3. Innovative ideas and startups are crushed by giant competitors

Silicon Valley has a culture of build-to-sell, where new ideas and promising startups are sold to larger competitors. This allows the owners of small startups to go innovate some more.

China is, however, an altogether different scene, with smaller companies being crushed for the life of them by larger companies. In these cases (which happen more than often), larger companies copy promising ideas off smaller ones, thus selling out the smaller one as the larger company’s customers flock to the new copied product. Threats like these serve as a lesson to smaller companies, and most of the time the fear of failure scares people out of being innovative.

Fortunately, according to Xu things are starting to change with companies like Tencent attempting to be more equitable-- instead of sharing only 10 percent to 20 percent of revenue with game developers, the company is taking an increasingly developer-friendly stance with 70 percent revenue sharing.

But things will only look up if the same culture continues to promote itself in the country. Of course, trying to change something that is as engrained as culture and mindset is more than a gargantuan task; (and one that will only see the light of day when invoked from a higher-up position in management), but China is one of those countries that doesn’t promote creativity and free thinking in the same way as other countries.

So...it should be safe to assume that the innovations will continue to be spawned by those exposed to other countries and cultures, (not anybody from the native environment)—but will India fall in the same rut that China is predicted to be in for the next two decades? Time will tell.