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Leading Across New Borders: How to Succeed as the Center Shifts by Karen Cvitkovich, Christie Caldwell, Ernest Gundling

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Chapter 7Global Innovation: Beyond ProductsAgility to Innovate on a Global Scale

Innovation: The New Playing Field

Michael Porter once said that innovation is the central issue in economic prosperity. Over the past decade or more there has been a growing body of evidence that innovation is coming from outside of the developed countries, with significant implications for global organizations. Opportunities for innovation are rapidly evolving in many other marketplaces around the world, including Asia, Africa, and Latin America.

China's Automotive Market

The center of gravity of the world's automotive market has shifted dramatically. China's automotive market is now the largest in the world, with close to a quarter of global volume. Stepping out onto the noisy streets of Shanghai, you will be greeted by a fleet of Land Rovers, Porsches, and Maseratis, mixed in with Volkswagens, Buicks, Toyotas, and so on. Every major carmaker in the world is represented here, and many of them are currently making more than one-third—some almost two-thirds—of their profits in China.1 The number of vehicles sold in the country surpassed the U.S. sales volume during the recession in North America and Europe, and though the rate of market growth has slowed in recent years, sales remain far higher than those in either the United States or Europe.2 Within five years the Chinese automotive market could be more than 30 percent larger than that of the United States.

The structure of China's automotive ...

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