Institute For The Future

Shanzhai: An Open Platform for Innovation at SXSW

Did you ever stop to wonder how the whole world has been flooded with cheap Chinese knock-offs? From fake designer purses and Rolexes to counterfeit subway passes and—on a darker note—fake drugs, batteries, and even "trojan horse" microchips in American weapons systems, how do Chinese bootleggers manage to quickly produce and distribute so many things that so many people want, without any formal organization? Meet the shanzhai—the bandit manufacturers who are disrupting global markets and serving up affordable goods to hundreds of millions of people.

We first started researching the shanzhai as part of our 2011 Open Fabrication project, in which we explored the future of 3D printing and design. The result was an extended conversation with some of the pioneers of Chinese DIY manufacturing: Bunnie Huang, David Li, Jon Philips, and Eric Pan, which was collected in a set of research notes on shanzhai as an innovation space of the future. In a 2012 Technology Horizons project on Chinese creativity, we identified shanzhai manufacturing as a potential enabler for entrepreneurs and designers around the world.

This year at South by Southwest, we're thrilled to continue the shanzhai conversation when IFTF research director Lyn Jeffery shares the stage with Kris Gale, VP of Engineering at Yammer, in a talk titled Imitation as Innovation: Lessons from the Shanzhai. Lyn will describe the "shanzhai rules" that allow them to operate the way they do, and Kris will explore what shanzhai systems mean for US organizations and innovation:

The problem with U.S. innovation? Our broken business models. American companies were built to be predictable, not adaptable. Trends like mobile, social and the cloud are major disruptive forces and businesses are struggling to keep up. Instead of fearing the Shanzhai, we can look at their 4 core tenets to reorganize the way we do business.

Click here to listen to the podcast.