Bunnie Huang on China's "Shanzai" Mash-Up Design Shops

saccade.com writes "Bunnie (of XBox hacking and Chumby fame) has written an insightful post about how a new phenomena emerging out of China called 'Shanzai' has impacted the electronics business there. A new class of innovators, they're going beyond merely copying western designs to producing electronic "mash-ups" to create new products. Bootstrapped on small amounts of capital, they range from shops of just a few people to a few hundred. They rapidly create new products, and use an "open source" style design community where design ideas and component lists are shared."

Comments

USA is losing because we think we're winning

[mpoulton]

This is why the US is falling behind faster than we think. We are more governmentally encumbered and less capitalist than China in many ways!

Re:USA is losing because we think we're winning

[KibibyteBrain]

This is also part of the problem in outsourcing the actual industrial production of all this stuff. It's really hard to remain innovative and relevant when you design by CAD tool only. This whole idea of design here produce there is just not sustainable for very long. Daily hands on experience with a wide variety of actual manufacturing technologies and techniques is part of what made the US innovative before and is what of what will make China innovative in the future.

Re:USA is losing because we think we're winning

[mochan_s]

This is why the US is falling behind faster than we think. We are more governmentally encumbered and less capitalist than China in many ways!

Why is it that with China the first reflex is always "us vs them" like the parent post?

The Chinese will innovate with the resources that the Chinese have while the US will innovate with the resources that the Americans have (note no us and they).

I don't understand why people feel that it would be better if the Chinese were deprived of this opportunity. I would be more inclined to say "join the party", the "more the merrier" in the engineer's club.

Re:USA is losing because we think we're winning

[Jeff DeMaagd]

I think another part of the problem is when engineers, mathematicians and so on graduate and work for the financial services industry. So they design the latest fad financial service rather than the latest fad electronic device.

At least electronic devices don't up end entire economies like intellectually bankrupt financial services apparently can.

Re:USA is losing because we think we're winning

[Ihmhi]

This is one of the two reasons why I admire Steve Wozniak as a person. He's a tinkerer at heart. He'll sit down at a table with various parts and put together something that's cool. Engineering is like lego for geniuses.

.

.

(The other reason I admire Woz is for his sweet, pimped-out Segway.)

Re:USA is losing because we think we're winning

[DNS-and-BIND]

When browsing comments by Chinese, you will very, very often see the phrase "We Chinese" (women zhongguoren). They consider themselves as different from Americans as ants are different from dirt. Superior, actually - culturally, morally, and physically. You have to realize that years of viewing things like "Sex and the City" has done tremendous damage to the view of Americans from China's viewpoint.

Re:USA is losing because we think we're winning

[Anonymous Coward]

Yes, the US is falling behind because it doesn't have whole industries whose business model is to churn out nothing but counterfeit, cheap knock-off products like China's counterfeiters...

anymore.

This is exactly what the US and Japan and probably most modern industrialised countries did to get themselves started.

Re:USA is losing because we think we're winning

[jabithew]

Because people are stupid and think economics is a zero-sum game. This leads to the chain;

China is getting richer.
If China is getting richer, someone is getting poorer.
We are getting poorer.

Whereas the only thing that holds is the first. If China is getting richer, it means they have more money to buy things from the US/EU and less competitive labour!

Re:USA is losing because we think we're winning

[agnosticnixie]

Basic human nature is cooperative.

Re:USA is losing because we think we're winning

[Anonymous Coward]

Agreed: Look at the "top" B.S. and Ph.D. students (meaning those with top grades and with top personality, critical thinking, etc.) at MIT, Georgia Tech, Stanford, etc. and the jobs they long for most are in management consulting, i-banking, or private equity.

Sell out and grab a quick [big] buck. Luckily, many of these grads go on to start or run businesses; hopefully they remember their roots.

Re:USA is losing because we think we're winning

[fuzzyfuzzyfungus]

I think that the post you quote wasn't calling for the Chinese to be deprived of the opportunity; but for us to recapture it for ourselves.

