Architectural Innovation in China

One of the main ambitions of the Varieties of Capitalism (VoC) is to draw attention to differences of national innovation patterns and to link those differences to variations in the institutional environments of firms in the respective countries. The original version focuses on two groups of advanced economies with distinct institutional configurations that appear to excel in either incremental or radical innovation. In turn, it is suggested that all the countries that cannot be assigned to one or the other of the two types of institutional configurations are less successful altogether (e.g. Hall and Gingerich 2009) or, expressed more cautiously, less successful in performing either of the mentioned major innovation strategies. More recently, however, a growing number of researchers have turned to Henderson and Clark’s (1991) quadripartite distinction of innovation strategies in order to determine the specificities of China’s national innovation pattern. According to the recent view, China’s economic performance, including its current competitive success in several sectors, fundamentally rests on architectural innovation. Yet, the sources of the alleged comparative advantage still needs to be fully worked out. The prospective paper provides an encompassing review of the literature on architectural innovation in China. It starts with a discussion of the assumption made by the VoC that different industries were characterized by specific forms and patterns of innovation. Based on such a product-technology perspective, the review particularly highlights the China literature’s assigning significance to (quasi-) open product systems and modularity for the definition of sectors as being characterized by architectural innovation. In order to exemplify the point, the development trajectories of several relevant industry sectors are summarized and compared. Then, the analysis focuses on the literature’s findings with regard to the organizational forms and processes underlying architectural innovation. It will be argued that these kinds of analyses are rather scarce and fragmentary leaving many questions pertaining to collaborative and competitive relations as well as the organization of work unresolved. The subsequent chapter addresses the institutional resources that are accessed and combined by entrepreneurs, or entrepreneurial firms, in order to engage in the particular organizing of architectural innovation. Finally, the main points of the analysis are evaluated in relation to the original VoC approach and a further pertinent framework, Sanchez and Collins’ (2001) technologically deterministic “products design organizations” approach.