Innovation practices success in China: The use of innovation mechanisms in Chinese SOEs

Purpose: The climate for technical innovation has been improving in the past few years in China. This paper describes a case research concerning technical innovation practices success in three Chinese state-owned enterprises (SOEs) in the manufacturing industry. This is executed by applying a technical innovation audit tool based on „Western‟ good practices. Methodology: Studies on technical innovation in the Chinese SOEs started in the 1990s, but most investigations in this field were based on statistical survey and mathematical modelling. In this research, case study research method, including such strategies as open-ended, in-depth questions, intensive interviews and observations, are applied for the validity of information. Findings: The data and results reveal that the investigated Chinese SOEs have already some mechanisms for innovation in place. But there is still room for improvement and enhancement with respect to the effect on innovation success. It is also concluded that benchmarking (through the application of the technical innovation audit tool) does guide the Chinese management toward deciding which innovation mechanisms to adopt so as to provide the basics for innovation success. Additionally, based on the case studies the interesting conclusion could be drawn: In the context of the Chinese economy in transition, the case companies with less openness to the market (i.e. with high government involvement) have a more widespread use of innovation mechanisms.