China – The new leader in Technology Innovation

For several years now, China has been manufacturing things designed in America and Europe. The West is now in a position where it can hardly manufacture anything competitively. Its only advantage is if the product is more expensive to ship than to build, and even there it has no export advantage.

Things have worked so far since the company responsible for design of the product tends to get a good bit of the profit and controls the relationship. As long as some of the product designed in Europe and America is sold in China those companies can make some money off of exports. Exports of intellectual property.

All of that changes, if China can figure out how to design products on it’s own. Especially if those products are preferred to ones designed in the west. Predictably, they are getting much better at product design. I saw this happening in publishing a few years ago and now we are seeing significant improvements in technology. Of course, if they are not careful they could loose the manufacturing cost advantage, but if they can hold onto that and design product themselves that sell well in the US and EU they could easily take over the world.

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