It’s not every day that one country accuses another of not being innovative enough. Yet on Aug. 14, the United States, the world’s largest economy, threw that charge at China, the world’s second-largest economy. The US complained that China prefers to take the technology and intellectual property of foreign companies rather than rely mainly on its own ingenuity to build a more competitive economy.
The complaint was in the form of an order by President Trump to investigate China’s alleged theft of specific US patents, copyrights, and other intellectual property. The US calls China the world’s greatest infringer of IP. In particular, the US wants to stop China from targeting American companies and forcing them to hand over their trade secrets when they try to enter the large Chinese market.
The US probe could result in new restrictions on Chinese imports. But it might also have a positive effect rather than risk a trade war. It could force China to focus even more on developing a business culture that fosters creativity and a freedom of thought that challenges norms.
That is still difficult under an authoritarian regime that prefers conformity and even commands the large state-run businesses on which industries to invest in. In fact, the government has directed its top firms to dominate high-tech industries such as robotics and new energy vehicles in the next eight years.
Most of all, Chinese researchers and entrepreneurs need to become better at overcoming a fear of failure in trying new ideas. According to a survey by the Global Entrepreneurship Monitor, China does not rank well against other countries in the “fear of failure” rate among its would-be entrprepreneurs. The government acknowledges the pressures to succeed and avoid the shame of failure. It has lately told researchers to tolerate mistakes.
China’s most famous entrepreneur, Jack Ma of the e-commerce giant Alibaba, highlights this issue in his talks. “Failure has never stopped me; instead, it has trained me,” he says. Rather than be afraid of failure, he advises, people must get used to it. Change, he adds, is the best opportunity to develop new business ideas.
The US investigation still has far to go. But at the least, it is another signal for China to expand freedom and reduce fear among its researchers and entrepreneurs. The rest of the world expects – and assumes – China can do this.