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INCH Strategy (China’s ICON edge to produce iconic products):
China’s four-letter edge, ICON (Individually poor, Collectively rich, Obsession with manufacturing and No.1 in graduating engineering students) is the reason China has started to produce iconic products. After 30 years of reform, China still remains a poor country on per capita basis, but collectively, it has become very rich (by 2015, China’s newly-built high-speed rail networks will be 2x of the rest of the world combined). The big market potential gives China great leverage to ask foreign companies to transfer technology, and it has bigger capacity to invest in R&D. Indeed, there is a big industrial base to support production and technology absorption. Currently, manufacturing accounts for a third of China’s GDP—a higher proportion in comparison to any major economy. At the same time, there is a big talent pool for China to tap into. Currently, the number of college students is 46% higher in China than in the US. More importantly, more than one-third of college students in China are engineering students, versus 7% in the US.
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