November 28, 2010

The Buzz on Green Business in China

I visited Beijing a couple weeks ago to speak to a group of Chinese corporate executives. They were brought together by a major environmental NGO to discuss climate change. The meeting itself was fascinating, but I was really struck by a general impression in China that the country is taking green business very seriously.

I was interviewed by one of the major Chinese-language financial newspapers, which has a weekly section on clean technology. And each morning at my hotel I received the China Daily, the country's main English-language newspaper. Throughout the news and business coverage, the feeling that sustainability is crucial to the future of the country and its industries is palpable.

Out of 20 feature articles in the business section on November 15th, for example, five were all about the glories (and sometimes challenges) of green. Of course this is anecdotal evidence, but it demonstrates a level of conversation that the rest of the world should take note of.

Of these 5 articles, some were self-explanatory:

Two articles didn't scream sustainability until you read them:

This last article is the one that really grabbed my attention. The theme of the big event was "Technology-led Transition and Innovation-driven Development," which sounds broad. But the focus was squarely on "energy saving, environmental protection, and the low-carbon economy" with other emerging areas -- infotech, biotech, and modern materials -- taking a distinctly secondary role.

Each major government ministry in China was pitching green products and services at the tradeshow. The Ministry of Commerce was showing how some companies "have made use of technology to...promote a low-carbon economy and environmental protection." The Ministry of Industry and Information Technology's pavilion will demonstrate "industrial energy savings and the comprehensive use of resources." And on and on.

Clearly, China is making green a central pursuit of business, not a side issue. Contrast this with the approach in the U.S., where the equivalent to China's Hi-Tech Fair might be something like the Consumer Electronics Show. It's hard to imagine the focus of that Vegas extravaganza shifting from new entertainment devices and other energy-using toys to energy-sipping technologies.

In the U.S. business community, green is still a separate pursuit -- frankly, it's usually ghettoized within companies and industry events alike. Most green-themed gatherings are still relatively small and feature a recurring cast of characters. The one major exception, which does not disprove the rule, is the mega-event GreenBuild which, coincidentally, was happening at the same time, but in Chicago. Tens of thousands of people gathered to explore green building materials, designs, and strategies.

But imagine if the even-larger annual event held by the National Association of Home Builders (NAHB) was focused mainly on environmental issues (I actually spoke at NAHB two years ago as a green keynoter, but to a few hundred people in a side room, not the thousands that attend the main-stage events). That's what China's Hi-Tech Fair is doing.

I wrote a couple of months ago about China's leadership in the clean tech race, but at the macro level. It's another thing to see the green focus up close. However, the company execs and NGO leaders in Beijing tell me that sustainability is still a new pursuit for Chinese companies. It's really the government that's pushing the agenda with massive investments in clean tech. At the corporate level, they're looking to the U.S. and the West for best practices. But don't count them out for long; if there's one thing Chinese companies are good at, it's implementing a "fast follower" strategy.

Still, before I got too carried away with conclusions about the difference in approaches -- and it's nearly impossible not to trip up trying to generalize about China -- I wanted to see if the November 15th issue of the China Daily was an anomaly. Then the November 16th issue arrived at my door and the cover story was about alternative energy.

(This post first appeared at Harvard Business Online.)

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