Indigenous Innovation and Economic Development: Lessons from China's Leap into the Information Age

Abstract

With a view to furthering our understanding of the process of indigenous innovation and its impact on economic development, this paper summarizes case studies of the evolution, from their origins to the late 1990s, of four of China's leading computer electronics companies: Stone, Legend, Great Wall, and Founder. The original case studies constitute the body of the late Qiwen Lu's important book, China's Leap into the Information Age: Innovation and Organization in the Computer Industry. A Chinese national, with a background in chemical engineering, Lu obtained his PhD in sociology from Harvard University in 1997 and was an INSEAD faculty member at the time of his death in August 1999, just 2 months after submitting his completed book manuscript to Oxford University Press. In this review essay, I present Lu's findings within a "social conditions of innovative enterprise" framework that stresses the importance of strategic control, organizational integration, and financial commitment in the innovation process. I conclude by considering the implications of this interpretation of these case studies for comprehending the dynamics of indigenous innovation and the debates on economic development.