29 August 2012

Changing the Rules of the Game: The Commercial Aircraft Industry in China

Marc Szepan, Changing the Rules of the Game: The Commercial Aircraft Industry in China,” Harvard Asia Quarterly, 14.1/2 (Spring/Summer 2012): 112-22.

An absolute must-read from a true expert on the subject!

Article posted with kind permission of the Harvard Asia Quarterly.

The present article explores innovation and imitation in the context of the commercial aircraft industry in China as a critical case. The rise of Chinese firms has been one of the most fascinating stories in global business during the past decades. In 2012, Chinese firms have outnumbered Japanese firms in the Fortune Global 500 ranking for the first time. Many scholars have focused on technological innovation and upgrading, or the absence thereof, as the primary explanatory variables for this phenomenal development. This study complements this perspective by examining non-technological forms of innovation such as a firm’s business model. It argues that Chinese firms are innovators as much as imitators of business models and do not necessarily converge with global industry standards. Such business model innovation can occur at the “top of the pyramid” and has potentially disruptive implications for competition in global markets. …

Marc Szepan is a former aviation industry executive. He is currently a doctoral student at the University of Oxford Saïd Business School and a member of Green Templeton College. The views expressed in this article solely reflect his personal opinion and not the position of his previous employer.

For full text of one of the articles cited here, see Gabe Collins and Andrew Erickson, “A Chinese ‘Heart’ for Large Civilian and Military Aircraft: Strategic and commercial implications of China’s campaign to develop high-bypass turbofan jet engines,” China SignPost™ (洞察中国), No. 47 (19 September 2011).