INNOVATION has replaced imitation for at least 77 leading Chinese companies, according to research by economists from the Technische Universität München (TUM) and the Munich Innovation Group.
Even young Chinese companies are filing international patents on a massive scale, the research discovered.
Economists from TUM and the Munich Innovation Group who analysed the patent portfolios and internationalisation strategies of the 77 Chinese companies found that in the wake of telecommunications and IT companies, other industries are now heavily investing in their own intellectual property as well.
Telecommunications company Huawei’s European Research and Development headquarters is set up in Munich and seeks to employ engineers from Munich’s universities.
The automotive enterprise BYD has filed hundreds of intellectual property rights in Western countries. Chang’an is aggressively internationalizing its business in Russia, Brazil and African countries.
“For a long time, Chinese companies had a reputation for simply imitating their Western competitors. But the number of patent applications filed by them has increased heavily in recent years,” said TUM’s chair for Strategy and Organization, Philipp Sandner.
“China has a large number of up-and-coming companies that are pursuing an aggressive internationalization strategy – but some of these companies are still barely known in Europe or the US,” Dr Sandner said.
He said even young firms were protecting their intellectual property rights on a massive scale in Europe and the US – and yet they are barely known there. There were growing numbers of Chinese-owned patents in energy, chemicals and pharmaceuticals.
Researchers from TUM and analysts at Munich Innovation Group focused on 77 Chinese companies with high potential in innovation, internationalisation and growth. They concentrated on the key industries of automotive, chemicals and pharmaceuticals, electronics, IT and internet, engineering, solar, telecommunications, and oil and steel.
The economists analysed mainly the companies’ patent portfolios, enabling them to draw inferences about their general development and their internationalisation strategy. For example, by studying the geographical distribution of patent applications, the researchers could conclude which are the firms’ target markets.
One conclusion the research team arrived at is that the imitation strategy of Chinese companies is on a downturn, Dr Sandner said.
He said today, for most of them, self-developed intellectual property plays a dominant role in their businesses.
“Telecommunications companies like Huawei are pioneers,” Dr Standner said. “Many of them have now seen an end to the years with the ever-rising numbers of patent applications, their patent activities having stabilized at a high level. For other industries like energy, chemicals and pharmaceuticals the analyses indicate a strong rise in innovative activity.”
Even young companies are filing 40 percent of their patents overseas, he said.
Researchers found the majority of Chinese companies were still primarily operating in their domestic market, including some companies with very high growth rates. But the number of distributed patent applications in Europe and North America over the last years illustrates the growing importance of these markets.
According to the European Patent Office (EPO), Chinese organisations filed more than 18,000 applications for European patents in 2012. China represented 7.3 percent of all European patent applications in 2012, ranking fourth after the US (24.6%), Japan (20.1%) and Germany (13.3%).
Many relatively new Chinese companies were focused on internationalisation from the start. Non-Chinese patents account for a substantial portion – 20 to 40 percent – of their portfolios.
“It’s these companies that are underestimated in Western countries – because we have never heard of them,”Dr Sandner said. “A large number of firms that could soon be global market leaders are barely known at all.”
One element in the strategy of Chinese companies represents a particular challenge for European and North American economies, the report said – and by inference that holds for Australia: besides patents, Chinese firms are filing a relatively large number of applications for utility models compared to Western businesses.
Being in worldwide IP registers, these intellectual property rights can protect a product in manifold configurations. As such, Chinese firms are securing a great deal of scope for themselves for future product developments, whereas other companies could be seriously blocked in this regard.
The German economists, however, do think it unlikely that Chinese firms will be able to sustain the level of growth in their patent applications given the present economic development.
The report said it was unclear whether firms would hold on to their rights when they have to pay renewal fees year by year.
If firms invested their money to keep and defend their patent rights, it can be assumed the protected technology has an economic value, the researchers said.
The economists have now made profiles of the companies available online, arranged in the form of 77 corporate profiles and nine industry analyses:
Technische Universität München (TUM) is one of Europe’s leading research universities, with around 500 professors, 10,000 academic and non-academic staff, and 35,000 students. Its focus areas are the engineering sciences, natural sciences, life sciences and medicine, reinforced by schools of management and education. TUM outlines that it acts as an entrepreneurial university that promotes talents and creates value for society. In that, it profits from having strong partners in science and industry. It is represented worldwide with a campus in Singapore as well as offices in Beijing, Brussels, Cairo, Mumbai, and São Paulo. Nobel Prize winners and inventors such as Rudolf Diesel and Carl von Linde have done research at TUM. In 2006 and 2012 it won recognition as a German ‘Excellence University’. In international rankings, it regularly places among the best universities in Germany.
