Updated: 2012-04-20 08:43
By Todd Balazovic (China Daily)
This is where industrial design SMEs are playing a crucial role by helping Chinese manufacturers realize how to create new, innovative products Chinese consumers want to buy.
By working with Chinese designers and companies, but utilizing Western design techniques developed over the US and EU's extended history as modern service economies, foreign industrial design SMEs are helping speed China along the path.
"Local designers and researchers are working with foreign design companies to gain a much deeper understanding of the Chinese consumer," Roux says.
Beyond just devising products for Chinese companies, Pratt of IDC says part of the reason they are keen on working in China is to help the industry mature.
"You are partly an educator, and trying to convince people of the value of integrated design and engineering," he says.
"There is the will and the ambition and the cash, but not the knowledge and experience. That's partly why we exist of course - to help companies achieve this."
Taking the time to educate Chinese designers on Western practices makes the transition from Europe to China - a one shot opportunity for most SMEs due to the deep financial costs of such a move - an already difficult situation more complex.
Though smaller industrial design companies face a higher level of risk when mobilizing in China, they are more capable of quickly adapting to the new environment.
"Size is not necessarily an advantage in this industry," Pratt says. "Smaller companies have the advantage of being more agile."
For Chinese and overseas companies alike, innovation in larger design companies is often difficult. With designers often on the lower rung of a long chain of command, ideas are often shot dead in the water before ever coming to fruition.
By having a flat power structure, industrial design SMEs are able to quickly and accurately work with all elements of a product design - from the branding to the engineering.
"We don't have the hierarchy of power, so we can more easily work to directly meet our clients needs," Pratt says.
But in order to meet a client's needs, a company first must get clients.
One of the biggest divides between local firms and foreign ones is the price of services.
Though the Chinese capital alone may have almost 10 times the number of industrial designers than the US and the UK, Western design firms are charging almost 10 times the price of their Chinese counterparts, says Roux of IDSA.
In a 2011 survey by the Economist Intelligence Unit, commissioned by UK Trade & Investment, 53 percent of Chinese companies said they would prefer to put their money toward increasing cost efficiency rather than spur innovation.
One-third of the Chinese companies surveyed said they would rather produce cheaper versions of already existing products rather than create unique ones.