October 23, 2015
The events of 2015 have shown that China is passing through a challenging transition: the labor-force expansion and surging investment that propelled three decades of growth are now weakening. This is a natural stage in the country’s economic development. Yet it raises questions such as how drastically the expansion of GDP will slow down and whether the country can tap new sources of growth. ... to realize consensus growth forecasts—5.5 to 6.5 percent a year—during the coming decade, China must generate two to three percentage points of annual GDP growth through innovation, broadly defined. If it does, innovation could contribute much of the $3 trillion to $5 trillion a year to GDP by 2025. China will have evolved from an “innovation sponge,” absorbing and adapting existing technology and knowledge from around the world, into a global innovation leader. Our analysis suggests that this transformation is possible, though far from inevitable. ... To develop a clearer view of this potential, we identified four innovation archetypes: customer focused, efficiency driven, engineering based, and science based. We then compared the actual global revenues of individual industries with what we would expect them to generate given China’s share of global GDP (12 percent in 2013). As the exhibit shows, Chinese companies that rely on customer-focused and efficiency-driven innovation—in industries such as household appliances, Internet software and services, solar panels, and construction machinery—perform relatively well.
1. Customer-focused innovation: The Chinese commercialization machine
2. Efficiency-driven innovation: The ecosystem advantage
3. Engineering-based innovation in ‘learning industries’
4. Science-based innovation: Novel Chinese approaches
- Also: McKinsey - Gauging the strength of Chinese innovation (FULL REPORT) > 15min
- Also: Re/code - No. 1 Producer, No. 1 Consumer (Book Excerpt) < 5min
- Also: Wall Street Journal - How Chinese Stocks Fell to Earth: ‘My Hairdresser Said It Was a Bull Market’ < 5min
- Also: Financial Times - China migration: At the turning point < 5min
Lowell Wood broke Edison's patent record and helped bring down the Soviet Union ... He adds that he’s not terribly good with the ordinary aspects of life—paying bills, say, or car washing. He’s too consumed with inventing solutions to the world’s problems. Ideas—really big ideas—keep bombarding his mind. “It’s like the rain forest,” he says. “Every afternoon, the rains come.” ... He’s an astrophysicist, a self-trained paleontologist and computer scientist, and, as of a few months ago, the most prolific inventor in U.S. history. ... “Lowell is the definition of a polymath,” Gates says. “It’s not just how much he knows, it’s the way his brain works. He gives himself the freedom to look at problems in a different way from everyone else. To me, that is the mark of a great inventor.” ... Wood attributes his ability to hop from subject to subject, making associations that sometimes lead to inventions, to reading—a lot. He subscribes to three dozen academic journals. “I have a terrible deficiency of willpower once I open an electronic table of contents for Physical Review Letters or the New England Journal of Medicine,” he says. “It’s just terribly difficult to pull myself away from them. There will be these three articles that I absolutely have to read before I can turn loose of this thing. If I don’t read them, I’m doomed. I’ll never come back to them because there will be the next day’s journals and the ones after that.” ... As part of his mental regimen, Wood refuses to make to-do lists, even for grocery shopping. If he forgets something at the store, he says, “I will kick myself vigorously.” He gives himself the same treatment at work. “If you make a mistake, you should not only not make that mistake again but also don’t make that class of mistake again,” he says. “That’s an exceedingly important concept to improve human performance at the individual scale.”
This is not the typical office of an oil-industry executive: No Remington bronzes, no autographed Super Bowl footballs. A Picasso-esque painting of a figure in red hangs on one wall, the precocious work of his daughter Elizabeth, now a publisher in L.A., when she was 16. A portrait of Koch’s father, Fred, hangs on a wall to the right of his desk. On another wall hangs a framed letter Koch found in his father’s safe deposit box after Fred’s death in 1967. Written in 1936, the letter expresses concern about the life insurance policies Fred had purchased to pay for his children’s education in case he died. “If you choose to let this money destroy your initiative and independence,” Fred wrote, “then it will be a curse to you and my action in giving it to you will have been a mistake.” ... “We’re destroying opportunities for the disadvantaged and creating welfare for the rich. This is coming about by misguided policies creating a permanent underclass, it’s crippling the economy and corrupting the business community.” ... “... the idea that we believe that people are going to be better off when they control their own lives rather than have somebody in power have what Hayek called the “Fatal Conceit,” and Easterly called the “Tyranny of Experts,” think they can tell people, force people to run their lives the way those in power think they should. So this threatens people in power, or people who believe the opposite have a different vision on how society can best function.” ... "What all this comes down to is you need an experimental discovery culture and model. You can study these things ‘till the end of time and not know because the future is unknown and unknowable. We try to do experiments at a level that we can afford to lose."
The English colonial legacy bequeathed a serious tea habit to Kenya. A super-sweet brew boiled up in milk rather than water, tea is the drink of choice at home and in government offices. As the world’s leading black tea exporter, Kenya brings in about $1bn a year from its production, which totalled 450,000 tonnes last year, nearly 10 times as much as coffee production. But the up-and-coming consumer is plumping for coffee, across the city and into its fringes. ... Suleiman says he goes for coffee because “big men” drink it. Mahiti concurs: “We’ve always had tea, but coffee is something that wasn’t there before: it’s like a sign of success when you drink coffee.” ... “If you want to be identified as someone who’s on an upward track, where better to do that than in a public space where you’re spending only a buck and a half to have a cup of coffee and say ‘I’ve made it, I’ve arrived,’” says Ashley, who explains the company deliberately never hurries customers from tables, even if they nurse their cup for hours to eke out time and free WiFi. “It’s a very inexpensive way to demonstrate your rise up in society.”
How a 500-year experiment to revive dormant microbes could reveal the secrets to cheating time ... For almost as long as we have known about micro-organisms, we have known about dormancy. In 1702, the Dutch biologist Antonie van Leeuwenhoek collected some dried ‘animalcules’ from a nearby gutter and added water. Peering through his handmade microscope, he observed that ‘they began to extend their bodies and in half an hour at least 100 of them were swimming about the glass’. ... Aged 70, van Leeuwenhoek had just discovered the dormant states of rotifers – small, wheel-shaped animals that can be found in many transient freshwater habitats. When conditions become too Spartan, these humble organisms contract into dry, oval-shaped husks in order to survive. ... Water is essential for life, and yet anhydrobiotes appear to get by without it. How? According to the ‘water replacement hypothesis’, they exchange their cellular fluid for sugars such as sucrose and trehalose. The result is a glass-like substance that not only retains the cell’s shape on rehydration, but also slows down a lot of unwanted chemical reactions. With this scaffolding in place, they reduce the fires of their metabolisms to embers, conserving their energy like a ground squirrel within its winter den, waiting for conditions to improve. They keep things ticking over.