Australia’s greenhouse gas emissions are expected to slow during 2013, with measured emissions expected to grow by just 0.4 percent from 2012 levels because of reduced output from the metals sector – where Australia’s market is in serious decline – and an increase in renewable power generation.
That is the view of carbon analytics firm RepuTex, based in Melbourne. RepuTex research shows Australia’s emissions forecast to be more than 10 million tonnes, or 3% lower than projected under a ‘business as usual’ scenario without a carbon price.
RepuTex associate director of research, Bret Harper said the Federal Government’s Carbon Price Mechanism (CPM) will play a key role in reducing Australia’s carbon footprint. He said the research shows emissions growth in 2013 to be driven by the power, energy, and mining sectors – with power emissions forecast to grow 1.2%, but muted by increased renewable and gas capacity.
RepuTex forecasts greenhouse gas emissions across the Australian CPM using facility level modelling of more than 750 of the country’s largest carbon-emitting plants and sites.
The power sector will remain the largest source of carbon emissions in 2013 – accounting for 59% of all CPM emissions, followed by mining at 17%.
“One of the key issues facing the power sector is that rising gas prices will hamper gas generation’s ability to compete with coal,” Mr Harper said.
“We see coal maintaining its share of Australia’s generation mix through 2016, when government assistance to brown coal generators expires. From that point the floating carbon price is expected to provide good support to renewable generation, so we anticipate a real decline in power emissions from 2017-18.”
RepuTex forecasts black coal generation to grow by around 20% through 2020, whereas brown coal is forecast to decline nearly 17% over the same period.
Total coal generation is set to increase 8% by 2020, but with a resultant rise in emissions of only 4%, reflecting increased usage of less carbon-intensive black coal.
Emissions from petroleum refining and gas processing – both of which face significant regional competition – will decline in 2013, by 3% and almost 9% respectively as domestic output slows.
Emissions from the metals sector are forecast to drop 6% over 2013, driven by a downturn in Australia’s steel and aluminium industries, with steel emissions forecast to contract over 20% from 2012 levels, in line with reduced production.
“We’re seeing the combined impact of both carbon pricing and major sectoral changes within the Australian economy steadily shifting the country’s emissions profile,” Mr Harper said.
“The effect of forthcoming closures such as Kurri Kurri Aluminium and Caltex’s Kurnell refinery is set to be mitigated by the number of massive new projects within the oil and gas sector.”
The five largest such developments, Browse (Woodside, 2018), Wheatstone (Chevron, 2016), Gorgon (Chevron, 2015), Australia Pacific LNG (ConocoPhillips, 2016) and Icthys (INPEX, 2017), once online, will be the largest emitting facilities in Australia’s energy sector.
Between them, they are forecast to account for around 40% of the entire sector’s emissions by 2020, according to RepuTex.
A SURVEY by the Australian Retailers Association (ARA) has highlighted new concerns about the impact of the Federal Government’s carbon tax -- 80 percent of respondents said business had been negatively impacted since the July 2012 introduction.
About 60 percent of retailers surveyed said consumers had spent less since the carbon tax was introduced and 98 percent said they were not aware of government compensation programs.
ARA executive director Russell Zimmerman said he was not surprised by the findings of the energy efficiency in retail survey conducted in late 2012.
“It’s a concern that a vast majority of retailers were struggling on a business level due to carbon pricing and were not aware of government compensation programs in place to assist them,” Mr Zimmerman said.
“The introduction of carbon pricing was a massive legislative change for small business and one which has had a significant impact. In a climate of already suppressed retail spending, retailers are taking the hit of the carbon tax as consumers bypass the stores to pay household bills.
“It would appear that the government, although aware that big businesses would likely choose to pass the tax on to small businesses, the carbon tax was introduced without teaching businesses, particularly small businesses how to reduce their carbon footprint — which we understood is the ultimate aim of the tax.
“The cost of doing business has gone up for retailers due to higher utility bills and costs accumulated throughout the supply chain, which eventually fall onto retailers’ bottom lines and hit their customers’ already-sensitive hip pocket nerve.
“Many retailers reported significant increases in their bills, as well as a willingness to consider measures to reduce their carbon footprint such as more efficient lighting. The key challenge is in ensuring businesses are aware of any assistance they can access.
“The ARA is calling on government to provide the funding and information retailers need to cope with the adverse affects carbon pricing is having on their business.
“As the peak retail association for the $240billion retail industry, the ARA is listening to and liaising with government at all levels on behalf of its members in order to deliver much needed information and training to retailers,” Mr Zimmerman said.
