- Email: [email protected]
China’s Telecommunication Market—Entering a New Competitive Age
Book Reviews / Technovation 24 (2004) 921–925
duct, process, organisational) can be distinguished from each other, and furthermore attempts to assess the effects of different types of service innovations. The chapter among other things reveals an apparent confusion among service innovators regarding types and related effects of innovations. The first sector study, by Bower, deals with healthcare delivery, where three forces are identified as driving development: technological opportunity; growth in demand; and growth in costs. One particular feature of healthcare delivery is the many stakeholders with different agendas, which are likely to thwart many attempts of innovation in this area. In this sense healthcare delivery appears to distinguish itself from manufacturing as well as most other services. Two chapters refer to financial services, but whereas Chortatsiani uses data from financial services to illustrate the (more general?) role of relationship style as a factor determining product development, Nightingale, in the subsequent chapter, digs more deeply into the nature of innovation in financial services, concentrating on the role of infrastructure technologies. The diversity of different innovation processes is stressed, in particular the differences between innovation in financial services performing functions for customers and manufacturing sectors providing goods that provide functions. Gann and Salter look at a highly innovative part of what is perceived as a low-innovation sector: construction. Focus is on designers, consultant engineers and other associated services, which are described as technological gatekeepers for new ideas in the construction sector. These service providers have developed new ‘‘upstream’’ as well as ‘‘downstream’’ services for the construction industry. Downstream services are also the focus of attention in a chapter by Davies, who addresses the question of whether manufacturing, in particular in firms that supply complex products and systems, increasingly is being replaced by (downstream) services. Davies, however, finds that the picture is more blurred than it might appear at first glance, this being related to the boundaries between manufacturing and services becoming more blurred: traditional manufacturing firms, as well as firms coming from services, thus share an increased attention on providing customers with integrated systems, drawing on capabilities rooted in both main sectors of the economy. The final part of the book wraps up with a discussion of applying good innovation management practices from manufacturing to services. Expanding the analysis on the UK and US data applied in chapters 1 and 6, Hull and Tidd propose a product-based framework for the development and delivery of service products. In the last chapter, Hull applies case studies related to the US survey in an analysis of good practices of product development in service enterprises. As
923
in the other chapters applying these data, Hull finds that methods of product development derived from manufacturing seem to work well in services, although there is room for improvement, especially in relation to exploiting tools of analysis and decision support systems in product development processes. It is primarily in the chapters by the two editors of the book that parallels are drawn between manufacturing and services, whereas the stated goal of detecting similarities and differences between manufacturing and services has had a smaller influence on the remaining chapters. And none of the chapters present direct comparisons between manufacturing and services, which would be an obvious step in order to come closer to what are the main similarities and differences between the two main sectors of the economy. As the brief summary of the book given here indicates, many topics related to service innovation are covered. This is the strength as well as a weakness of the book. On the positive side, the book provides insights into many aspects of service innovation. But—as it is often the case with anthologies—the book is not very coherent: in some chapters manufacturing practices are found to fit well with what is going on in services, whereas other chapters stress the peculiarities of individual service industries; but there is not systematic summing up and reflection on the results in relation to the goal stated in the introduction. Thus, as also stated by Hull and Tidd in the concluding remarks of chapter 13, there is still need for further research on the ways that service innovation is distinctive from (and, one might add, similar to) innovation in manufacturing—as well as on the impact of the increasing blurriness of the boundaries between the two sectors.
References Coombs, R., Miles, I., 2000. Innovation, measurement and services: the new problematique. In: Metcalfe, J.S., Miles, I. (Eds.), Innovation Systems in the Service Economy. Measurement and Case Study Analysis. Kluwer, Boston, pp. 85–103.
