China has been known as the world's factory for many years. That status, however, is becoming a thing of the past as the country is pivoting the foundation of its economy from investment to consumption.

Factoring in rising wages and a shrinking working population, businesses in China can no longer hold onto the once profitable model of making merchandise such as shoes and toys to imposed specifications for global brands.

The way forward for businesses in China, in light of these changes, is to stand out from the competition not in terms of quantity, or even just product quality, but R&D prowess.

The importance of innovation for a company to survive in today's ferociously competitive market is evident: just look at how fast brands like Apple, Samsung and Google are launching new products to woo today's savvy consumers. Some new ideas may not work for the customer, granted, but staying inert is a self-signed death warrant. The fate of Nokia after its rivals developed the more user-friendly iOS and Android, for example, demonstrates this point.

The same is true for countries too. The industrial revolution, fueled by technological advancements, shaped the history of Britain and its empire; electric inventions by Thomas Edison lit the way forward for America to overtake Britain and France as the leading world power; the information revolution that also originated in America gave its prime mover tremendous clout in cyberspace and beyond.

But what about China's track record in innovation? After its four great inventions (papermaking, gunpowder, printing techniques and the compass) in ancient times, the beacon of brand new thoughts has tended to shine brightest in industries directly related to national interests and the people's welfare, which have received strong support from the government.

Between 1964 and 1970, in just six heady years, China tested its first atomic bomb, hydrogen bomb and launched its first satellite.

Dong Fang Hong I (Red East 1)