceived as having a limited ability to exercise creativity and freedom to invent. Offshore R&D centres are usually seen as an “extension” of a parent company that taps into China’s extensive pool of resources. The notion of “made in China” is a common stereotype associated with low-cost, assembly-line work for large western companies. 

What we have seen in this ODC challenges this stereotype and demonstrates that truly creative and collaborative technology development work can be done from China and, more specifically, that truly collaborative work arrangements are possible between ODCs in China and overseas clients.   

Does this mean that other western technology companies should consider bringing their creative work to China? 

And could Chinese technology service providers learn how to engage more closely with their overseas clients to move up the value chain? 

Answering these questions could help Western as well as Chinese companies to embrace China’s true potential in helping to gain a competitive advantage.

Julia Kotlarsky is professor of technology and global sourcing director of research degree programme (PhD and DBA) at Aston Business School

, Birmingham, and Rong Du is professor of management at the school of economics and management at Xidian University, China

Read more on CW500 and IT leadership skills

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What is this introduction about. It sounds advocating Chinese model business. How safely a company can able to function, disregard normal government immigration intervention, patents and proprietary invasion as well as theft is known. Most startup companies exhaust their capital on R&D. I don't believe china is safe on this regard. Most western companies are blinded by the vast profit making today but once China exceed the economic superiority, which appeared on that direction, the military advancement will reach to a challenging position to the west. Because their global dominance  intent was perceived on many accessions. In a very near future their dominance will be immanent. The consequence of greed eventually have regrettable price.
The cost of investment on any new product is R&D plus row materials plus labor. If I'm able to duplicate a product that I've put no investment on the R&D obviously can imagine how the absence of R&D leverage my profit. That is why the Chinese dump products on a cheap price. I noticed this on a third world country that has close relation with china.
For example, in software windows 10 here in the US price range from $120 and up. But in the country I'm giving you the example here, I purchased it $10. There are many products like this sold extremely cheap price because on this case the cost is just CD duplication. Can you imagine how the Chinese profited on this respect,
Thanks for your concern. Actually this is a Chicago-headquartered company. We have provided the company name in our initial article. The editor deleted the name of the company for some reason.
This US multinational company impressed us in many aspects. A real global company in the era of global economy.