Just Because Something's Fake Doesn't Mean It Can't Be Innovative

from the is-this-the-future-of-business? dept

The term "shanzhai" literally means a fortified mountain village, and originally meant those places in China that were outside government control, and hence not subject to its law. Today, by extension, it refers to Chinese outfits producing counterfeit goods that ignore intellectual monopolies like patents.

Here's a great 2009 post from the hacker Andrew "bunnie" Huang about the shanzhai world:

The contemporary shanzhai are rebellious, individualistic, underground, and self-empowered innovators. They are rebellious in the sense that the shanzhai are celebrated for their copycat products; they are the producers of the notorious knock-offs of the iPhone and so forth. They individualistic in the sense that they have a visceral dislike for the large companies; many of the shanzhai themselves used to be employees of large companies (both US and Asian) who departed because they were frustrated at the inefficiency of their former employers. They are underground in the sense that once a shanzhai "goes legit" and starts doing business through traditional retail channels, they are no longer considered to be in the fraternity of the shanzai. They are self-empowered in the sense that they are universally tiny operations, bootstrapped on minimal capital, and they run with the attitude of "if you can do it, then I can as well".

As Techdirt noted a couple of years ago, precisely because they are not bound by traditional legal constraints, shanzhai companies are often highly innovative. Here's a more recent example of a company going well beyond the product it is copying:

The designers behind this Shanzhai Nokia N9 smartphone have completely gotten around the problem of which operating system they should use and have opted to use 7 different UI’s!

Ok then this clone of Nokia’s top of the range smartphone doesn’t actually run Meego, iOS 5.0, HTC Sense, Symbian, Windows Phone 7, BlackBerry and even Smasung’s TouchWiz, but has been given optional skins to make the installed OS look like one of the popular mobile operating systems.

Obviously, that's not something traditional companies could try, but that's the point: the laws that are supposedly promoting innovation actually hamper it in significant ways. In his post, Huang wrote that shanzhai "may have something in common with Hewlett and Packard or Jobs and Wozniak back when they were working out of garages", and went on to suggest that the future of business for much of the world could lie in these modern kinds of fortified mountain villages:

I always had a theory that at some point, the amount of knowledge and the scale of the markets in the area would reach a critical mass where the Chinese would stop being simply workers or copiers, and would take control of their own destiny and become creators and ultimately innovation leaders. I think it has begun — these stories I’m hearing of the shanzhai and the mashup they produce are just the beginning of a hockey stick that has the potential to change the way business is done, perhaps not in the US, but certainly in that massive, untapped market often referred to as the "rest of the world".

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Filed Under: china, counterfeit goods, innovation, shanzhai