That seems to be a problem with many companies. Chinese companies are innovating aggressively while others don’t. You see that with 3d printers where Bambu is kicking ass. I remember when GoPro did a drone and it simply wasn’t good. Or American carmakers are trying to turn back the clock on electric instead of embracing it.
I know people like to say that it is American companies that innovate and Chinese companies just copies.
This may be true in certain areas, but I think some Chinese companies do take the idea and then they iterate on the product to the point that it outshines the original product all while the original company refuses to act.
Sure there are initial product R&D cost overheads but I don't believe that's the only reason they are not competitive.
I generally think both attitudes are a too simplistic look.
Basically, the most common pattern with „commodity“ tech seems to be like this.
Western companies go ahead and expend a lot of R&D to establish a new market or validate a market need. Chinese companies go ahead and flood the market with slighly worse but significantly cheaper versions of said product (often forcing the „inventor“ company to take a significant margin hit, reducing new R&D budgets).
Chinese companies them spend R&D on iterating on new features of the product (which they also can, because they saved a lot of R&D on the first product iteration).
„Western“ companies mostly created the situation for themselves. They basically consolidated all their manufacturing in China. China has also invested tremendous amounts into education and qualification. So China effectively turned from „the workbench of the world“ into a country where companies have extensive knowledge in product design, development, testing and manufacturing - as well as a mostly local supply chain.
Western politicians did it to us. China was allowed into the WTO but never held to any of the rules.
It is still treated with kid gloves by governments as if it were a developing country despite the fact that it hasn't needed such treatment for decades.
That’s an over simplified view of the world that completely ignores all the benefits of outsourcing our manufacturing to China brought. It may have been short sighted of us, and we may have over valued those short term benefits, over the long term costs, but it wasn’t a decision made by some shadowy group of “politicians”. It was a collective societal decision, to choose easy consumerism, cheap products, and rapid growth in quality of life, over the long term viability of societies.
But this story hasn’t ended yet, and China certainly isn’t treated like a developing country. It’s treated like a country that has a vice grip on our economic nether regions, and we really don’t want to make any sudden unexpected moves.
Those benefits were chiefly lower prices for the manufactured goods. But the Federal Reserve interpreted this as a problem per their mandate to keep CPI going upwards, and created a bunch of new money that went into asset bubbles. So the "benefits" to the average person also included housing unaffordability and the general financialization of everything. Viewed through this lens, it does not seem like any sort of collective societal decision.
No, as someone in the western side of product development things. The problem is studied in the standard MBA course for Strategy, without even China mentioned.
First-mover advantage, which comes from R&D into new markets is short lived no matter what. It is critical for firms that hit new ground to find ways to continue to grow their position and market as soon as they can. Copy-cat firms always always come, even big western megacorps love to come in and push out the little western corps, this is typically what is taught in said MBA class. Depending on the market, making newer products that are cheaper is absolutely something a firm must evaluate if there is a demand for it that can be a position and a threat to them.
It's simply the song and dance of the business lifecycle. It's one of the many reasons why 90% of startups fail.
iRobot hasn't got that excuse. They had market dominance and high margins for long enough that, had they retained focus, they could've created follow up products that would've made for durable, defensible market leadership, even if not every product was a success. I hope everyone is clear that that's the world we live in now <cough>Model Y</cough>.
DJI as consumer and professional drones seems like they‘re most certainly they are also an R&D leader given the fact that there are essentially 0 western competitors.
When it comes to more commodity tech, batteries immediately come to mind. Chins has spent years funding battery research and they are now the biggest supplier for LiIon batteries of basically all kinds. Solar panels seem like another example.
Every category I can think of where China is near-first there is some international manufacturer that has a better product.
Several areas where there are much higher volumes or outstandingly better value though. Things like automotive lidar, construction assemblys (like double glazed window units), consumer electronics like quadcopters.
I recently bought a handheld spectrophotometer for work (color assessment). The product from the leading US company (X-Rite) is ~US$15k in my market. I bought the Chinese equivalent for US$3k. Maybe if I needed guaranteed nine 9s of colour accuracy the US product would be worth it, but for 95% of users in the market, the Chinese product is more than fine.
I have a vague theory that China's massive home market of poorer people keeps the innovation going. There's always an upside for making something 1% cheaper and simpler as more people can buy it.
That gets mocked by rich people in rich countries in the short term but then leads to disruptive innovation from below, cheaper, simpler items growing and eating the market.
I think you are on to something. In the US I feel the focus is more and more on catering to the maybe top 20% who can afford to pay a lot more for things. There are less and less low end cars. Concerts and sports events are super expensive. New apartments are usually in the higher price range. No starter homes anymore. Instead of innovating, we just increase the price of assets.
