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Archives of Peking University News - PKU English - 北京大学

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<strong>北京大学</strong>英语新闻网/<strong>Peking</strong> <strong>University</strong> <strong>News</strong><br />

Beijing Forum 2007: Innovation Is the<br />

Only Way to Highly Added Value for<br />

Enterprises -- An Interview with Ni<br />

Guangnan, Member <strong>of</strong> Chinese<br />

Academy <strong>of</strong> Engineering (CAE)<br />

<strong>PKU</strong> NEWS 2007—10<br />

http://ennews.pku.edu.cn/news.php?s=193378486<br />

Only Innovation Can Place Enterprises at the Top <strong>of</strong> ―Smile Curve‖ Value Chain<br />

Science Times: Enterprises have been the principal part in development <strong>of</strong> China‘s<br />

modern social economy. Enterprises in contemporary China has been developing<br />

extremely fast. After 30 years <strong>of</strong> starting up, a large number <strong>of</strong> middle and<br />

small-sized enterprises have entered the phase <strong>of</strong> scientific and sustainable<br />

development driven by technical advances and management innovation. In your<br />

opinion, what is the significance <strong>of</strong> technical innovation for the development <strong>of</strong><br />

enterprises?<br />

Ni Guangnan: In the 1980s, Mr. Shi Zhenrong brought out the famous concept <strong>of</strong><br />

―Smile Curve‖ to describe the distribution <strong>of</strong> added value in personal computer<br />

industry. According to the ―smile curve‖, added value <strong>of</strong> computer industry mainly<br />

comes from two parts: one is related to innovation (including standard), the other is<br />

related to brands and sales channel. Processing and assembling have the lowest<br />

added value.<br />

Recently, Dr. Rui Xianglin, head <strong>of</strong> SAP China Research Center, brought forth the<br />

―Smile Curve‖ in s<strong>of</strong>tware industry. Similarly, he separated the integrated value chain<br />

in s<strong>of</strong>tware industry into several closely connected key parts such as innovation,<br />

definition and standardization, promotion and marketing. Among them, highest<br />

added value is found in innovation, definition and standardization, as well as in the<br />

final promotion and marketing part, while s<strong>of</strong>tware development, such as coding and<br />

testing done by some Indian s<strong>of</strong>tware companies is with minimum added value in<br />

―Smile Curve‖.<br />

479

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