This chapter summarises the defining features of Tencent’s innovation model, highlighting its sequoia-like innovation (deep, directed, invisible, and compound), market-type organisation, and OCEAN ecosystem, which fosters Openness, Coopetition, Empowerment, Autonomy, and stakeholder Needs. We reveal how Tencent balances internal competition and collaboration, empowers teams, and builds an inclusive platform ecosystem. Beyond robust in-house R&D, Tencent’s edge lies in deep innovation grounded in first-principles thinking, user insight, and market acuity. Its invisible and compound innovation seamlessly integrates technological, strategic, organisational, and social dimensions – often imperceptible to users yet foundational to its impact. The chapter summarises how Tencent’s digitally enabled management practices generate value across stakeholders, and how its value-directed innovation serves not only commercial objectives but also societal, governmental, and industry-wide needs. Concluding with the introduction of an open corporate innovation system framework, this chapter outlines key implications for innovation research and practice in the digital age.

This chapter describes Tencent’s development history, its transformation of corporate strategies, its core business distribution, the adjustments it has made to organisational structure, and its innovative developments in both product offerings and the technology it uses, describing how all of this happened in the context of the development of the internet industry in China over the past twenty-five years. The chapter summarises the innovation milestones of Tencent’s products and services, such as the multiple iterations of the instant messaging services QQ and WeChat, and shows how it developed its businesses through major strategic investments and venture capital in many fields. It also describes Tencent’s R&D endeavours and provides a detailed picture of its technological innovation over the past two decades. The chapter also compares Tencent’s patent applications with those of other foreign and domestic companies, showing Tencent’s leading position globally and domestically in this category.

This chapter presents the key features that make Tencent a stand-out case in the global digital landscape, spotlighting the rapid growth of WeChat in both user base and functionality as evidence of the company’s ascent to the forefront of digital innovation. It outlines the rationale and objectives of the book, explaining why Tencent was chosen as a focal point for examining innovation in the digital era. By previewing the book’s structure and central themes, the chapter introduces the concept of Tencent’s distinctive innovation management – including its unique model and the underlying drivers of its success. It also positions the book’s contribution within the broader discourse on innovation management and practice in the digital economy, offering insights relevant to scholars, practitioners, and policy-makers.

Unicorns from emerging economies have a significant impact on entrepreneurial ecosystems locally, regionally and globally; however, little is known about these privately held entities. This chapter presents the analytical framework that brings the research in this book together; it is meant as a structured system for understanding the forces of the distal and proximal environments under whose influence unicorns emerge. The building blocks of the proposed analytical framework include: macro trends, such as the health of the global economy; geopolitical power balance and the race for technological superiority; the elements of the local entrepreneurial ecosystem; and the specific characteristics of unicorns. To a degree, these all enable opportunities for accelerated growth to arise within the context of the emerging economies of the Global South.

This chapter explores the evolving unicorn landscape in China, from the ‘established’ disruptors of the 2010s to the more recent breed of unicorns, reflecting the changes in the domestic and global business environment. We use short case studies to review the innovation strategies of Chinese companies and show the respective roles of the incumbents and the new start-ups and innovators in China’s innovation ecosystem.

This chapter opens Part I of the book, focusing on social media as a digital participatory space. It examines the relationship between the state and platform firms in social media governance over two consecutive leaderships. It firsts map the landscape of social media platforms in China and the variety of participatory spaces they offer. Based on survey data, it identifies two platform companies that have evolved into important players in managing social media platforms with a significant reach in political information – Tencent and Sina. It then examines the significant changes in social media governance over two consecutive leaderships. Under Hu, social media governance was characterized by loose command and control with many choices for users, while popular corporatism emerged at the end of the Hu Jintao leadership and took off under Xi Jinping. Based on procurement data, the chapter elaborates on the state’s reasoning to rely on Tencent and Sina as the only corporations with the expertise and resources to provide key services in managing online public opinion. Its findings demonstrate that under popular corporatism large platform firms can leverage their superior expertise, data, infrastructure, and reach to gain concessions from the state due to their consultant and/or insider status.

This chapter begins Part II of the book – on the SCS as participatory space. It explores the relationship between government and companies in developing commercial social credit ratings targeting citizens. It starts by explaining the overall structure of the SCS, followed by background information on the two most important company players – Alibaba and Tencent. Drawing on procurement notices and process tracing of the evolution of SCS over time based on expert interviews, Chinese academic publications, news articles, and policy documents, it outlines the nature of the state–company partnership and the dynamic changes in the partnership over time. It argues and demonstrates that the user base and architecture built by companies preceding the 2014 plan for the SCS created a certain degree of dependency on platforms for the state. This in-depth analysis of the role of companies during the evolution of social credit rating of individual citizens highlights that commercial credit rating was not established under a command-and-control system where the state dominates the design of the system and corporate players merely follow the state’s vision, instructions, and directives. Instead, Alibaba and Tencent significantly influenced the design and implementation of the central government’s vision.

This chapter builds on the understanding of fuzzy logic regulatory practice, but re-focuses on the main topic of the book: the policy contradictions between the emergence of a seemingly more restrictive cyber regime in China since 2014 and simultaneous announcements of new top-down policies for encouraging entrepreneurial activity. It argues that China’s data and cyber security laws cannot be understood without first understanding both the Chinese government’s Informatisation drive (which includes the Internet Plus policy) and the concept of Network Sovereignty. The chapter is also necessary to understand China’s unique system of governance that is well suited to promote innovations proposed by private Chinese tech companies.

This chapter explains the extent of fuzzy logic law surrounding the legal structure of technology companies in China. The chapter provides a profound illustration of the environment in which Chinese entrepreneurs must operate and remains an ongoing story. From the outset, Chinese technology entrepreneurs must decide how to legally structure their companies in order to account for vague conceptions of legality.

This chapter demonstrates the extent of the data protection problems in China, and the public’s growing concern about loss of privacy and abuse of their personal data. It proceeds to show that under China’s Cyber Security Law, the government has responded to this issue by strengthening ‘data protection’ from abuse by private companies but without shielding ‘data privacy’ from government intervention. In particular, enforced real-name user registration for online services potentially allows the Chinese government to demand access to the local data of any person who uses an online service in China, for national security or criminal investigation purposes. The chapter argues that this internal contradiction within the Cyber Security Law – increased data protection while demanding real-name user registration – may also benefit AI development. This is due, in part, to the vagueness of key terms within the Cyber Security Law, and the accompanying fuzzy logic within the Privacy Standards issued under that law, which allow both tech firms and government regulators considerable discretion in how they comply with and enforce data protection provisions. In the final part of the chapter, it is argued that due to the potential benefits of AI in solving serious governance problems, the Chinese government will only selectively enforce the data privacy provisions in the Cyber Security Law, seeking to prevent commercial abuse without hindering useful technological advances.