Technical innovation success in China: The use of innovation mechanisms in Chinese SOEs

Climate for technical innovation has been improving in the past few years in China. This Paper describes a case research related to technical innovation in three Chinese state-owned enterprises (SOEs) in the manufacturing industry, by applying a Western technical audit tool. The data and findings reveal that the investigated Chinese SOEs have already some mechanisms for innovation in place but there is room for improvement and enhancement with respect to the effect on innovation success. It is also concluded that benchmarking (through the application of the audit tool) may not guarantee improved innovation performance, but it does guide management toward deciding which innovation mechanisms to adopt so as to provide the basics for innovation success. Last but not least we draw the interesting conclusion that in the economy in transition in China, companies with less openness to the market (i.e. with high government involvement), there was a more widespread use of innovation mechanisms. This finding seems to contradict the positive relationship between market focus and innovativeness as suggested in ‘Western’ innovation management theories, and it enriches to a certain extent the theory of transition.