China s High-tech Industry: Opportunities & Challenges Prof. Gan Jie
Outline Research and thinking on hi-tech clusters Past 30 years & next 30 years Cast studies: Silicon Valley, MIT, Israel, Taiwan Shenzhen-Hong Kong Bay Area: Next Silicon Valley, new opportunities The only road that leads Chinese manufacturing to success Technological Innovation + Industry 3.0/4.0 Status quo of the manufacturing industry a corporate survey with the largest samples A rising industry A few cases: Dreams, studies & startups New advantages for China s technological innovation
Outline Ecological system of hi-tech clusters Case studies: Silicon Valley, MIT, Israel, Taiwan Automation Technological Center (ATC): Dreams, studies & startups Shenzhen-Hong Kong Bay Area: Next Silicon Valley, new opportunities HKUST Robotics Institute: Turn more dreams into reality
China vs. US, by GDP In US$ GDP in China Per Capita GDP in US Per Capita 1980: 180 billion 300 2.8 trillion 12,000 2012: 8.2 trillion 6,000 15.7 trillion 48,000 20 trillion China US 15 10 5 0 Innovative 1980 technology 1985 1990 industry 1995 2000 has contributed 2005 2012 to 50%-80% 2022 of GDP growth in US. Lessons from US Key 5万 technological centers China in US: California, US Boston, Austin, Seattle 4 Technology 3 industry covers 10% of GDP in US. 2 1 Question: What is the new engines of growth in China s economy? 0 1980 1985 1990 1995 2000 2005 2012 2022 2032 2042
Case 2: MIT 4,100 undergraduates 6,400 graduate students 1,000 faculty Approx. 80,000 alumni Top 10 Companies (2006) Koch Corporation: 80,000 employees, $110B, 1967 Intel: 86,000 employees, $38.3B, 1968 HP: 156,000 employees, $22.6B, 1939 Raytheon: 72,000 employees, $21.3B, 1922 McDonnell Douglas: 70,000 employees, $14.47B,1939 TI: 30,000 employees, $13.8B, 1930 Genentech: 12,000 employees, $11.72B, 1976 Qualcomm: 13,000 employees, $9.8B, 1985 ThermoElectron: 30,000 employees, $9B, 1956 AOL: 15,000 employees, $6.1B, 2001 Dorm Porch Garage Park ( Science as Inspiration L. Page, Google 2002) Entrepreneurial Impact: The Role of MIT E. Roberts and C. Eesley, KAUFFMAN FOUNDATION Companies: 25,800 Employees: 3.3 million Revenue: USD 2000 billions ( GDP in Russia, GDP in China in 2009: US$4.9 tril) Excluding: Companies owned by alumni who deceased by 2003, Took over, Or founded by non-alumnus faculty or staff
Case 3: Israel In US$ Area Population GDP/Per Capita Israel 20,000 KM2 8 mil 240 bil/31,000 Top universities: Hebrew University of Jerusalem Tel Aviv University Technion - Israel Institute of Technology Weizmann Institute of Science University of Haifa Cornell-Technion NYC Tech Campus Investment: $2B 600 companies/30 years 38,000 jobs $23B investment return Cornell Alumni: 2,600 startups/5 yrs 34,000 Employees $10.6B Capitals Technions : 125 listed in NASDAQ 50% by Technion grads 4000 startups near Haifa
Ecosystem of Innovation in Israel High-quality talents education accept 1m high-tech Jewish immigrants from all over the world around the 1990s talents selection system, military service, interdisciplinary innovation (battlefield entrepreneurs) Jewish wealth Government Yozma VC funds: government + domestic VC + foreign VC == star enterprise BIRD research fund with America, encourage R&D together in Israel == 60% of NYSE and 75% of NASDAQ Israel enterprises are funded Loose commercial system: the most simple to found a company, start a business again (20% success rate) Culture Crisis awareness
Case 4: Taiwan (more comparable than Japan & South Korea) Taiwan s DNA & fate 1. Low profile, unbranded 2. Integrity 3. Culture: Focus on technology & engineering Tech electronics processing base Gross margin: 40-50% Can we do it better? 1. Impetuous, nationalism 2. Hungry, moral vaccuum 3. Culture Low-end world factory Gross margin??? Industry policy: (1) Founded Industrial Technology Research Institute (in charge of product development) (2) Immediate tax refund of NT$20 for every NT$100 of investment (3) Hsinchu Science Park Our industry policy: (1) Government attention, competition (2) Land & tax benefits (3) Every province/city is an industrial park
Shenzhen ngfei, Wang Shi, Ma Huateng, Wang Chuanfu, Wang Tao?? eform Pilot Zone Innovative pioneer Military complex Rebellion Leading universities Convergenc e Many investors The largest electronic manufacturing & material base in the world; communications, electronics, medical systems, equipments & software Above 2/3 in China First mover Pleasant climate Freedom Loose political environm ent Free informati on flow Shenzhen Intensive social network Keen competition Adventur er Encourage innovation Creative Entreprene urship Fear no failure Area Population Average income GDP 45.4% of all international patent filings in China; ranked top in hi-tech output & contribution to GDP Shenzhen 2,000 KM2 10 mil US$17,000 US$178 bil
Hong Kong HKUST, HKU & CUHK ranked No. 1, 3 & 5 in Asia Innovation pioneer Military complex Rebellion Leading universitie s Convergen ce Many investor s First mover Adventu rers Area Hong Kong 1,100 KM2 Pleasant climate Freedom Loose political environ ment Free informati on flow Hong Kong Intensiv e social network Keen competition Encourage innovation Creative Entreprene urship Fear no failure Population Average income GDP 7 mil US$34,000 US$243 bil
Shenzhen-Hong HKUST, Kong HKU & CUHK Bay Area ranked No. 1, 3 & 5 in Asia i, Wang Shi, Ma Huateng, Wang Chuanfu, Wang Tao eform Pilot Zone First mover Pleasant climate Freedom Innovation pioneer Military complex Loose political environ ment Free informati on flow Rebellion Shenzhen Intensiv e social network Leading universitie s Hong Kong Keen competition Convergen ce Many investor s Adventu rers Encourage innovation Creative Entreprene urship Fear no failure The largest electronic manufacturing & material base in the world; communications, electronics, medical systems, equipments & software Above 2/3 in China Area Population Average income GDP Shenzhen-Hong Kong Bay Area 3,200 KM2 170 mil US$24,000 US$421 bil 45.4% of all international patent filings in China; ranked top in hi-tech output & contribution to GDP