A small excerpt from Peter Diamadis' Blog
https://www.diamandis.com/
The Upside of Open Source
One of the most common complaints about doing business in China is weak intellectual property (IP) rights and frequent infringement. Prosecuting cases is a consistent challenge and foreign trust in local IP laws could be higher.
But while poor protections have discouraged many, they have also led to some of the most rapid and competitive innovation on the planet.
I often talk about the importance of rapid iteration, of constantly experimenting with an idea, killing a project when it won’t work, and frequently disrupting your own business.
In Shenzhen, rapid iteration is essentially crowdsourced.
As weaker IP rights give way to open source designs across the board, thousands of engineers and tinkerers collaborate across products, building progressively better iterations, and letting the market claim a winner.
Forming the crux of Shenzhen’s “Maker Movement,” local inventors live by open source hardware and software, constantly sharing data online about how to build newly released inventions and iterated gadgets.
Loosely known as shanzhai (a term originally used to reference counterfeits or knockoffs), this open source phenomenon permeates everything from circuit board designs to miniaturized sensors.
And with an abundance of freely shared data comes an abundance of product versions, spanning the gamut of AR glasses, fitness trackers, gaming equipment… you name it.
As a result, Shenzhen’s shanzhai ecosystem has birthed a generation of what Kai-Fu Lee calls “gladiator entrepreneurs,” each zooming to get products to market, meet demand overnight and iterate adjacent products before others innovate over them.
But while you might write this off as yet another brutally free market of ‘copycats,’ Shenzhen’s technology integrators have had to build novel designs not only to beat out domestic competitors, but international ones as well.
As explained by Professor Neil Gershenfeld—founder of Fab Lab and director of MIT’s Center for Bits and Atoms—"Instead of copying, other designers must make improvement and the upcoming products will also be stored in the database of open design for public use."
And as China finalizes its transition to an innovation-based economy, Shenzhen’s hardware masters have started dominating completely new markets.
Take Shenzhen’s DJI. Already owning more than half of North America’s drone market over a year ago, DJI’s drones continue to eclipse competitors, dominating the industry in price and performance.
And at maker hubs like Huaqiangbei, engineers with cheap, abundant and lightning-fast access to the resulting hardware are the first to improve upon it.