China’s High-Tech Industry: Opportunities & Challenges
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 trillion 20 China US 15 10 5 Lessons from US 0 1980 1985 1990 1995 2000 2005 2012 2022 •Innovative technology industry has contributed to 50%-80% of GDP growth in US. 万 5 China US •Key technological centers in US: California, Boston, Austin, Seattle… 4 •Technology industry covers 10% of GDP in US. 3 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 Approx. 80,000 alumni 6,400 graduate students 1,000 faculty Entrepreneurial Impact: The Role of MIT – E. Roberts and C. Eesley, KAUFFMAN FOUNDATION Top 10 Companies (2006) Koch Corporation: 80,000 employees, $110B, Companies: 25,800 1967 Employees: 3.3 million Intel: 86,000 employees, $38.3B, 1968 HP: 156,000 employees, $22.6B, 1939 Revenue: USD 2000 billions Raytheon: 72,000 employees, $21.3B, 1922 (≈ GDP in Russia, GDP in China in 2009: US$4.9 tril) McDonnell Douglas: 70,000 employees, Excluding: $14.47B,1939 Companies owned by alumni who deceased by 2003, TI: 30,000 employees, $13.8B， 1930 Took over, Genentech: 12,000 employees, $11.72B, 1976 Qualcomm: 13,000 employees, $9.8B, 1985 Or founded by non-alumnus faculty or staff ThermoElectron: 30,000 employees, $9B, 1956 AOL: 15,000 employees, $6.1B, 2001 Dorm Porch Garage Park (“Science as Inspiration” – L . Page, Google 2002)
Case 3: Israel In US$ Israel Top universities: Area 20,000 KM2 • Hebrew University of Population 8 mil Jerusalem GDP/Per 240 bil/31,000 • Tel Aviv University Capita • Technion - Israel Institute of Technology • Weizmann Institute of Science • University of Haifa Cornell-Technion NYC Tech Campus • Investment: $2B Cornell Alumni: • 600 • 2,600 startups/5 yrs companies/30 • 34,000 Employees years • $10.6B Capitals • 38,000 jobs • $23B investment return 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 (morecomparable than Japan & SouthKorea) Taiwan’s “DNA” &“fate” 1. Low profile,unbranded 2. Integrity Can we do itbetter? 3. Culture: Focus on technology & 1. Impetuous,nationalism engineering 2. Hungry, moralvaccuum Tech electronics processingbase 3. Culture Gross margin: 40-50% Low-end worldfactory Industrypolicy: Our industry policy: (1) Founded Industrial (1) Government attention, TechnologyResearch Institute competition (in charge of product (2) Land & taxbenefits development) (2) Immediate tax refund of (3) Every province/city is an NT$20 for every NT$100 of industrial park investment (3) Hsinchu SciencePark
Shenzhen engfei, Wang Shi, Ma Huateng, Wang Chuanfu, Wang Tao… The largest electronic manufacturing & material base ? ? in the world; communications, electronics, medical systems, equipments & software Reform Pilot Zone Rebellion Leading universities Above 2/3 in China Innovative Convergenc pioneer e Military Many complex investors First Shenzhen Adventur Shenzhen mover er Area 2,000 KM2 Pleasant Entreprene Population 10 mil climate urship Average US$17,000 Freedom Fear no income failure GDP US$178 bil Loose Encourage political innovation environm ent Free Creative 45.4% of all international informati Intensive Keen patent filings in China; ranked on flow social competition top in hi-tech output & network contribution to GDP
Hong Kong HKUST, HKU & CUHK ranked No. 1, 3 & 5 in Asia Rebellion Leading Innovation universitieConvergen pioneer s ce Military Many complex investor s First Adventu Hong Kong mover rers Area 1,100 KM2 Pleasant Entreprene Population 7 mil climate Hong urship Average US$34,000 Freedom Kong Fear no income failure GDP US$243 bil Loose Encourage political innovation environ Free Creative ment informati on flow Intensiv Keen e social competition network
HKUST, HKU & CUHK Shenzhen-Hong Kong Bay Area ranked No. 1, 3 & 5 in The largest electronic Asia manufacturing & material ei, Wang Shi, Ma Huateng, Wang Chuanfu, Wang Tao… base in the world; communications, electronics, medical systems, equipments Reform Pilot Zone Rebellion Leading & software Innovation universitieConvergen Above 2/3 in China pioneer s ce Military Many complex investor s First Shenzhen Adventu Shenzhen-Hong mover rers Kong Bay Area Pleasant Hong Entreprene Area 3,200 KM2 climate Kong urship Population 170 mil Freedom Fear no Average US$24,000 failure income Loose Encourage GDP US$421 bil political innovation environ Free Creative 45.4% of all international ment informati patent filings in China; ranked on flow Intensiv Keen top in hi-tech output & e social competition contribution to GDP network