Since initiating market reforms in 1978, China’s GDP has grown an average of 10 percent a year, thus resulting in a social-economic rise of more than 500 million people out of poverty. Despite China’s momentous transformation in the global markets, the nation, which has quickly became the second-largest economy in the world, has struggled to prosper in another sector that could be detrimental to its future success: innovation.

From neo-Maoist factory assembly lines prevalent in the manufacturing industry, to force-fed styles of parenting and education popularized by Amy Chua’s novel Battle Hymn of a Tiger Mother; China has always been viewed as a nation lacking in the creative aspect of development. But, with a dramatic upward shift in R&D spending and university graduates, as well as recent changes in government policies regarding market freedom, China looks to be an upcoming powerhouse in innovation. However, China must hurdle over a few obstacles before it can venture into, and reap the benefits of, innovation.

Asia biotechFor instance, politics are a major inhibiting factor in China because of all the constraints and ‘no-go zones’ implemented by the government. Rooted to China’s overzealous state-control policies, especially in regards to government-led investments, problems in this dimension can only be resolved with free-market growth and a cultivation of the “curiosity” element of innovation.

Innovation is most often described as “finding a better way of doing something” and the “application of better solutions to meet new requirements and existing market needs.” Undoubtedly, China flourishes in satisfying the market demands for products; specifically the global need for apparel, toys, consumer electronics etc.. However, the merits of a majority of these items are not attributed to China’s creativity or inventiveness. As Singapore’s Prime Minister, Lee Hsien Loong, mentioned last year during a speech to a senior Communist Party school, “all eight Nobel Prize winners in science who are of Chinese descent either were or subsequently became American citizens.”

Another barrier China must face before entering the spectrum of innovation is intellectual-property protectionimposed by the state. Rather than too much state-control as mentioned previously, an additional problem is, in fact, too little government intervention. As China seeks to be more of a creative- and innovative-oriented country, the protection of intellectual property has become a major social concern.

Despite the obstacles aforementioned, China shows signs of moving in the right direction in cultivating and fostering a more creative-friendly environment. Firstly, while the United States still remains the most advanced technology haven in the world, resulting from greater amounts of time and money invested in Research and Development (R&D), China looks to be a nation that will soon catch up.  China’s R&D spending is projected to reach $284 billion dollars (a 22% increase from 2012), and is projected to surpass Europe by 2018 and the US by 2022.

Additionally, the mainland claims that soon it will implement a special court in Guangdong responsible for handling intellectual property (IP) disputes; a pressing issue that has been especially troublesome for innovative companies in China. IP rights serve to establish fair-competition amongst businesses throughout China, as suitable credit and compensation are ensured for firms and individuals immersed in the innovative field. According to Guangdong Governor Zhu Xiaodan, the province has “long enjoyed the freedom to experiment…the notion and the law of intellectual property is the key for indigenous innovation.”

Graduates of the Huazhong University of Science and Technology attend the bachelor's degree ceremony in Wuhan in central China's Hubei province Wednesday, June 24, 2009. Over 6,800 bachelors graduated at the ceremony, the biggest one ever held in China. (AP Photo) ** CHINA OUT **

China is also advancing in education as the nation has more and more recipients of university degrees, specifically in the math and science sectors of undergraduate studies. In 1999, fewer than 1 million Chinese students graduated from university; by 2013, the number leaped to an incredible 7 million Chinese students. 31 percent of China’s undergraduates earned a degree in engineering, as compared to 5 percent in the United States, which sets China up well for a future of innovation.

With an increasing number of students taking on engineering, a field that specifically requires outward thinking and modes of creative genius, China is on its way to producing the most innovative minds and products in the world. The only issue that must be noted before making predictions is the extreme levels of bureaucracy and intellectual dishonesty that arise, especially in China’s education system. As a result, many of its most talented graduates leave China to study or conduct research in other countries

Besides the pivotal role the government will play in China’s process of becoming an innovation powerhouse, China must also rely on the changes of a few cultural traditions that have been integrated in Chinese society for thousands of years.

For one, China must embrace a culture of risk taking (failure is a required element of innovation) however; this is not a cultural norm in China. Originating from Confucius principles; being obedient, adherent, and respectful of the rules are inherited traits prevalent in companies throughout China.

Secondly, promoting collaboration: there is a lack of cross-company communication and a reliance on the processes designed to develop and proliferate productivity, especially in manufacturing. Often in Chinese companies, traditional organizational and cultural barriers inhibit the much-needed exchange of ideas, insight, and solutions. For obvious reasons, this is an essential factor for the cultivation of innovation.