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Given the popular belief that China's comparative advantage is its low labour cost, The Source of Innovation in China argues that the fundamental source for Chinese economic growth is its innovation. Based on qualitative case studies and quantitative surveys of 600 firms, this research describes the competitive advantages of successful Chinese enterprises and builds a theoretical framework for innovative firms and empirically tests the resulting hypothesis. The authors explore the general features of Chinese enterprise and innovation, hypothesizing that the rapid economic development in China is based on innovation. This innovation is not only about technological innovation, but also process and strategy innovation. Cases are drawn from technological innovative firms and from traditional labour-intensive industries. Moreover, the underlying source of Chinese innovation is centred on its people, and the authors discuss this by looking at the philosophical, linguistic and culture influences. They take a broad stakeholder perspective and employ social network theory to explain that, by extension, innovative people surround the organization and create organizational values. At the organizational level, they propose a theoretical framework of a High-Innovative Human System, by integrating both Western and Chinese management systems.
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