Wharton Dean on China Economic Developmet
I had the honor of attending a talk this week on “US China relation and its implications on business and economics” by Dr. Geoffrey Garrett, Dean of The Wharton School. Among all the insightful analyses of the complex US-China relationship and his upbeat outlook, he succinctly summarized the China economic development in the following three stages:
1980-2000 low cost manufacturing
2000-2015 middle class consumers
2015 - innovation driven economic development
The first stage was all about trade while most companies are now more focusing on the second stage where China has several hundred millions of middle class consumers with disposable income. For the third stage of development, Dean Garrett pointed out many examples where China is already in the leading edge of innovation (e.g. mobile payment, shared mobility service, high speed rail). However, as China quickly moves to the next phase of development as an innovation driven economy, it would be interesting to see what it will take for international companies to be successful in this market.
I would love to hear your comments and thoughts.
Madhav and Xinjin, good question posed by Madhav and very thought-provoking response by Xinjin. I would also like to add that in order for Innovation to propagate in any emerging region/economy, aside from providing support of financial capital, progress of Human capital is very essential and that of the associated mindset. ?It will be interesting to observe how the emerging economies pave the path for the above.
The fundamental question is - what is the desired end goal (if any) that China (and, by extension, India, Indonesia and other emerging economies) has in mind for itself? The model proposed by the West if one of continuous economic growth which has been fueled by the low cost labor from overseas. Does China have a different vision for what constitutes a "prosperous" society?
China Veteran - Sales Marketing, After-Sales Support, Quality Assurance, Production, R&D
6 年The first stage included a wide range of issues. Production shifted from Taiwan (high quality/western business environment) to the mainland (fast buck/corruption/obsolete work units) in search of lower cost labor, and a massive lack of understanding and oversight on the part of western companies led to hugely expensive and time-wasting mistakes. The middle class is witnessing significant salary cuts and staff reductions, which is why, for example, cars sales in the world's largest new car market are plummeting. As a frightened middle class reacts, retail sales are no longer roaring.