China is not always synonymous with the concept of innovation. The country is instead more commonly seen as one that piggybacks on the ideas of others, using its vast labour force to mass produce the same goods more cheaply.
However, a report published on Wednesday by the McKinsey Global Institute claims innovation will need to account for as much as half of China’s economic growth if Beijing is to hit consensus growth forecasts of 5.5 to 6.5 per cent a year in the coming decade.
“If we don’t see innovation on the scale that we are advocating, we would call the growth forecasts into question,” says Jonathan Woetzel, a Shanghai-based director of the institute. “[If we do], the resulting ‘China effect’ on innovation has the potential to disrupt markets and industries and could reshape global competition.”