Ina Drejer, Department of Business Studies, DRUID and ACE, Aalborg University, Fibigerstraede 4, 9220 Aalborg O, Denmark E-mail address: [email protected] doi:10.1016/j.technovation.2004.07.011
China’s Telecommunication Market—Entering a New Competitive Age; Ding Lu and Chee Kong Wong (Eds.);
924
Book Reviews / Technovation 24 (2004) 921–925
Edward Elgar, 2003, 177 pages (incl. Index), hardback, ISBN 1-84064-431-1 In the past two decades China’s spectacular GDP growth has been the envy of many developing, and of some developed, economies. According to The Economist, the country has accounted for a quarter of global GDP growth over the past five years and has expanded an average 9% a year over the past 25 years.1 China’s potential is huge and, of the many dynamic sectors in this rapidly expanding economy, telecommunications is perhaps the industry that is enjoying the largest paced growth. Motorola, for example, is the largest foreign company in the country, with locally generated revenues of US$ 5.6 billion in 2002. China in turn, has become Motorola’s second largest market, worth 14% of group sales. China’s Telecommunication Market provides important guidelines to understanding and finding business opportunities in this fast-growing market. The strength of this book is that it provides exactly what it sets out to do, that is, to furnish a navigation map to understand the evolution of the sector in China. According to the authors, the main aims of the book are: to provide the reader with a vision for identifying the forces of change; a basis for comprehending unfolding events, and a map for finding business opportunities. Historical and statistical analysis is used to trace institutional, market and technological developments in the telecom industry from the founding of the People’s Republic of China in 1949 to accession to the World Trade Organisation in November 2001. A neat and useful summary is provided at the end of each chapter, allowing a bird’s eye view of main points. China has important lessons to teach developing countries Accession to the World Trade Organisation largely on its own terms, that is, ‘‘without giving up too much ‘‘cream’’ (industrial revenues) to outsiders’’, as stated in the book, is just one of these lessons. Future telecommunication policy research would benefit from empirical comparisons with other developing countries that followed roughly similar import substitution industrial development paths. This is particularly applicable when considering telecom network expansion and equipment industry development where many other large middle Income countries established state owned enterprises and implemented protectionist policies in the 1960s and 1970s, including Indonesia, Malaysia, Brazil and Mexico. These countries are now facing open, globalized telecommunication markets and technology is an important Achilles heel. Most developing countries run a 1 The Economist April 17th 2004: 71 and March 20th 2004, ‘‘Business in China, A Survey’’.
deficit on their technology trade with the rest of the world, technology imports and exports are controlled by foreign firms and these will not readily hand over their technology or management skills to a Chinese (or any other) partner. The National Systems of Innovation literature has important contributions in this respect. As pointed out by Chris Freeman (2003), research on technological and innovation systems is crucial for policy-making. The rapid pace of change and its international dimensions mean that provides must be continuously adapted and reformulated as technology evolves. What is needed for the extremely difficult task of strategic policymaking is not just information but knowledge and understanding of the relevant systems. Other proponents, such as Cassiolato and Lastres (2003), emphasise that this approach takes into the account the productive, financial, social, institutional and political spheres, as well as the micro, meso and macro-dimensions making it an extremely valuable concept for developing countries.2 The rapid pace of technology change, the vastness of China’s market, as exemplified in the exponential growth of its ‘‘netizen’’ (Internet-user) population, that comprised 50 million registered Internet subscribers by the end of 2002, and the complex nature of China’s political and business environment make for a very rich scenario. Any person who had the opportunity, such as this reviewer, of living in China not so long ago, say, in the late 1970s, can remember the extreme difficulty of placing an international telephone call. This process involved many steps and required patience and persistence, much akin to procedures in the early days of international telephony in the early 20th century in advanced countries. A request for an international call would be lodged with an operator who would later complete the call, sometimes not in the same day. There was something magical and ritualistic about this transaction: the delay, the high expectations, the satellite echo all contributed to rendering ensuing telephone conversations limited, rather unreal and often frustrating. Placing domestic calls, to the scant number of commercial lines available was also difficult. As this book clearly describes, China has indeed come a long way. Nonetheless, many studies suggest that harnessing technology for creative socio-economic development should remain a particular concern for 2
Freeman, C. (2003) ‘‘A hard landing for the ‘‘New Economy’’? Information technology and the United States national system of innovation’’, pages 119–140; and Lastres, H; Cassiolato, J. and Maciel, M. (2003). ‘‘Systems of Innovation for development in the knowledge era: an introduction’’, pages 1–35. Both in Systems of Innovation and Development: Evidence from Brazil. Cassiolato, J.; Lastres, H.; Maciel, M. (editors) Edward Elgar, Cheltenham, UK, Northampton, MA, USA.
