Contextualising digital innovation in today's China: Local practices and global contributions

Abstract

In 2008, Information Systems Journal published a special issue on Information Systems (IS) in China (Davison et al., 2008), which greatly encouraged IS scholars to conduct high-quality research in and about China. Between 2008 and now, China continued to prosper in the global economy. One distinctive force driving China's economic growth and transformation has been the ongoing innovative design and use of digital technologies in advancing manufacturing production, generating new business models, and addressing societal challenges. As noted in aMcKinsey Global Institute (2015) report, China has evolved from an innovation 'sponge' that absorbs and adapts existing technologies and knowledge from developed countries to a global innovation leader in developing and experimenting with a variety of new digital services. This has been evident in its dominant market share and size of e-Commerce and mobile payment worldwide in the past few years (Abkowitz, 2018;Aldama, 2017).In discussing digital innovations in today's China, practitioners and scholars need to first understand the shaping role of the unique Chinese context. The Chinese digital innovation path is heavily embedded in its economic and social setting. Namely, it is the world's second largest economy, having fast-developing manufacturing and technological infrastructure (McKinsey Global Institute, 2015), and a unique societal and regulatory environment (Bu et al., 2021). The economic prosperity creates a large and dynamic consumer market. In particular, the rise of the middle class characterised by their familiarity with technologies, ever-changing product preference, and purchasing behaviours, and high expectation in consumption experience plays a decisive role in fuelling the country's digital economy. The fast-growing digital products, services, and businesses are fundamentally driven by solving this new generation of consumers' pain points and meeting their needs. Furthermore, the large market size allows many new Chinese digital ventures targeting at even niche markets to rapidly scale their user bases and achieve financial sustainability (Huang et al., 2017).Besides the large number of affluent and Internet-savvy consumers, another contributing factor comes from major changes in the supply side of digital products. Over the past decade, 'a deep network of suppliers, a large skilled labor force, and a well-developed logistics infrastructure' (McKinsey Global Institute, 2015, p. 62) has laid an important foundation to support the digitization of products and services across different industry sectors. Several comprehensive manufacturing ecosystems co-locating in close proximity have emerged and thrived in the country, exemplified by the well-known digital ecosystems in Shenzhen and Suzhou. These places offer easy access to talents, knowledge, and business networks, thus fostering the growth of innovation-based Chinese and foreign technological ventures (Ambler, 2017). The co-creation and complementary solution through the ecosystem leads to a virtuous cycle...

Digital Innovation and Firm Environmental Performance: The Mediating Role of Supply Chain Management Capabilities

“…In fact, China was the only middle-income economy among the world’s top 30 most innovative economies. It has been argued that the ongoing innovative design and use of digital technologies in transforming and advancing China’s manufacturing capabilities and developing new business models has been one of the important forces driving its innovation and economic growth ( Li et al, 2022 ). A recent survey report released by global consultancy Accenture shows that many Chinese firms are accelerating their digital transformation to develop sustainable competitive advantages and achieve sustainable growth through the innovative use of new digital technologies such as cloud computing and big data.…”