I generally think both attitudes are a too simplistic look.

Basically, the most common pattern with „commodity“ tech seems to be like this.

Western companies go ahead and expend a lot of R&D to establish a new market or validate a market need. Chinese companies go ahead and flood the market with slighly worse but significantly cheaper versions of said product (often forcing the „inventor“ company to take a significant margin hit, reducing new R&D budgets). Chinese companies them spend R&D on iterating on new features of the product (which they also can, because they saved a lot of R&D on the first product iteration).

„Western“ companies mostly created the situation for themselves. They basically consolidated all their manufacturing in China. China has also invested tremendous amounts into education and qualification. So China effectively turned from „the workbench of the world“ into a country where companies have extensive knowledge in product design, development, testing and manufacturing - as well as a mostly local supply chain.

Yeah, "Chinese companies just copies" was 10-15 years or beyond. No way is that relevant now.

I've been wondering about why this is. With no evidence, I wondered if one of the reasons is the long term result of the many design and engineering graduates (I notice an incredible amount in the industry I work in) who were educated in the "best western uni's" and have now returned home and grown up.

They were a honeypot for said uni's for so long. But the end result may now mean they're kicking all asses in product markets.

It can't just be cheap labour ... or maybe it's the combination.

  > I think some Chinese companies do take the idea and then they iterate on the product to the point that it outshines the original product

> American companies that innovate and Chinese companies just copies.

Let's take Roomba as the example, because "innovate" does not mean what people think it means.

Roomba invented the consumer robot floor care machine and won the market early on. Roomba's competitors innovated more (iteratively adding features) and Roomba has now lost it's independence.

See Blackberry, Motorola for some more recent examples. What the lesson is: there's only one way to go when you are #1 in your market category. You cannot allow gravity to work.

Pretty much every American company is just a bank with extra steps.

The big boys would rather own real estate and balance books than sink money into R&D. And acquiring companies is simply easier, and it's basically a broken strategy. If you just keep consolidating you just get a higher and higher valuation, while doing literally nothing.

> Sure there are initial product R&D cost overheads

I think this, plus different attitudes to intellectual property are the two big reasons western companies can’t compete.

The general strategy for R&D in the west is to spend significant sums developing a new technology, then building an IP moat around it to prevent direct competition. Our IP laws make this approach viable, and it allows companies to develop something new, then exploit it for decades without needing to innovate further.

China on the other hand does not have this approach to IP. Copying is rife, even between Chinese companies, and generally the idea of being given a state enforced monopoly just because you were first is laughable. As a result, when one Chinese company figures something out, that technology, process, technique, rapidly spreads around the entire market, and all of the competing companies benefit.

This creates few interesting side-effects.

* One a ginormous ecosystem of basic parts and components that are basically common between all competitors in a market (looks at the LiDAR units of robot vacs). This drastically lowers the barrier of entry for new players, it’s easy for them to get access to everything they need to build a “good enough” product, without having to do much R&D themselves.

* Two, it forces all companies to innovate and developer technology continuously. There is no state enforced monopoly for IP, so companies can only maintain an edge by innovating and advancing faster than their competitors at all time.

* Three, it’s makes a failure to constantly innovate an absolute death sentence for a company. Not just because they loose their edge, but because it takes time to rebuild the R&D skills needed to innovate as fast as their competitors. Once you start falling behind, you can never catch up, there is no space to financialise a company and sweat its assets. It’ll be dead before you got any return.

All this creates huge problems for companies like Roomba. They developed so very cool tech early on, but stopped innovating as fast, thinking they had a strong edge over any of their competitors, and solid IP moat. Unfortunately once Chinese companies caught up, and figured out how to get around their moat, its was impossible for Roomba defend against these new competitors. They were able to innovate orders of magnitude faster, because the environment that created meant only the fastest innovating companies could survive, they had huge momentum, and also a huge common core of shared components that had driven the cost of a basic robot vac to well under anything iRobot could achieve.