Market Demand, Consumer Characteristics, and Innovation in Chinese Firms

Abstract

Market demand is an important force to shape innovations, especially in a latecomer economy with a huge population like China. Drawing on the demand-side perspective on innovation (DSPI), this chapter investigates the market demand and consumer characteristics in China and their strategic impact on firms’ innovation activities and performance. This chapter stresses the importance of a demand-side approach for studying innovation in China and explores the characteristics of market demand and the interaction with innovation in the context of the past forty years of rapid economic growth and technological advancements. Managerial and policy implementation of market demand on innovation are also discussed.