Indigenous innovation in China: Development and implementation of an innovative logistics concept

In the past two decades, China has earned the reputation of ‘manufacturing power house’ of the world. Chinese companies in their vast numbers have been very successful in exploiting their access to low-cost labour and have established themselves as unbeatable high volume low-cost manufacturing champions. However, recently growing number of Chinese companies are seeking to create a foundation for growth and development based on innovation. As a result of this, many of them spread their operations to the countries of the traditional industrial ‘triad’ of North America, Europe and Japan to capture a foothold in these markets and to tap into the advanced technologies and concepts originating from this developed context. Another category of Chinese companies includes those who seek to move from routine transactional tasks to more innovation-intensive concepts while remaining in China and relying on their own in-house resources. The development and implementation of indigenous innovation solutions for these companies is an imperative which has not been adequately addressed in the literature. Therefore, by employing an explorative case of a Chinese company behind an innovative logistics concept, this paper seeks to advance our understanding of indigenous innovation in China and to identify its major drivers and impediments.