Book Reviews / Technovation 24 (2004) 921–925
strategic policy-making in developing countries. In this context, policies that seek to strengthen technological and institutional capabilities and also develop human resources (a central issue in the Knowledge-Based Economy) are essential to ensure that market-oriented reforms effectively contribute to bridge the still immense gaps between the telephony ‘‘have and have nots’’. These issues are not sufficiently addressed in this book. Future research on telecommunication and development policy in China, and other developing countries, would greatly benefit from analyses that explicitly take into account the many dimensions that
925
go into building a robust national system of innovation. Ana Arroio, Research Network for Local Productive and Innovative Systems—RedeSist, Economics Institute at the Federal University of Rio de Janeiro, Brazil E-mail address: aarroio@firjan.org.br doi:10.1016/j.technovation.2004.07.020
duct, process, organisational) can be distinguished from each other, and furthermore attempts to assess the effects of different types of service innovations. The chapter among other things reveals an apparent confusion among service innovators regarding types and related effects of innovations. The first sector study, by Bower, deals with healthcare delivery, where three forces are identified as driving development: technological opportunity; growth in demand; and growth in costs. One particular feature of healthcare delivery is the many stakeholders with different agendas, which are likely to thwart many attempts of innovation in this area. In this sense healthcare delivery appears to distinguish itself from manufacturing as well as most other services. Two chapters refer to financial services, but whereas Chortatsiani uses data from financial services to illustrate the (more general?) role of relationship style as a factor determining product development, Nightingale, in the subsequent chapter, digs more deeply into the nature of innovation in financial services, concentrating on the role of infrastructure technologies. The diversity of different innovation processes is stressed, in particular the differences between innovation in financial services performing functions for customers and manufacturing sectors providing goods that provide functions. Gann and Salter look at a highly innovative part of what is perceived as a low-innovation sector: construction. Focus is on designers, consultant engineers and other associated services, which are described as technological gatekeepers for new ideas in the construction sector. These service providers have developed new ‘‘upstream’’ as well as ‘‘downstream’’ services for the construction industry. Downstream services are also the focus of attention in a chapter by Davies, who addresses the question of whether manufacturing, in particular in firms that supply complex products and systems, increasingly is being replaced by (downstream) services. Davies, however, finds that the picture is more blurred than it might appear at first glance, this being related to the boundaries between manufacturing and services becoming more blurred: traditional manufacturing firms, as well as firms coming from services, thus share an increased attention on providing customers with integrated systems, drawing on capabilities rooted in both main sectors of the economy. The final part of the book wraps up with a discussion of applying good innovation management practices from manufacturing to services. Expanding the analysis on the UK and US data applied in chapters 1 and 6, Hull and Tidd propose a product-based framework for the development and delivery of service products. In the last chapter, Hull applies case studies related to the US survey in an analysis of good practices of product development in service enterprises. As
923
in the other chapters applying these data, Hull finds that methods of product development derived from manufacturing seem to work well in services, although there is room for improvement, especially in relation to exploiting tools of analysis and decision support systems in product development processes. It is primarily in the chapters by the two editors of the book that parallels are drawn between manufacturing and services, whereas the stated goal of detecting similarities and differences between manufacturing and services has had a smaller influence on the remaining chapters. And none of the chapters present direct comparisons between manufacturing and services, which would be an obvious step in order to come closer to what are the main similarities and differences between the two main sectors of the economy. As the brief summary of the book given here indicates, many topics related to service innovation are covered. This is the strength as well as a weakness of the book. On the positive side, the book provides insights into many aspects of service innovation. But—as it is often the case with anthologies—the book is not very coherent: in some chapters manufacturing practices are found to fit well with what is going on in services, whereas other chapters stress the peculiarities of individual service industries; but there is not systematic summing up and reflection on the results in relation to the goal stated in the introduction. Thus, as also stated by Hull and Tidd in the concluding remarks of chapter 13, there is still need for further research on the ways that service innovation is distinctive from (and, one might add, similar to) innovation in manufacturing—as well as on the impact of the increasing blurriness of the boundaries between the two sectors.
References Coombs, R., Miles, I., 2000. Innovation, measurement and services: the new problematique. In: Metcalfe, J.S., Miles, I. (Eds.), Innovation Systems in the Service Economy. Measurement and Case Study Analysis. Kluwer, Boston, pp. 85–103.
