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Platforms, Innovation and Capability Development in the Chinese Domestic Market

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Abstract

We compare the evolution of the mobile phone and electric two-wheeler sectors in China. In the first decade of the twenty-first century, Chinese firms have used technologies bundled into platforms to meet the needs of low-income Chinese consumers. The possibilities of downstream innovation opened up by platforms were not pursued. This paper shows how changes in Chinese consumer demand led to pressures for greater product differentiation and innovation, and how businesses responded to this through investing in research and development, developing their value chain linkages and mobilising local and national innovation resources. We highlight sectoral differences, particularly with respect to the speed of technological change in the mobile phone industry and its consequences for value chain linkages and inter-firm learning.

Cet article compare l'évolution des secteurs de la téléphonie mobile et du deux-roues électriques (E2W) en Chine. Durant la première décennie du XXIe siècle, les entreprises chinoises utilisent des technologies intégrées dans des plates-formes pour répondre aux besoins des consommateurs chinois à faible revenu. Les possibilités d'innovation en aval, ouvertes par les plates-formes, n'ont pas été poursuivies. L’article montre comment les changements dans la demande des consommateurs chinois ont poussé à une plus grande différenciation et innovation des produits et comment les entreprises ont réagi à cela en investissant dans la recherche et le développement, en développant leurs liens dans la chaîne de valeur et en mobilisant des ressources locales et nationales. L’article met en évidence les différences sectorielles, en particulier en ce qui concerne la vitesse de l'évolution technologique dans l'industrie de la téléphonie mobile et ses conséquences sur les liens dans la chaîne de valeur et sur l'apprentissage interentreprises.

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Authors and Affiliations

  1. School of Business Management and Economics, University of Sussex, Brighton and Hove, BN1 9RH, UK

    John Humphrey

  2. Institute of Developing Economies (IDE), Japan External Trade Organization (JETRO), 3-2-2 Wakaba, Mihama-ku, Chiba, 261-8545, Japan

    Ke Ding, Mai Fujita & Koichiro Kimura

  3. Graduate School of Economics and Management, Tohoku University, Kawauchi Aoba-ku, Sendai, Miyagi, 981-8522, Japan

    Shiro Hioki

Authors
  1. John Humphrey
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  2. Ke Ding
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  3. Mai Fujita
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  4. Shiro Hioki
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  5. Koichiro Kimura
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Correspondence to John Humphrey.

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Humphrey, J., Ding, K., Fujita, M. et al. Platforms, Innovation and Capability Development in the Chinese Domestic Market. Eur J Dev Res 30, 408–423 (2018). https://doi.org/10.1057/s41287-018-0145-4

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