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Letter from the Editor

Published online by Cambridge University Press:  14 May 2021

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Abstract

Type
Letter from the Editor
Copyright
Copyright © The Author(s), 2021. Published by Cambridge University Press on behalf of The International Association for Chinese Management Research

This issue features a Special Issue on Business Model Innovation in the context of emerging economies. When Professors Oli R. Mihalache and Henk W. Volberda first proposed this special issue, I did not have a clear idea of the saliency of this topic for emerging economies. However, my extensive stays in China over the past six years have introduced me to a few examples of business model innovation starting from FOTILE Kitchen Ware Co. in Ningbo, founded in 1996 by Mr. Mao Zhongqun, shortly after he graduated in 1993 from Shanghai Jiaotong University with an MA in Electrical Engineering. The company specializes in electric and gas appliances with innovative integrated solutions for every family kitchen. Mr. Mao adopted the Confucius philosophy of Zhongyong because ‘Confucius ideologies are in the blood of the Chinese people. All we need to do is to arouse them and help people aware of their existence’ (FOTILE).

FOTILE is not an isolated example. I have been fortunate to study open innovation at Haier (Lewin, Välikangas, & Chen, Reference Lewin, Välikangas and Chen2017) and Huawei (Wu, Murmann, Huang, & Guo, Reference Wu, Murmann, Huang and Guo2020). The Forbes 2020 list of the richest Chinese individuals identifies 399 individuals with a net worth of over $1.55 billion over a wide range of sectors, many of which are examples of business model innovation (e.g., Colin Zheng Huang [Pin Duo Duo]; Zhang Yiming [ByteDance and TikTok]; Lei Jun [Xiaomi]; Li Shufu [Geely with Volvo acquisition]; Wang Chuanfu [BYD automobile]; and Wang Tao [DJI drone]). Under the editorship of Professor Xiao-Ping Chen (the next Editor-in-Chief of Management and Organization Review), the IACMR publishes Management Insights (新一代的商业管理读本), which has published stories and interviews about companies that have pioneered new business models.

The purpose of research on business models is to describe the management philosophy, strategies, and organization design of how a specific business innovates a new business model that disrupts competitors or leapfrogs current incumbents on the core dimensions of value creation and value capture. However, as the guest editors note, academic research on business model innovations in the context of transforming economies is still in its infancy. Out of 468 papers about business model innovation identified by the guest editors, only 43 articles, published in the Management and Business categories on the Web of Science, were in the context of emerging economies. Clearly this is an under-explored domain in management scholarship. One indication of the urgent need for research on new business models in the context of emerging economies is the extent of full paper downloads during the 2 to 3 months after the papers in the special issue were accessible online on FirstView. Collectively, those papers and the guest editors’ introduction recorded 3695 downloads so far.

I wish to express my deep appreciation and thanks to the guest editors and to the authors for their perseverance through an arduous and demanding review process, which I hope will attract follow-up papers on new business models in the context of China and other emerging economies.

This issue also introduces the second installment of the MOR Forum on ‘De-globalization and Decoupling’. The Forum continues to attract new commentaries, which are multiplying and intensifying the dialogue encompassing de-globalization and the emerging geopolitical tensions between the US (and its allies) and China (and its allies). This tension has serendipitously created an opportunity for India to leapfrog China, due to the escalating cooperation between India and the US, and reinforces the geopolitical status of the Quadrilateral Security Dialogue between the US, Japan, Australia, and India. The third installment of the forum on de-globalization and decoupling is soliciting commentaries on the emergence of Africa as the next arena of competition between advanced liberal economies and China. MOR is also accepting papers and proposals for the Research Frontiers Conference on China OFDI in Africa (https://www.cambridge.org/core/journals/management-and-organization-review/information/open-calls/cfp-china-ofdi-to-africa). Africa's population is projected to reach 2.5 billion by 2050. As China is planning for a rapidly aging population (median age at 37.4), Africa has the potential to benefit from its growing young population due to high fertility rates and declining mortality rates (e.g., Nigeria's median age at 18.4), and has the potential to become one of the future factories of the world. However, although the EU and US account for the largest share of FDI capital to Africa, and China has accelerated its FDI in Africa, this region's share of inward FDI per capita remains the lowest in the world. China is not yet the largest investor in terms of FDI flows in Africa, but it dominates in debt financing for many high-impact infrastructure projects such as railways, highways, energy, and mining.

Although the recent conversations have attracted a growing number of reports (e.g., Hinrich Foundation), international scholarship, represented by qualitative and empirical studies published in top IB journals or papers presented in academic conferences, is surprisingly quite sparse in this area. In summary, I believe that IB and strategy research in the context of de-globalization and decoupling due to the growing geopolitical tensions between the US and China will attract growing and accumulative academic and informative scholarship in this space. I am thrilled that MOR is taking the lead.

References

REFERENCES

Lewin, A. Y., Välikangas, L., & Chen, J. 2017. Enabling open innovation: Lessons from Haier. International Journal of Innovation Studies, 1(1): 519.CrossRefGoogle Scholar
Wu, X., Murmann, J. P., Huang, C., & Guo, B. 2020. The management transformation of Huawei: From humble beginnings to global leadership. Cambridge: Cambridge University Press.CrossRefGoogle Scholar