Consumption-driven growth fosters innovation

A recent report on the top 100 most innovative global enterprises in 2012 by Thomson Reuters lists 47 US companies, 32 Asian companies and 21 European companies, says an article in 21st Century Business Herald. Excerpts:

No Chinese enterprises are included. Although this report may not be a real and objective depiction of the true picture, Chinese enterprises and governments still need to rethink how to improve the innovation of Chinese enterprises. 

Innovation is the foundation of economic growth, and productivity is the initial driving force for economic development. China's transformation of its economic growth model from an investment-driven style to a consumption-driven one builds the foundation for China to cultivate its innovative abilities.

Consumption is the base for enterprises to develop core competitive strengths. Only when enterprises verify the needs of consumers through market competition can enterprises realize breakthroughs in technology and improve their ability to provide services to consumers creatively.

Thus, the transformation of China's economic growth model provides the opportunity for Chinese enterprises to promote innovation. Yet, Chinese governments must construct market mechanisms to lower the costs of obtaining necessary information of consumers' needs for enterprises and to promote healthy market competition.

More important, former investment-driven growth is not conducive to boosting a constructive environment for enterprises to increase their input in developing innovative abilities. China must step up its efforts in intellectual property rights protection to ensure the most innovative enterprises gain the dividends they deserve.