SURVEY RESULTS ENERGY EFFICIENCY MEASURES IN RETAIL (Oct-Dec 2012)
The questions and responses to the survey are listed below:
Please indicate how the Carbon Tax has affected your business? Very negative impact- 23.3% Some negative impact- 54.9% No impact- 16.5% Some positive impact- 2.4% Very positive impact- 2.9%
Do you believe the Carbon Tax has affected consumer spending within your business? Yes, consumers have spent less- 60.7% Yes, consumers have spent more- 1.0% No, spending has remained the same- 23.8% Not sure- 14.6%
Are you aware of any government compensation for retailers? Yes- 1.9% No- 98.1%
If known, please indicate how much your energy costs have increased: Less than 5%: 10% 5 – 10%: 20% 11 – 20%: 30% 21 – 30%: 15% More than 30%: 11% Not sure: 14%
ARA also presented a collection of recurring comments from retailers who completed the survey:
What Government supplied programs has your business been able to access to reduce energy costs and consumption? - None that we are aware of. - Did not know that there was one. - None - didn't know there was any. - Haven't been informed of any so far.
Please indicate how the Carbon Tax has affected your business? - Increase in raw materials, all our merchandise is increasing. - Cost to operate and not quite sure the impact from suppliers at this stage. Too early to assess. - Very difficult to assess the pass-on costs other than in electricity and this is also caught up with network cost increases. - Increased cost of product. Increased expenses. - It has added a total cost of approx $4000 ex GST per year to the operation of the business. - Rising electricity costs. - Business electricity cost have gone up it may only be 10% but it is a cost all business cannot absorb so will be passed on eventually. - Consumer attitude. - Customers have been afraid to spend money. Fuel Prices keep going up, living in the country it is our main mode of travel. My power bill has more than doubled. - Higher delivery costs for stock and those that used to deliver for free now charge a freight fee - Freight and suppliers prices have gone up about 6%. - Power costs up 40% since July. - Supplier costs have gone up and input costs have also gone up.
ALMOST 1000 business bankruptcies occur every month in Australia, according to business consultant and author Donna Stone.
She believes almost 12,000 business bankrupcies a year is an excessive number of businesses going under, and she said a frightening aspect was the inctreasing ease with which bankruptcies were occurring.
The issue and its long term ramifications for Australia form a core section of Ms Stone's new book, Stepping Stones to Business Excellence.
"Bury your head in the sand long enough and before you know it, you are trading insolvent and on the road to bankruptcy," Ms Stone, who heads up Stone Consulting said.
"Bankruptcy can have so many ongoing affects. For some it can mean losing your home and most certainly your business, it can destroy relationships and often it is so stressful, some end up losing their health to heart attacks or suicide.
"Of course if affects the creditors as they are never likely to see a red cent either – forget the old fashioned '10 cents in the dollar' concept of return."
Ms Stone said she felt the only current winner seems to be the insolvency companies.
"I have seen so many cases of bankruptcy, it’s scary and often the business owner could have done something about it, had they just taken action sooner," Ms Stone said.
“The most common reason a business fails is due to the lack of business expertise of the owner – they don’t know what they don’t know and before long are making poor choices, not driving their business in the right direction and generally not focussing on the important things."
After the success of her first two books, Ms Stone is once again sharing her practical and insightful tips with business owners, with Stepping Stones to Business Excellence aimed at those who want to maximise results and profit.
In simple to read, concise tips, Ms Stone aims to help identify the important issues business owners face in this uncertain economic climate and points out how they can make their business lucrative again.
The book has a complete chapter on bankruptcy and how to avoid it.
When asked what her biggest tip would be to avoid bankruptcy, Ms Stone said, “Every business owner should be looking at their figures very regularly and as soon as you start to get into trouble, get help.
"Talk to your business consultant or accountant immediately and start taking steps to get things on track straight away.
"Telling yourself that next week will be better is sheer foolishness, unless you take some action to make next week better."
Donna Stone is the founder and CEO of Stone Consulting, which provides bookkeeping and consulting services to businesses in Australia. She has more than 30 years experience in the finance industry.
Through Money Gemstones and her other books, e-books, audios and consulting companies, Ms Stone has offered insights to thousands of individuals and associations to help grow their wealth and keep their good standing.
The book retails for $29.95 and is available from www.donna-stone.com.au
ONLY eight percent of ASX200 companies have 'truly embedded the principles of gender diversity within their organisations' according to Women on Boards. Those 16 companies were given a 'green light' in the Women on Boards Traffic Light Index launched in Sydney this week - but 31 companies shone 'red'.
Women on Boards chair and report author Ruth Medd said, "While ASX200 companies significantly improved their reporting on gender balance in 2013, better performance is still eluding many".
