# Innovate or Die: What the UK and the Western Powers Can Learn from China Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2020-01-07 Category: BUSINESS Category URL: https://financedigest.com/category/business Meta Title: China's Innovation Surge: Securing Intellectual Meta Description: Discover how China's patent filing strategy is securing its competitive edge in the global market, and why the UK must up its game to stay ahead. URL: https://financedigest.com/innovate-or-die-what-the-uk-and-the-western-powers-can-learn-from-chinahtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/business-3-1736838975083-compressed.jpg) In the last five years, China has cemented itself as one of the world’s leading innovators. At least that is according to the World Intellectual Property Organisation (WIPO). In 2016 alone, China filed more patent applications than the United States, the European Union, the Republic of Korea and Japan all together. China’s approach to securing intellectual property shows the great national importance its leaders have in motivating its domestic [businesses to innovate](https://www.financedigest.com/disruption-and-innovation-four-predictions-for-the-business-landscape-in-2016.html "DISRUPTION AND INNOVATION – FOUR PREDICTIONS FOR THE BUSINESS LANDSCAPE IN 2016") and secure patents, and not just in the domestic Chinese market but emerging markets, too. This is a kind of [insurance move to prevent its businesses](https://www.financedigest.com/business-insurance-what-does-it-cover.html "Business Insurance: What does it cover?") from being squeezed out of their respective sectors in the years to come. The marketing strategist Michael E. Porter once said that businesses have to be “very schizophrenic”; that they “have to maintain continuity of strategy”, but they “also have to be good at continuously improving”. He was referring to the need to keep customer demand and interest high, and [protecting intellectual property is a very important part of any business strategy](https://www.financedigest.com/fx-hedging-strategies-to-protect-your-business.html "FX hedging strategies to protect your business"), particularly long-term. Continuous improvement is fundamental to maintaining [market shares](https://www.financedigest.com/countertop-spray-market-share-by-2028-upcoming-trends-and-analysis.html "Countertop Spray Market Share by 2028: Upcoming Trends and Analysis"). **[China is capitalising on the West’s intellectual property](https://www.financedigest.com/exclusive-china-regulator-launches-new-probe-into-banks-property-loan-exposure-sources.html "Exclusive-China regulator launches new probe into banks’ property loan exposure – sources") complacency** It is no secret that everybody likes to buy the best available product. If there are two [products for sale](https://www.financedigest.com/skin-lightening-products-remain-sought-after-among-women-who-continue-to-account-for-80-of-sales-study.html "Skin Lightening Products Remain Sought-after among Women, who Continue to Account for 80% of Sales: Study") and one of them is markedly better; if it has clear advantages and better functionality, then that product will win out every time. Working hard as a business to make the best available products helps to keep its intellectual property safe. But as soon as a country or a sector begins to slow down on its [innovation and research](https://www.financedigest.com/stretch-marks-treatment-market-insights-new-innovations-research-and-growth-factor-till-2025.html "Stretch Marks Treatment Market Insights, New Innovations, Research and Growth Factor till 2025"), then it is only a matter of time before domestic businesses begin to lose out to foreign competitors. Once an original patent expires, for example, a competing foreign [company could quickly move](https://www.financedigest.com/wait-and-see-u-s-companies-curb-investment-as-they-await-fed-moves.html "Wait and see: U.S. companies curb investment as they await Fed moves") in and get a patent granted on an improvement, locking the original patent owner out. That is exactly what China is doing, and has been for the better part of the last decade. The United Kingdom has a great history of innovation but it must work hard to keep its [competitive edge](https://www.financedigest.com/leveraging-ai-for-the-competitive-edge-in-insurance.html "Leveraging AI for the Competitive Edge in Insurance  ") both domestically and overseas. Things have gotten better over the last few years. For example, the UK actually increased its patent filings with the European Patent [Office](https://www.financedigest.com/verasitys-proof-of-view-passes-examination-by-chinese-patent-office.html "Verasity’s Proof of View Passes Examination by Chinese Patent Office") in 2017 and 2018, but the numbers and the increases are still very low. For comparison, over the 2008 – 2017 period, China’s patent filings rocketed from 6,486 to 50, 517 — an astonishing increase of almost 800 per cent. Over the same period, the UK’s patent filings increased from 7,172 to 7,530. **Bringing the competitive [edge