Innovation in the Chinese technological companies

Flag of ChinaChina’s internet giants, including Alibaba Group, Baidu, Tencent and Weibo, are really huge companies but they are not good innovators as compared to their American counterparts as reported by Derrick Harris of Gigaom.

In December of last year, we wrote about the report published by IEEE spectrum. That report showed that not so many Chinese organizations or companies have 2011 U.S. patents, showing less innovation. This recent article also presents that the China’s big internet companies are “not yet technological innovators.”

Alibaba Group contains Taobao, the eBay-like e-commerce line of business, and Alipay, the company’s version of PayPal, and this group has a huge business. You can estimate the sales and revenue of the company from the sales of Nov. 11, 2011 that is about 19 billion Yuan (or approximately $3.05 billion). Alibaba Group CTO and Alibaba Cloud Computing President Wang Jian reported 1 trillion Yuan (about $160 billion) estimate for 2012 revenue at the end of November. On the other hand, Alipay has nearly 3 billion Yuan (about $480 million) in transactions per day. By comparison, eBay reported $3.4 billion in revenue for the entire Q3 while Amazon.com reported $13.8 billion in revenue for Q3.

Baidu is a Chinese search giant and is on fifth number in the world’s top sites ranking by Alexa that is the clear vision of the popularity of the company. Baidu is planning to develop the world’s largest data center in a 120,000 square meters, costing $1.6 billion, having 100,000 servers (totaling 700,000 CPUs and 3 million cores) and storing 4,000 petabytes of data.

Baidu

Weibo, Twitter-like platform from internet new-school internet company Sina, has more than 400 million users as of April 2012 that’s nearly twice the number of users on Twitter. It is thought to be more important microblogging service in China than Twitter in U.S.

According to Derrick Harris, Chinese internet companies are “not (yet) innovators” probably due to their thinking about their companies as conventional businesses rather than the technological companies and they like to work on the management level than to work as engineers.

However, this is the case with some of the Chinese companies but if we consider the area of scientific research, we can also find the reports of Nature Publishing Index 2011 showing that the authors from China increased from 5.3% of all the papers published in Nature in 2010 to 6.6% of all the papers published in 2011. On the other hand, U.S., no doubt, has strong influence of research but according to the index, the share of U.S. has decreased from 64.3% in 2001 to 50.7% in 2011 in the highly influential research market.

“By 2014, China could surpass Germany and the United Kingdom who currently hold second and third places,” said Felix Cheung, Editor of Nature China and the index.

These reports demonstrate that China has well-established growing economy with a good number of well established companies and a growing number of scientists with growing number of scientific researches showing that the country would start leading the major innovations of the world in the near future.