Picture this. A country freed from colonial and economic constraints that has a rapidly growing domestic and trade and aspires to rapidly be a core player in the developing world. Its growth upsets the legacy economic powers of the world. It is accused (quite rightly in cases) of stealing intellectual property and having no regard for existing rules of IP and patent law. It takes the view that some innovation is easier to steal than create within ones borders.
We all know the success of the United States economic development in the 19th century. What is less understood is that the United Kingdom in particular was constantly threatening the newly independent USA for stealing IP and not paying true regard to Patent law and foundations.
The US focused on changing from becoming a thief of IP to a country that became the crucible of innovation in the 20th century. By the beginning of the 20th century it dominated patent registration.
Who is the US of the 19th century. Clearly China. The parallels are quite acute. Following the Chinese entry to the global economy, it was rightly accused of having little regard for IP values. It copied everything from handbags and polo shirts to auto manufacturing processes and designs, largely giving no credit to the developers of the IP.
However just as the US dominated IP and patents from the 20th century, China is starting to do the same. In 2012, China created more patents than the US. Korean smartphone manufacturers are significantly challenged not by Apple but by the likes of ZTE, Lenovo and Huawei. Korean media reports that to their horror, they found at the 2013 CES (Consumer Electronics Show) that they had to catch the innovation of the Chinese.
Bottom line, history does repeat. If you look to China as a company that is just “copying” or a low value manufacturer or services provider think again. China will be increasing central to innovation, and with a domestic market of 1.3B consumers and 50M small businesses, there is a test market of a scale that is difficult to comprehend unless you are in it.