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The Microsoft lab is much more than a showcase for how far China has come in computer technology. It also illustrates how innovation is an increasingly global game. It can involve a worldwide research and development operation like that of Microsoft, or IBM, which has major labs in China, Israel, Switzerland, Japan, and India. Or innovation can be the product of a much more amorphous structure, something that consultants call global innovation networks. These often consist of in-house engineers, contract designers and manufactures, university scientists, and dozens of technology suppliers big and small — all pulled together for a particular product.
Such blending of technologies will become even more common as innovation networks extend their reach. Many corporations have been obsessed with improving quality in the 1980s, boosting productivity in the 1990s, and slashing costs in the wake of the 2000 tech bust. Now, companies are zeroing in on how to innovate more efficiently. “The fallacy of innovation was that it was all about spending on R&D or information technology,” says Diana Farrell, director of the McKinsey Global Institute. “Instead, it has more to do with execution and getting products out better and faster.” The answers are out there, waiting for the quickest and smartest to find them.