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This study examines innovation quality differences in the software industry between Chinese and American companies, highlighting strategic choices and global market presence.
This study, based on case studies and market data from the software industry in China and the United States, empirically examines the impact of corporate strategic focus and global layout on innovation quality. The findings indicate that Chinese software companies have an average of 3.2 times more product lines than their American counterparts, yet they invest only one-fifth as much in a single product compared to their American counterparts. This results in a patent density per ten thousand people that is less than one-third of that in the United States. The dual pressures of management inefficiency and a lack of global market presence lead to Chinese companies having a BUG repair cycle 2.7 days longer than their American counterparts, with a global market revenue share of less than 5%. Institutional path dependence has led 73% of Chinese tech companies to fall into the 'big and comprehensive' trap, with only 28% of their effective R&D time dedicated to core technology breakthroughs. The study suggests that the fundamental difference in innovation efficiency is a result of strategic choices rather than simply the amount of time invested. China needs to focus on niche markets and global layout to overcome innovation bottlenecks.
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William Liang Xie (2025) studied this question.
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