BEVs most certainly aren‘t. Chinese EVs are strongly competing on price. Based on my own experience with them (n=4). They are very good as a EV, solid as a rolling smartphone, but not leading as being a car. Given the choice, I still would prefer a BMW EV any day.
However, batteries as a commodity are a good example where china is leading as volume and R&D leader
They are more than capable. I have just looked at what BMW, Mercedes and Audi have on offer. Then compare what Zeekr and Xpeng has on offer (7X, G9). Quality wise they feel the same or even better.
While I agree as a "complete car" the full package might not quite be there yet. But that is from a European perspective as they mostly are focused on their home markets. But this is changing. This is then simply iterating for product/market fit.
Personally I find the major problems in chinese cars are the software. That is the easy fix and they are getting closer with each iteration.
So much that today I would choose a Zeekr 7X but choose to postpone as the software was too annoying (adaptive cruise control, lane assist, sign recognition, auto brake, audio cues).
The big loss we have with EVs are servicability. But that is a universal problem with all automakers.
I don‘t care all that much about cars, my n is soley based on the cars i got provided for business trips. One Xpeng (no clue which) was among thise vehicles.
The main problem I see (beyond my i4 just being significantly nicer to drive) is replacement parts. The chinese EV companies are replacement parts and a qualified repair network. Replacement part availability is rather bad across the board, which has a number of cascade effects, but primarily higher insurance premiums. To add, there is also the fact that it looks like the EV market in china will consolidate not too far in the future, most likely compromising long term maintainability.
Yeah, "Chinese companies just copies" was 10-15 years or beyond. No way is that relevant now.
I've been wondering about why this is. With no evidence, I wondered if one of the reasons is the long term result of the many design and engineering graduates (I notice an incredible amount in the industry I work in) who were educated in the "best western uni's" and have now returned home and grown up.
They were a honeypot for said uni's for so long. But the end result may now mean they're kicking all asses in product markets.
It can't just be cheap labour ... or maybe it's the combination.
While I would love to attribute it to their culture of hard work I believe the credit should go to the combined effect of poor choices made in the west. You cant begin to list our spending on bullshit directly nor instances of money intended for useful things that was lost in bureaucracy. China does this too of course but we are so much better at it.
It is definitely still relevant. A friend showed me two products- one from a US manufacturing company he worked for, and one on alibaba- that were practically identical. One was designed and developed, the other an illegal rip off.
The lack of WTO rule enforcement has always been a problem.
I feel like there is a hypothesis that open source and open science has helped the West but the IP laws have slowed innovation whereas China is kind of an open source culture internally which confera an advantage.
> American companies that innovate and Chinese companies just copies.
Let's take Roomba as the example, because "innovate" does not mean what people think it means.
Roomba invented the consumer robot floor care machine and won the market early on.
Roomba's competitors innovated more (iteratively adding features) and Roomba has now lost it's independence.
See Blackberry, Motorola for some more recent examples. What the lesson is: there's only one way to go when you are #1 in your market category. You cannot allow gravity to work.
Pretty much every American company is just a bank with extra steps.
The big boys would rather own real estate and balance books than sink money into R&D. And acquiring companies is simply easier, and it's basically a broken strategy. If you just keep consolidating you just get a higher and higher valuation, while doing literally nothing.
> Sure there are initial product R&D cost overheads
I think this, plus different attitudes to intellectual property are the two big reasons western companies can’t compete.
The general strategy for R&D in the west is to spend significant sums developing a new technology, then building an IP moat around it to prevent direct competition. Our IP laws make this approach viable, and it allows companies to develop something new, then exploit it for decades without needing to innovate further.
China on the other hand does not have this approach to IP. Copying is rife, even between Chinese companies, and generally the idea of being given a state enforced monopoly just because you were first is laughable. As a result, when one Chinese company figures something out, that technology, process, technique, rapidly spreads around the entire market, and all of the competing companies benefit.
This creates few interesting side-effects.
* One a ginormous ecosystem of basic parts and components that are basically common between all competitors in a market (looks at the LiDAR units of robot vacs). This drastically lowers the barrier of entry for new players, it’s easy for them to get access to everything they need to build a “good enough” product, without having to do much R&D themselves.
* Two, it forces all companies to innovate and developer technology continuously. There is no state enforced monopoly for IP, so companies can only maintain an edge by innovating and advancing faster than their competitors at all time.
* Three, it’s makes a failure to constantly innovate an absolute death sentence for a company. Not just because they loose their edge, but because it takes time to rebuild the R&D skills needed to innovate as fast as their competitors. Once you start falling behind, you can never catch up, there is no space to financialise a company and sweat its assets. It’ll be dead before you got any return.