New to the Women on Boards green rating in 2013 are Aurizon, Caltex and Suncorp Metway joining the ASX, Commonwealth Bank, Commonwealth Property Office and CFS Retail Property Trust Group, MirvacGroup, NAB, Stockland, Telstra, Transurban Group, Westpac, Woolworths and Wotif.com as the companies leading gender diversity performance and reporting in Australia.
"Unfortunately 15.5 percent (31 companies) rated red meaning they show little or no compliance at all with basic gender diversity principles, while 29.5 percent (59) rated only slightly higher at 2.1, the bottom of the amber category," Ms Medd said.
"So there are 90 companies that could benefit from lifting their game around diversity initiatives.
"The remaining 110 companies - 16 green, 34 amber 2.3 and 60 amber 2.2 - have diversity policies and measurable targets, with the top of the list making real progress and having some very innovative and best practice programs."
It was clear from the research that companies with female directors had better gender balance practices throughout their organisations.
"Unsurprisingly there is a clear disparity in the gender balance practice in companies with female directors and those who have none," Ms Medd said. "Of the red rated companies, 77 percent have no female director while more than 80 percent of the green rated companies have at least two females on their boards."
And progress is slow, according to the Women on Boards research. Of the green rated companies making significant improvements, the number of females in their leadership ranks has increased by two percent from last year.
"We cannot keep ignoring the stark reality that in corporate Australia in 2013 women still receive lower pay, fewer board seats and fewer senior executive roles," Ms Medd said.
"Whether it stems from an unconscious bias, traditional work cultures or simple ignorance, companies cannot continue in this vein. This is why we 'encourage' the companies that are falling short in their gender diversity compliance and recognise those making real progress by publicly naming them alongside their ranking."
Some clear messages came out of the latest Women on Boards Traffic Light Index research.
"There are a number of key factors that need attention," said Claire Braund, Women on Boards executive director.
"Firstly companies need to understand where they are with effective and transparent gender data sets then set rigorous measurable objectives to improve and pay attention to deliverables like reducing the gender pay gap and appreciating flexible working."
Earlier this year, Women on Boards created the Guidelines for gender balance performance and reporting Australia, a practical and relevant framework to help organisations measure, report and improve performance in relation to gender balance.
Formed in 2001 and formally established as a company since 2006, Women on Boards has developed a network of 18,000 qualified and experienced women who aspire to board roles, linking them with current board vacancies and remaining connected with them throughout their career and director journey. Ms Medd said by opening up access to the pathways, the people and the positions, Women on Boards has assisted more than 1000 women to gain board positions, either as professional non-executive directors or by combining directorship with their career roles.
The full report from the Traffic Lights Index plus a best practices document is available for a fee from Women on Boards.
A full copy of the Guidelines and a comprehensive summary of the Traffic Light Index are available at http://www.womenonboards.org.au/
JUST WEEKS out from a Federal Election, a new book by Australian leadership and education experts claoms that Australia's political and business leaders are being severely undermined by a culture of dissatisfaction and complaint.
In The Australian Leadership Paradox, Geoff Aigner and Liz Skelton argue that the problem stems from a misunderstanding about what leadership really is, or should be.
"We blame those in power for not showing leadership yet habitually expect their protection and support," the authors have claimed.
"We're seduced by new leaders but quickly cut them down when they don't have a quick fix."
By working with hundreds of leaders of government, business and community organisations, Aigner and Skelton were able to identify the barriers to effective leadership.
Their book also provides insights into how Australia can develop leadership which is truly inspiring, sustainable and effective, "if we can be honest, gutsy and imaginative enough to do the work".
On August 13, Sydney Ideas will host a presentation by Geoff Aigner and Liz Skelton.
The presentation will be followed by a conversation and Q&A led by Professor Richard Hall who is responsible for the University of Sydney Business School's Leadership programs in Management Education.
"Traditionally, social leadership looked to business for guidance, now it's the other way around with many business leaders looking to the social sector," Prof. Hall said.
"Business leadership can no longer be just about delivering shareholder value; it's about delivering value for a broader range of stakeholders."
Prof. Hall said Australians often expect too much of individual leaders when they should be asking, "how can we all contribute to better leadership in our organisations, communities and sectors".
This Sydney Ideas event is co-presented with The Benevolent Society, Social Leadership Australia and the University of Sydney Business School.
Geoff Aigner is the director of Social Leadership Australia at The Benevolent Society.
Liz Skelton is principal consultant with Social Leadership Australia at The Benevolent Society.
What: The Australian Leadership Paradox
When: August 13, 6.00pm to 7.30pm
Where: Law School Foyer, Eastern Avenue, the University of Sydney
Trevor Watson: Office 02 9351 1918 or Mobile 0418 648 099.
Rachael Vincent Social Leadership Australia Office 02 8262 3589.