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Sept. 15, 2015

U.S. companies leverage innovation better than China, says MSU study

Despite surging competition from China, U.S. companies still have the competitive edge in innovation, says a recent Michigan State University study.

In research appearing in the International Journal of Research in Marketing, MSU researchers found that when compared to Chinese firms, US companies are often better in converting knowledge of customers’ wants and needs into innovative products.

“These findings are encouraging for U.S. companies given the increased international competitiveness that China and its companies are showing globally,” said Tomas Hult, a professor of marketing and co-author of the article.

The research team conducted parallel studies among U.S. and Chinese companies to better understand the dynamics involving their customers and competitors. The goal was to focus on comparisons of how well these companies are market-oriented and how they develop market knowledge and competence to drive innovation.

A company being market-oriented – or how well it identifies and meets the wants and needs of its customer - is the first step toward reaching and satisfying customers. But success depends on the value that a company creates using its market knowledge competence – its ability to innovate.

“Customers will engage only if and when they see the company being innovative, not when a company says it will be innovative,” Hult said.

The research showed that leading U.S. companies are also better at using knowledge about competitors to be innovative in the global marketplace. Despite the innovation and market knowledge competence advantages enjoyed by U.S. companies, Chinese firms remain strong competitors for other reasons.

“While U.S. companies are innovative we still have to keep in mind that Chinese companies are very efficient in delivering global products,” said Roger Calantone, a professor of business and co-author of the article.

Professors Cornelia Droge, Erkan Ozkaya and Elif Ozkaya were also coauthors of the article.