All this creates huge problems for companies like Roomba. They developed so very cool tech early on, but stopped innovating as fast, thinking they had a strong edge over any of their competitors, and solid IP moat. Unfortunately once Chinese companies caught up, and figured out how to get around their moat, its was impossible for Roomba defend against these new competitors. They were able to innovate orders of magnitude faster, because the environment that created meant only the fastest innovating companies could survive, they had huge momentum, and also a huge common core of shared components that had driven the cost of a basic robot vac to well under anything iRobot could achieve.
The funny thing is that Bambu didn't innovate. They just made it work really, really well.
I've owned a few 3d printers, including a kit printer, and the Bambu doesn't have any tech that other printers don't. They just always work well, and are easy to maintain.
Others are finally catching up, though. Snapmaker really scared them with the U1 (which is getting insane reviews), and Prusa has finally stepped up and started innovating again, too. The Centauri Carbon is another really good entry-level printer as well and it's eating into Bambu's market.
What do you mean they didn't innovative? The H2D and the AMS are new techniques and their latest release is certainly innovative with the 6 extra hotends
The H2D's printer/laser combo was done by Snapmaker before that, and the "2 heads" thing was done numerous times in many different ways before the H2D.
The AMS may not have looked exactly like that, but the same idea was already in place by Prusa at least.
Tool changers are not new, and the way that the extra hotends are held and dispensed was already in use in industrial machines. The "6 extra hotends" thing ... I'm willing to admit that might have been an innovation not yet seen in the 3d printing space, but BondTech announced their INDX before Bambu announced their solution. Both were in R&D for years before that, of course.
But Bambu was big and popular long before their current generation of printers. Only the AMS could be seen to contribute to their popularity, and again, it was because it works so well, not because it was a new idea.
"make changes in something established, especially by introducing new methods, ideas, or products." according to Oxford.
It's a stretch to me to think that "make it work reliably" is a new idea, and their products and methods were all already done by others, but less reliably.
Same for drones, and you know why? Because all of these civilian technologies can be easily leveraged for military... so a) they get the good stuff first because they're leading the sector and b) western countries buy their shit instead of making their own, which means we don't develop the tech and we effectively subsidise theirs
Can't blame them really, they mastered the rules of the game we forced them to play.
Chinese companies don't have quarterly financial metrics to report to shareholders, which result in severe punishment if the "growth at all costs" strategy isn't followed. This means chasing quarterly profit over innovation, because it's much easier to milk an asset for as long as possible until suddenly it isn't and you're left behind. But that doesn't matter when the pressure is entirely placed on showing financial growth three months from now. Chinese companies are allowed to strategize for the long term, and receive assistance from the CCP to dominate foreign rivals.
They're playing the long game while we're playing the "whose dick I have to suck to get a better position in the next 5 years" at every level of the hierarchy both politically and industrially.
We moved all our factories there thinking they'd work for cheap and stay peasants forever. Meanwhile their education seriously leveled up while ours stagnated (at best) or declined. In the meantime they also mastered manufacturing techniques, and now they're slowly taking the lead over pretty much everything. Couple that with an authoritarian regime still viewing the world through the historical long term prism and you get a pretty good combo. We ended up losing the mass, know-how and innovation capabilities, all at once in ~50 years.
I hope we never have a hot conflict with them because all their drones/3d printing/thermal vision/&c. companies will produce more kamikaze drone in a day than we'll produce in a year.
You're not totally wrong, except the US didn't lose it's talent. Instead it all went to software and finance, which pay drastically more, with much comfier working conditions, and much more generous benefits then becoming a machine tool maker.
The US is an advanced, mature, economy. Our children three generations back aspired to never don a blue collar. We would lead the world at the absolute cutting edge, and delegate the rest to lower economies. That's what we did, and that's what we have. So now we just argue about the need for people to go back and do dirty work, but ain't nobody volunteering to give up their $150k/yr hybrid job to make $80k commuting 5 days a week to process engineer job at scary health hazards factory. Ain't no VC funding an e-bike factory when an e-bike picker app costs 1/1000 the cost and can be done with a team of 5 people and scaled to 50 million users.
Totally agree on those points too, but I think you're giving US companies too much credit when you say:
> playing the long game while we're playing the "whose dick I have to suck to get a better position in the next 5 years"
5 years is generous. I'd say a year at most. Just keep delivering gold statues to the White House in order curry favor for a little while longer; meanwhile, keep chasing the profits at the expense of longevity, as required by law for public companies.
