Designed in China

- a Threat to Danish Design and Innovation?

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INTERVIEW China is no longer merely a sub-contractor. Design and innovation are at the top of the big companies’ agenda, and China is progressing in such leaps and bounds that it now threatens Danish companies’ position in the field of developing and designing new products and services. This warning call comes from the directors of two Danish design firms that have had branches in the Far East for the past ten years. Still, they also point to the factors that might secure the future position of Danish product development and design.

By Trine Vu

Each day, an endless stream of products labelled Made in China pours into the world market from one of the fastest growing economies on the planet. But the familiar label Made in China is poised to become Designed in China, for the 10,000 designers who graduate in China each year are getting ever stronger.

Wake up call

Nils Toft, director of the Danish design firm CBD, which ten years ago was one of the first to establish in Asia, has no doubt that Danish designers have to take the eastern threat seriously.
“It’s not realistic to think that the Chinese will continue to serve only as sub-contractors. In the past in China, someone could make it big if they were able to turn out vast amounts of inexpensive doodahs. But the large manufacturing firms have reached a point where they are beginning to cannibalise each other, and they know that the future relies on innovation and design,” says Nils Toft and adds:
“In the West, we tend to rest on our laurels to some extent, because we’ve been doing so well for so many years. But we’re not exactly doing ‘so well’ anymore. The financial crisis has to be the wake-up call that shakes us out of our complacency, for we can no longer afford to ignore the facts: We’re going to encounter competition. The lead position of Danish product development is living on borrowed time.”

The threat from the Far East. Nils Toft, director of the design firm CBD, thinks it is unrealistic to expect Chinese companies to continue to serve only as sub-contractors. The lead position of Danish product development is living on borrowed time, he says. Photo: Private photo

Next Step: Chinese Brands

Director Frederick Rickmann of the design firm DN Group, which counsels companies about the development and design of products, services and strategy, and which has long had a division in Taiwan, is also witnessing the shift in the Far East. He believes it is only a matter of a few years before the Chinese begin to develop their own brands:
“There are different levels, but right now the entire country is moving from manufacturing to order toward a middle course where they are in charge of development but don’t yet have their own brands. The next step will be for them to manufacture their own brands, as there are a lot of really skilled engineers in China. Taiwan has taken the lead, and virtually all notebook computers are developed, designed and manufactured here. But they are delivering their entire production for major Western brands like Philips and Hewlett Packard,” says Frederick Rickmann.

Danish Designers Still Have an Edge

Still, certain barriers continue to give Danish designers an edge in relation to their Asian colleagues.
Nils Toft says that in the Danish culture the right to question existing solutions and allowing the individual to assess whether something is right or wrong is taken for granted, and that this is a perfect inventor’s mindset. The Chinese culture, by contrast, is deeply anchored in the respect for the ancient masters.
“No one questions existing solutions or orders received from one’s superiors. On the contrary, a failure to acknowledge the hierarchy would mean a loss of face. That mindset is ideal when manufacturing knock-offs or me-too products, and Chinese companies have grown large exactly because of this hierarchical structure. But when it comes to innovation, that mindset poses a huge barrier. To be innovative, one has to be able to ask questions and take on a more devil-may-care, I’ll-show-them attitude,” he says.

Chinese Mindset Poses an Obstacle

Thus, before Chinese companies can become really competitive on innovation, according to Nils Toft they will have to establish a new structure that allows people to question the current state of affairs. But he is certain that they will get there, as they are curios, hard-working and quick to learn. And development is moving at a rapid pace:
“When we set up in China ten years ago, all the young people were wearing pale blue shirts and black, freshly polished shoes. Today, they have long hair and baggy pants. The young generation consists of modern urbanites who want the same as we do. They’re not rooted in the peasant culture that characterises those in power in China today,” says Nils Toft.

Chinese product development. Director of DN Group Frederick Rickmann says that Chinese companies are currently moving away from manufacturing to order and toward product development, although they have not yet begun to launch their own brands. Photo: DN Group Taiwan

Frederick Rickmann still sees the prevailing mindset as the greatest handicap for the Chinese in relation to design and innovation.
“They have huge design departments that are completely useless because the Chinese don’t have an innovative spirit. Sometimes, if we present them with a design drawing of something they’re not used to seeing, they may show a complete lack of comprehension. They’re taught to rely on authorities, not to be independent thinkers,” says Frederick Rickmann and explains that this applies to the entire school system – including design schools and universities.
“Students are trained to look for market references but only with a view to positioning new products in relation to the existing market. In Europe we take the opposite approach where we are constantly looking for possible quantum leaps and differentiation,” says Frederick Rickmann.
In his assessment, this is because Chinese culture is still permeated by a view that considers it a mark of quality to be able to recreate the qualities of the past as precisely as possible.

Quick-Fix Mindset

The Chinese mindset is held back by another barrier that they will need to eliminate before they can pose a threat to Danish innovation, says Nils Toft.
“The Chinese mentality is permeated by a quick-fix mindset. The Chinese are convinced that there must be a quick fix to everything. They expect us to fly in and teach them how to do innovation, and they don’t believe us when we tell them we can’t, because there’s no shortcut. It’s a long process to learn to do innovation. But it’s only a matter of time before they’ll get there,” says Nils Toft.

China as the Consumer Market of the Future

The biggest advantage for the Chinese as the two design directors see it is a huge domestic market that is capable of absorbing vast amounts of products. Nils Toft points out that the market is one of the most important drivers of innovation, and therefore he believes that we in Denmark need a different perception, so that we stop seeing China simply as a cheap manufacturing site and acknowledge it also as the consumer market of the future.
“Our perception almost resembles old-school imperialism, where the Western culture calls the shots. A while back, when the tiger economies in the Far East took off, we thought that was good for us, since we could now have our stuff produced at a low cost. But now that the Chinese are suddenly beginning to move into design and innovation, we’re caught by surprise, since we didn’t tell them they could do that,” says Nils Toft.

Now is the Time to Turn Things Around

He does not think that there is any way that the West can stop the Chinese progress in the marketplace. But there is something else we can do.
“We can’t just stand idly by while the Chinese are taking over the market. We need to dare move into their market to find out how to gain access to Chinese consumers, to get at least a slice of that big pie before it’s too late. Now is the time to turn things around to our advantage,” says Nils Toft.

Frederick Rickmann also sees a promising future. He notes that the higher the new design-producing countries move up the food chain, the more they need the expertise that Danish designers have to offer.
“The more advanced economies on the Asia-Pacific rim – Japan, South Korea, Taiwan and Singapore – can no longer compete on labour costs with China, Indonesia and Vietnam. Therefore, they need to add more and more market value to their products and have to rely on the same value-creating tools as, for example, Denmark: a better understanding of the users, better interfaces, and better design. That means that these countries are already importing more from Denmark – in the form of know-how – than they are exporting to us, even though we import, for example, a lot of Japanese cars and notebook computers from Taiwan. If we can achieve a similar balance with China, Denmark and Danish designers have a tremendous future ahead of them, but we need to put in a more deliberate effort,” says Frederick Rickmann.

Illustration top: The Chinese characters for Designed in China. Translated into Chinese by Professor Jørgen Delman, Ph.D., China Studies, Department of Cross-Cultural and Regional Studies, University of Copenhagen.