Competition of the "if I can't have it I don't want you to have it" school is mean-spirited and rather unproductive; but the "interesting idea you have there, I should look into that" school has been responsible for a great deal of progress, and seems to be what grandparent was driving at.

Whether one likes the fact or not, it is undeniably the case that contemporary America has very high levels of regulation(both official on-the-books stuff, and stuff that you de facto cannot do because you'd likely face a ruinous lawsuit if you did). I didn't see anything from grandparent about sending in WIPO; rather the suggestion that perhaps we should dial back things at home a bit.

Re:USA is losing because we think we're winning

[AvitarX]

Probably true for the majority, but there are enough people who who go out of their way to take advantage of others to make a society relying on that basic cooperation not work.

So the fix inevitably becomes iron grip nasty government. Of course the people that are comfortable in such a position of power are not particularly nice people, so it becomes worse over time, as the good people get killed or leave.

Re:USA is losing because we think we're winning

[brizzadizza]

Most likely it will be tied to the rate at which natural resources can be extracted from the land. This can be mitigated to some degree by greater demand for natural resources causing new extraction businesses, but that will not in all cases completely counter a very large demand. Many industries like mining concerns, oil refineries, oil wells and chemical plants take many years to go through planning, permitting, construction, production. All of that prevents "the market" from responding to the increased demand by increasing supply.

In addition, at some point we will reach the limit at which we can no longer extract the natural resources we need for certain businesses. Whether that point is dozens or thousands of years from now depends on the resource, but it is a limiting concern ultimately.

MBA shortsightedness

[hwyhobo]

For temporary profit (that few have participated in) we have outsourced ourselves into irrelevance. As the purchasing power of the increasingly service-based economy diminishes, so do the profits. It is a shortsighted policy - something that MBAs excel at.

Smart; Very smart

[Anonymous Coward]

Several thoughts;

1. Our IP is getting in our way. That is why our forefathers created SHORT TERM IP rights. Now, it is just a money maker for a bit longer, but is KILLING the west.
2. I have thought that if I had money, I would buy some of the plastic fabs as well as electronic fabs that remain in America. Then I would set up SMALLamount manufactuering and ask for ideas. THe approach would be that if an idea came across, then cut a deal with the person(s) to build it, and sell it, and give them a cut. This is done, but typically only after somebody has done 99% of the leg work. That is so that somebody feels protected, but does little good. Better to get the idea in, work with person, and use real experts.

The west will lose unless we get smart and change. China is in this for the long haul. They keep their yuan pegged to the dollar, keep up their trade barriers, and then gripe when our economy is crashing. In the meantime, they are building 2-4 NEW NUKE subs EACH YEAR. It borrow HEAVILY from western ideas.

Re:Smart; Very smart

[Stray7Xi]

For the export market Chinese companies have to import legal components from somone who has a license. So if you work for US processor manufacturer for example, IP law is protecting your job. I suspect that if you have an engineering job in a rich country, IP licensing is one of the things that pays your salary.

GP was complaining about long term IP rights. So in effect you're saying that we're protecting the Pentium 2 processor from being copied (released 1997). I think it's had enough time with protection and should be allowed to be copied

Re:Smart; Very smart

[home-electro.com]

So in other words, they did not 'clone' the processor, but merely reimplemented MIPS instructions set. If the instruction set is patented, the patent should be in the bin where all other s/w patents belong, that is of course a garbage bin.

GSM and other similar licenses are a total rip-off.

Capitalistic open source super cool

[Anonymous Coward]

This is amazing, great stuff. And this is emergin in capitalistic (sic!) China, as a natural way of doing business. By natural I mean not bound by copyright/patent laws, free flow of ideas - things we all love in open source *can* be moved to other markets as well and it is great example.

Wondering if we shouldn't run some campaign that'd allow this kind of things happen in EU?

