By now, we are all familiar with the idea of China as an economic superpower. It is the world's biggest trading nation and is on course to overtake the US as the world's leading economy. The data can be debated, particularly the importance of overall size vs per capita, but something big is happening.
The US remains the biggest market for competitive intelligence companies. There are more companies buying competitive intelligence, and they are spending more, than in any other country. Beyond the US, the size of a country's economy does not directly translate into competitive intelligence budgets. In our experience, for example, Japanese and French companies spend very little on competitive intelligence. But it is possible that Chinese companies may start to buy competitive intelligence services. As large, growing companies selling to new markets, they may do so in a big way.
Is this realistic? There are certain assumptions behind such an idea.
First, that outsourcing competitive intelligence is, or will become, a regular part of how Chinese companies do business. In the very different but slightly similar economy that is India, that has not happened. Indian companies rarely buy in competitive intelligence, certainly not from US or European companies. Likewise for the other major Asian economy, Japan.
Secondly, that Chinese companies would outsource to a non-Chinese consultant. Analyzing Asian competitors in Asia is probably best done by a local consultant. Even analyzing US and European companies could be equally well done by a local consultant who understands the Chinese client's history, language and culture better. It may also be that the Chinese government wants oversight of serious competitive intelligence being carried out by its leading companies and not allow such work to be outsourced to non-Chinese vendors.
Thirdly, and probably a minor consideration, that Chinese companies would want to use the techniques that US and European vendors use. It may be that China will place more reliance on electronic techniques. There are many anecdotal accounts of such activity, although limited real evidence.
While there is interest in competitive intelligence among Chinese executives, it seems unlikely that demand from Chinese companies will overtake demand from US companies in the next couple of decades.
So much for realism, but should a US or European vendor take on Chinese clients, if the opportunity presents itself?
An interesting consideration is what the US might think of competitive intelligence companies working for Chinese clients. The US seems to get very nervous when considering the intelligence gathering of Chinese companies. Many of the applications of the Economic Espionage Act seem to relate to Chinese activities. Chinese companies can fall foul of US suspicions, even in the absence of solid evidence. Taking on Chinese clients may make a competitive intelligence vendor less palatable to US companies, regardless of how legally and ethically the vendor may behave. Assuming that most competitive intelligence vendors rely heavily on US clients, what the US might think of a Chinese client list needs to be considered.
Such suspicions may mellow over time, of course, perhaps to coincide with a time when Chinese companies are ready to use external vendors for competitive intelligence.
For now, having Chinese clients for competitive intelligence remains a limited scenario. But, as with most things Chinese, it will be interesting to follow developments.