Lessons China can draw from Apple
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China has to move into higher value added production - numerous speeches and articles by ministers rightly stress this.
An examination of 2011's list of the world's most valuable brands, published by international advertising and public relations giant WPP, confirms key lessons for this.
The emphasis on how China can move into high value production currently tends to stress technology. But, as widely reported in China, it is Apple that has become the world's most valuable brand.
Apple of course, by most industries' standards, is a high tech firm. But Apple is not famous for fundamental technological research. It did not create the laser - as did AT&T and the Hughes Aircraft Corporation - or the transistor - as did AT&T and Texas Instruments. It was not a company that produced the world's first microprocessor, as did Intel - a company continuing to demonstrate technological prowess in the recently announced revolutionary three dimensional 'Tri-Gate' microprocessor.
Apple did not become the world's most valuable brand due to strength in fundamental technological and scientific research. Nor is the strength of Steve Jobs, its creator, in that field. Apple's outstanding skill - shown in its series of world beating products stretching from the Macintosh, through iPod, iPhone to iPad - is to mass produce products which the user can individualize.
Apple is the greatest master of design in the real sense of that term. As Leander Kahney noted: "For Jobs, design isn't decoration. It's not the surface appearance of a product. It's not about the color or the stylistic details. For Jobs, design is the way the product works. Design is function not form."
Apple's concentration on design is exemplified in its invention of the 'unpacking routine' -- something Steve Jobs personally leads. This utilizes the simple point that a user's first contact with a product is taking it out of the box. How that leads them to easily operate the product is part of the user experience.
Apple's focus on design is relentless. Each new product goes through hundreds of mock-ups. Product development from the start is through mixed teams of designers and engineers.
Apple is naturally not the only company pursuing this method.
Samsung is another company grasping the centrality of design. Patrick Whitney, director of the Illinois Institute of Technology's design institute, remarked: "Samsung is the poster child from using design to increase brand value and market share."
Samsung learnt to follow Apple's route of incorporating designers into product development from the first step. The results are seen in Samsung's Bordeaux TV becoming the world's best selling model, and the firm being No. 2 to Apple in smartphones.
Intel and Apple's recent results illustrate this point. Despite technological innovation Intel has tended to be bypassed. The present period's super selling products - smartphones and tablet computers - don't require Intel's super high technology processors. Their attraction is individualization and ease of use.
Technology is fundamental for high value added production. China has outstanding centers capable of fusing production with technology. One of the reasons I enjoy teaching at Shanghai's Jiao Tong University is that it not only has one of China's best business schools but probably its best engineering department. That combination is indispensable in the drive into high value production.
But as the different fates of Intel, Samsung and Apple show, technology alone is not sufficient for success in high value added production. Brilliance in design, in making the product serve the individual human being, is equally crucial.
China's government has understood the need for huge investment in technology. High value added production must be matched by massive investment in design.
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