Monthly Research
& Market Commentary

Silicon Valley versus China – Examining the Impact of Strategic Play
Identity/Strategy / 03 Jun 2015 / By Simon Wardley

In the latest research from the LEF, we are examining the impact of strategic play at a national level.  To say this is a complex topic would be a gross underestimate, but can we somehow find a way through the complexity to find useful patterns that can be exploited?

Silicon Valley vs China


In previous LEF reports, we have discussed the importance (and lack) of situational awareness in many businesses.  We’ve covered how to use weak signals (peace, war and wonder) to identify future points of change to be exploited.  All of this work has been context specific.  The problem with tackling national level competition is the contexts and factors involved are vast.

To give you an idea, I’ve characterized some of the factors we’re actively examining in Table 1 and provided a short description.  To analyse competition between nations, we’re using the five factors that Sun Tzu discussed in The Art of War covering purpose, climate, landscape, leadership and doctrine.  Our focus is to compare the current state between two nations (A and B) as best as possible, and use changes in direction of travel/weak signals where available to anticipate the future state (targeted on 2025).

Table 1 – Factors involved

Table:Silicon Valley vs China Factors Invoved


Purpose covers that which causes others to desire to follow you without fear and to have harmony with your goal.  It’s a broad topic from existing beliefs (for example, the American Dream) to perception in the outside world (for example, the influence of Hollywood) to the cultural impact of issues such as social mobility (for example, do American’s believe in the American Dream anymore?) to management (for example, do executives make decisions based upon common interest, shareholder interest or naked self interest?) to strategic play (for example, do we exhibit high levels of situational awareness or simple meme copying?  Is there cohesion within organizations?)

Climate covers the interaction with the economic climate, common economic patterns and general economic forces.  This includes constraints (for example, access to resources), capabilities (for example, access to physical, financial and human capital) and trade (for example, access to external markets).

Landscape covers the environment itself.  This includes not only points of change but positioning to take advantage of these points of change (either through situational awareness or blind luck).  This is an extremely broad field covering points of technological change (that is, industrialization of discrete technology components from the Internet to Intelligent Agents to Robotics) to Emerging Tech (the genesis of new markets – for example, BioTech and Materials) to market impacts (from urbanization, to increased consumer markets to emerging markets).

Leadership covers the ability to set a direction of travel and the position of players in the market.  This ranges from Government influence (for example, Education to Military) to the success of actors (that is, companies including state owned organizations) in various markets.

Doctrine covers the system itself, the mechanisms and levers of control, the structures used and the existence of bias.  Of particular interest is the use of fiscal, monetary and industrial policy as mechanisms of control, the directed use of Government led R&D investment (basic) and the existence of economic bias within the system – that is, the belief that ‘our’ sort of capitalism is the right sort. 

The nations we have chosen are US vs China.  Once we have an idea of whether there is a clear winner (if at all) by 2025, then we will be examining to see what exploitable patterns exist (if any) between such a clash. 

It should of course be emphasized that the model is just a guide and we won’t be able to test the validity of the model until 2025 itself.  However, we hope that useable patterns can be found that can be exploited with an understanding of the context that a business exists in.


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