Re:Capitalistic open source super cool

[DNS-and-BIND]

+2 insightful? WTF? Shanzhai manufacturing is RIPPING OFF OTHER PEOPLE'S IDEAS, it has nothing to do with innovation, open source, etc. You think a Shanzhai manufacturer is going to let me into his factory and inspect his line? Maybe he'll post his CAD drawings and mold milling specifications on the web? Make a forum post where he reveals the specific material he uses, his suppliers, and the prices and contract terms he got from them? You want to see what shanzhai manufacturing makes? Crapity-crap like this janky fake Wii. I guarantee there's no way it will last more than six months, guarantee it. It's not open source at all, free flow of ideas? If by free flow, you mean one-way flow - to the shanzhai guy and not the other way around. It's "let me rip you off, make a cheap crap copy, add a couple of features from OTHER people's work (features that are probably not well-thought-out, nor integrated well with existing features) and sell it at a discount by disobeying all environmental regulations (China DOES have them), and forcing my workers to work overtime for free otherwise I'll fire them and have them beaten by thugs if they complain. I know more manufacturers than you do, buddy.

Re:Remind me again, how did Apple start?

[Jeff DeMaagd]

The likes of an Apple, HP and such to start out making hardware out of a garage like these people do, seem to be diminishing. I don't know if any US garage company can build a custom phone from the circuits on up these days. Designing computers from circuits is probably too expensive of a job now for a garage company. Assuming they do it, the buyer is not going to be consumer, maybe commercial, industrial, government or military uses can justify the expense, but a garage company probably has too low of a profile to tap into those markets without some heavy hitting contacts.

Cf. Silicon Valley

[femto]

The big thing going for the Shan Zhai is that their component makers are just around the corner. Need a touch screen for you iPhone knock off? Duck across town and talk to "Joe" and buy a few crate fulls off him. No long distance language barriers, freighting, delay, currency exchange or other things that an kill momentum in a project. It's not that different to Silicon Valley, in that it is effectively a technology shopping mall for engineers.

Compare that to Australia, where I live. Manufacturing base is close to zlich. Components have to be procured from overseas and local distributors are just not interested. Most time and effort goes into procurement rather than design. Better be sure of your design too, as deciding to make a design change involves a while new procurement cycle. No ducking down to "the local" to get a replacement. As an engineer, I'm envious.

Re:Remind me again, how did Apple start?

[N1AK]

Especially since they are doing more than just plain copies, they are producing products that are, arguably, "improved" models.

If they are as good as that, then surely they don't need to rip off Apple's branding to be a success?

The current implementation of Patents is harming innovation by legitimate businesses, that does not mean that companies should not be able to protect any form of new development for a limited period of time. Currently the nations with the loosest attitude to IP are the ones with the least to gain by cracking down on it, do you think that in 10 years time when there are a few Chinese owned firms actually pushing development the of new products forward the Chinese government won't be much keener to ensure IP rules are followed in other countries?

Re:Open source capitalism? o_O

[Rennt]

You couldn't be more wrong. One of the main pillars of capitalism is that there are no barriers preventing new players from entering a market. In this sense OSS is capitalism at its most pure.

Shops like MS and Apple actively lobby the Government to raise the barrier of entry with laws like the DMCA and software patents. This is decidedly uncaptialistic. Its much closer to fascism really.

Believe it or not, profitability is not really a consideration when it comes to classifying an industry as one kind of ism or another. The key indicator for a capitalistic economy is COMPETITION.

Grrr.

[apodyopsis]

This was happening years ago, back in 2005 in my last trip for example.

What is really behind this is a business that is not shackled by the same leg irons that cripple development in the west - for example accountability, itellectual property, patenting, copyright, health and safety, quality management and so on.

The gist of the problem is that you can either have development that is ethical, safe, manageable, legal, and controlled.... or you can development that is rapid, fluid and prone to appropiate and adapt any idea that fits the bill.

It is impossible to have both.

In China you see an emphasis on the latter and in the west you have the former, this is a culture clash of epic proportions. At the end of the day we are all to blame, we all like the idea of promoting western businesses and industry - but we all have a greater desire for cheap DVD players and iPhone clones.

Yes I can appreciate the rapid, innovative engineering this trend shows in China - but behind it is a clash of cultures and ethical and moral decisions that have decimated industy and development in the western world.