back](https://www.financedigest.com/oil-prices-edge-down-recession-fears-back-in-focus.html "Oil prices edge down, recession fears back in focus") to the West** If the UK continues to stall in its patent filings, then it might find that it loses both its patent [landscape and its competitive](https://www.financedigest.com/plant-based-beverages-market-growth-opportunities-industry-analysis-size-share-geographic-segmentation-and-competitive-landscape-report-to-2028.html "Plant-based Beverages Market Growth Opportunities, Industry Analysis, Size, Share, Geographic Segmentation And Competitive Landscape Report To 2028") edge. The worrying result could be that UK businesses will lose [opportunities to cross-license intellectual property and will be starved of opportunities in the markets that they helped to create](https://www.financedigest.com/could-the-surging-build-to-rent-market-create-emerging-opportunities-for-investors.html "Could the surging build-to-rent market create emerging opportunities for investors?"). But there is still time to learn from China’s approach to prevent such a situation from happening. The most important thing to do would be to establish a national culture that requires support for innovation, along with maintaining and [growing market](https://www.financedigest.com/dental-implants-and-prosthetics-market-market-to-grow-at-robust-cagr-by-2028.html "Dental Implants and Prosthetics Market Market to Grow at Robust CAGR by 2028") share. This national approach is something the Chinese have been championing over the last decade. [Investment for intellectual property](https://www.financedigest.com/a-guide-to-luxury-property-investment-in-the-time-of-covid-19.html "A guide to luxury property investment in the time of COVID-19") is front-loaded, and pretty simple with its first-to-file system. The problem is that great ideas for patents are sometimes stalled by the initial fees that are required in order to secure intellectual property. In order to get around this, the UK [government needs to change its approach to its businesses](https://www.financedigest.com/where-do-small-businesses-turn-when-government-support-dries-up.html "Where do small businesses turn when government support dries up?"). Currently, the government provides [tax incentives based on profits — but businesses need](https://www.financedigest.com/what-you-need-to-know-about-tax-savings-for-businesses-in-las-vegas-nv.html "What You Need to Know About Tax Savings for Businesses in Las Vegas NV") financial support from the getgo — not later on when the money is already flowing. At the moment, things are the wrong way round if the UK is going to increase its intellectual property. China is actively encouraging its [businesses](https://www.financedigest.com/tripling-the-size-of-my-business-in-the-pandemic-the-mistakes-made-and-lessons-learned.html "Tripling the Size of my Business in the Pandemic — The Mistakes Made and Lessons Learned") — including even its start-ups — to file patents in other nations. The Chinese government dishes out grants to help fund the applications, and then a second bonus grant if the application is successful. The UK and other Western powers would be foolish not to follow this lead. After all, if a business genuinely looks like it is going to be successful, then upfront [funding in order to gain intellectual property](https://www.financedigest.com/some-uk-property-funds-defer-investor-withdrawals.html "Some UK property funds defer investor withdrawals") all over the world is surely a benefit to everybody involved. By playing China at their own game, the UK and the wider Western [world can use intellectual property](https://www.financedigest.com/how-to-get-started-in-the-world-of-property-management.html "How to Get Started in the World of Property Management") advantageously and competitively to maintain a home field advantage, and to establish a foothold in foreign markets. There are still [booming markets](https://www.financedigest.com/chromatography-accessories-and-consumables-market-booming-demand-leading-to-exponential-cagr-growth-by-2023.html "Chromatography Accessories and Consumables Market Booming Demand Leading to Exponential CAGR Growth by 2023") that are relatively cheap to invest in, for example India. The [lesson the West needs to learn](https://www.financedigest.com/aml-and-identity-checks-lessons-learned-from-the-natwest-case.html "AML and identity checks: Lessons learned from the NatWest case .") from the Chinese is to speculate in order to keep the advantage, and to think carefully about where to file a patent. There are plenty of [emerging markets that are ripe for intellectual property investment](https://www.financedigest.com/britain-launches-plan-to-boost-green-investments-in-emerging-markets.html "Britain launches plan to boost green investments in emerging markets"). We shouldn’t miss out on them. This article was written by Jessie Dean of [Oakmount Partners Ltd](https://www.oakmountpartners.com/), an investment consultancy firm based in Essex, UK. --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---