Ina Drejer, Department of Business Studies, DRUID and ACE, Aalborg University, Fibigerstraede 4, 9220 Aalborg O, Denmark E-mail address: [email protected] doi:10.1016/j.technovation.2004.07.011
China’s Telecommunication Market—Entering a New Competitive Age; Ding Lu and Chee Kong Wong (Eds.);
924
Book Reviews / Technovation 24 (2004) 921–925
Edward Elgar, 2003, 177 pages (incl. Index), hardback, ISBN 1-84064-431-1 In the past two decades China’s spectacular GDP growth has been the envy of many developing, and of some developed, economies. According to The Economist, the country has accounted for a quarter of global GDP growth over the past five years and has expanded an average 9% a year over the past 25 years.1 China’s potential is huge and, of the many dynamic sectors in this rapidly expanding economy, telecommunications is perhaps the industry that is enjoying the largest paced growth. Motorola, for example, is the largest foreign company in the country, with locally generated revenues of US$ 5.6 billion in 2002. China in turn, has become Motorola’s second largest market, worth 14% of group sales. China’s Telecommunication Market provides important guidelines to understanding and finding business opportunities in this fast-growing market. The strength of this book is that it provides exactly what it sets out to do, that is, to furnish a navigation map to understand the evolution of the sector in China. According to the authors, the main aims of the book are: to provide the reader with a vision for identifying the forces of change; a basis for comprehending unfolding events, and a map for finding business opportunities. Historical and statistical analysis is used to trace institutional, market and technological developments in the telecom industry from the founding of the People’s Republic of China in 1949 to accession to the World Trade Organisation in November 2001. A neat and useful summary is provided at the end of each chapter, allowing a bird’s eye view of main points. China has important lessons to teach developing countries Accession to the World Trade Organisation largely on its own terms, that is, ‘‘without giving up too much ‘‘cream’’ (industrial revenues) to outsiders’’, as stated in the book, is just one of these lessons. Future telecommunication policy research would benefit from empirical comparisons with other developing countries that followed roughly similar import substitution industrial development paths. This is particularly applicable when considering telecom network expansion and equipment industry development where many other large middle Income countries established state owned enterprises and implemented protectionist policies in the 1960s and 1970s, including Indonesia, Malaysia, Brazil and Mexico. These countries are now facing open, globalized telecommunication markets and technology is an important Achilles heel. Most developing countries run a 1 The Economist April 17th 2004: 71 and March 20th 2004, ‘‘Business in China, A Survey’’.
deficit on their technology trade with the rest of the world, technology imports and exports are controlled by foreign firms and these will not readily hand over their technology or management skills to a Chinese (or any other) partner. The National Systems of Innovation literature has important contributions in this respect. As pointed out by Chris Freeman (2003), research on technological and innovation systems is crucial for policy-making. The rapid pace of change and its international dimensions mean that provides must be continuously adapted and reformulated as technology evolves. What is needed for the extremely difficult task of strategic policymaking is not just information but knowledge and understanding of the relevant systems. Other proponents, such as Cassiolato and Lastres (2003), emphasise that this approach takes into the account the productive, financial, social, institutional and political spheres, as well as the micro, meso and macro-dimensions making it an extremely valuable concept for developing countries.2 The rapid pace of technology change, the vastness of China’s market, as exemplified in the exponential growth of its ‘‘netizen’’ (Internet-user) population, that comprised 50 million registered Internet subscribers by the end of 2002, and the complex nature of China’s political and business environment make for a very rich scenario. Any person who had the opportunity, such as this reviewer, of living in China not so long ago, say, in the late 1970s, can remember the extreme difficulty of placing an international telephone call. This process involved many steps and required patience and persistence, much akin to procedures in the early days of international telephony in the early 20th century in advanced countries. A request for an international call would be lodged with an operator who would later complete the call, sometimes not in the same day. There was something magical and ritualistic about this transaction: the delay, the high expectations, the satellite echo all contributed to rendering ensuing telephone conversations limited, rather unreal and often frustrating. Placing domestic calls, to the scant number of commercial lines available was also difficult. As this book clearly describes, China has indeed come a long way. Nonetheless, many studies suggest that harnessing technology for creative socio-economic development should remain a particular concern for 2
Freeman, C. (2003) ‘‘A hard landing for the ‘‘New Economy’’? Information technology and the United States national system of innovation’’, pages 119–140; and Lastres, H; Cassiolato, J. and Maciel, M. (2003). ‘‘Systems of Innovation for development in the knowledge era: an introduction’’, pages 1–35. Both in Systems of Innovation and Development: Evidence from Brazil. Cassiolato, J.; Lastres, H.; Maciel, M. (editors) Edward Elgar, Cheltenham, UK, Northampton, MA, USA.
Book Reviews / Technovation 24 (2004) 921–925
strategic policy-making in developing countries. In this context, policies that seek to strengthen technological and institutional capabilities and also develop human resources (a central issue in the Knowledge-Based Economy) are essential to ensure that market-oriented reforms effectively contribute to bridge the still immense gaps between the telephony ‘‘have and have nots’’. These issues are not sufficiently addressed in this book. Future research on telecommunication and development policy in China, and other developing countries, would greatly benefit from analyses that explicitly take into account the many dimensions that
925
go into building a robust national system of innovation. Ana Arroio, Research Network for Local Productive and Innovative Systems—RedeSist, Economics Institute at the Federal University of Rio de Janeiro, Brazil E-mail address: aarroio@firjan.org.br doi:10.1016/j.technovation.2004.07.020