Why China is Winning the Innovation Race by Jumping Backward

With the start of a new year and the official English launch of my new book, China’s Next Miracle, it feels like the perfect moment to explore the book's central concept: The “Fosbury Flop” as a metaphor for China’s revolutionary approach to innovation.

Many of you might have seen me briefly mention this idea in previous newsletters. However, I’ve never dedicated a post to explaining the model itself. Now, with the book officially out, let’s dive deep into what this “Fosbury moment” is and why it’s critical for every business leader to understand.

The Leap That Changed Everything

In 1968, a relatively unknown high jumper named Dick Fosbury performed at the Olympics in Mexico City. Instead of using the conventional bar-centric techniques, he did something that looked bizarre: he sprinted towards the bar, twisted his body, and jumped over it backward, head-first. He won the gold medal, but more importantly, he transformed the sport forever. The “Fosbury Flop” proved that by inverting the accepted model, one could achieve heights previously thought impossible.

Today, China is executing a similar manoeuvre on the global business stage. While the world continues to rely on a traditional, linear model for creating something new, China has been flipping the script for years. It’s performing a Fosbury Flop on the entire process of value creation, and the results are beginning to shake the world as China is applying its model globally.

Two Competing Innovation Models

Based on my 25 years of experience working in China, Silicon Valley and Europe, I’ve observed two fundamentally different approaches to innovation. This isn't just about start-ups; it applies to any innovation initiative, even within large companies, that aims to create something new. The distinction lies in the direction of the process.

The Western ‘Inside-Out’ Model

The Western model operates in an incremental, “inside-out” fashion. It begins with a good idea, focusing on creation, quality, differentiation, and out-of-the-box thinking. The journey is a sequence of refining this idea before it hits the market at scale. I describe it as an “inside-out” model, because the “spark to innovate” start from inside the organisation with a solid strategic plan to push it out to the market.

The process typically follows these five steps:

1. Ideate: The process starts by defining a core new concept or technology.

2. Validate: The team creates a business plan and Minimum Viable Product (MVP) to establish a product-market fit in order to secure internal or external funding.

3. Experiment: The concept is tested externally by market or investor feedback.

4. Build: Once investment is secured or clients start buying, the product gets fully developed at full scale and standardized.

5. Go-to-Market: The final step is the activation phase, involving sales, branding,  marketing, and support. The innovation concept has become a product line. 

The Chinese ‘Outside-In’ Model: The Fosbury Flop

China’s model operates in a fully immersive, outside-in direction. Rather than starting with a perfect product, it starts with the customer in mind; prioritizing delivery, sales, speed  and pragmatism. I describe this as “outside-in” because the initial “spark to build” comes from the market, not the organization. The first objective is survival through traction: enter fast, deliver at scale, and validate product-market fit based on real customer scrutiny. Only then does refinement and deeper innovation follow.

The five steps for a Chinese innovation initiative look like this:

1. Go-to-Market: The first action is to find customers in an existing market. They don’t seek to be different from the outset; they get going to make a difference.

2. Build: A “quick and dirty” version of the product customers are asking for is built.

3. Experiment: The team interacts deeply with its first clients, iterating constantly based on their feedback to improve product quality, stability, and offering.

4. Validate: As they scale, they confirm which products and clients have a true, sustainable product-market fit. Only then they start creating innovation strategies.

5. Ideate: Only now, with a validated product and customer base, do they focus on novel ideas, features and standards to make the product special and differentiate.

Chinese innovators sell first and perfect later, moving step by step across the river by “feeling for stones.” Western companies tend to stay on the riverbank, refining their leap. When they finally jump, the market has often moved on — leaving them struggling amid a sea of Chinese competitors.

Chinese innovators begin pragmatically, driven by sales and survival, and add idealism once they have outcompeted others.

Western innovators begin idealistically, driven by the product and uniqueness, and add pragmatism later as competition intensifies.

The BYD Face-mask Story: The Fosbury-Flop in Action

A good illustration of this inverted model is that of how the EV manufacturer BYD became one of the world's largest producers of face masks at the start of the pandemic. Within weeks of the initial lockdown in Wuhan, BYD transformed part of its factory to produce masks. Existing equipment suppliers couldn't meet the sudden demand, so BYD took a proactive leap. Here is how they applied the five steps:

1. GO-TO-MARKET: BYD immediately decided to design their own production equipment and enter the mask market, regardless of the risk that the epidemic could have been over in a few months – like with SARS in China in 2003.

2. BUILD: They quickly made a product the market desperately needed, completely outside of their core business focus on cars and batteries.

3. EXPERIMENT: They rapidly switched production, steadily increased mask quality, identified new suppliers and distribution channels, and scaled up production at an incredible pace.

4. VALIDATE: The market confirmed their move. BYD was soon producing five million masks a day. They have since validated this as a separate, ongoing business activity, but not anymore as part of their core business focus.

5. IDEATE: This crisis-driven initiative did more than just create a new revenue stream; it accelerated BYD’s mastery over its entire value chain, reinforcing the vertical integration capabilities that are key to its success in the automotive industry today.

While most Western multinationals in the same situation reacted by adjusting their supply chains, BYD was much more proactive. They moved from Action to Build to Envision, perfectly executing the Fosbury Flop.

Why This Is Your Wake-Up Call

Understanding this distinction in the innovation process is crucial. It explains the remarkable speed and adaptability of Chinese companies. It is a myth that Chinese firms are fast and agile because of some unique capability, skill, or talent. They become fast and agile because they do not wait for perfection. Instead, they engage with the market from day one, building resilience and a deep understanding of customer needs into their DNA.

Any company can learn from China’s inverted innovation model. Yet many remain slowed down by an idealistic desire to make a difference from the outset. As the world becomes more unpredictable, competitive and fast-moving, the real challenge is not to speed up; it is to surrender the illusion of control and let the market lead innovation rather than follow it.

If the world remains focused primarily on the political risks posed by Beijing rather than recognizing China's bottom-up innovation model as a paradigm shift, China will have won the innovation race in most industries by 2035. We urgently need to treat China’s innovation model the way we now treat Artificial Intelligence: as a reality that can no longer be reversed.

Understanding this is not about copying China. It is about recognizing that the rulebook has been rewritten. It is about having the courage to question our own assumptions and, perhaps, to design our own Fosbury Flop.

To explore this Fosbury-flop model further, I have extensively elaborated on this in my book China's Next Miracle, now available in English.