This excites me because, despite all technical challenges in both hardware and software, I see huge opportunities for entrepreneurs: solve problems that matter and relief pains through the use of technology.Read More
In a country that surpassed the United States in 2008 in term of number of internet users and where online purchase seems to be the new favorite way of shopping, E-payment has obviously a great role to play in China.Read More
The China Hardware Innovation Camp (CHIC) is a project initiated by Dr. Marc Laperrouza together with Alex Wayenberg and Pascal Marmier.Read More
From its traditional Kowloon markets to its luxury alleys of Central, Hong Kong is the theatre of constant development. At the feet of the biggest army of skyscrapers in the world, the streets witness millions of transactions every day, in which Swiss companies have a very big part to play.Read More
China has the second largest consumer market in the world. Its population of 1.35 billion, of which more than 50% live in urban areas, will generate an estimated GDP growth of approximately 7% over the next 10 years.Read More
On March 4, the swissnex China Beijing office within the Embassy of Switzerland co-organized a panel discussion on Innovation in China with the title Fast Times and Faster Companies, hosted by Swiss Ambassador H.E. Jean-Jacques de Dardel. The exclusive event, which generated a huge interest among the Beijing start-up community – exceeding the seating capacity by six fold – has welcomed distinguished speakers and tech-savvy guests for a lively exchange on the latest developments within China’s start-up and technology scene. The moderated talk by Andy Mok, co-organizer and Managing Director of Red Pagoda Resources, was joined by:
- Julie Makinen, Fast Company contributor & Beijing correspondent for the Los Angeles Times
- Dr. Zhang Yusheng, CEO & founder of Apricot Forest (2nd most innovative company in China)
- Frances Du, Director of Microsoft Ventures in the Greater China Region
- Jason Zhao, Vice President at Kleiner Perkins Caufield & Byers China, and
- Olivier Glauser, Co-founder and CFO of Shankai Sports
The panel discussion highlighted that innovation is a term, which continuously innovates itself. It strongly relies on social structures, educational institutions, government policies, technologies and their accessibility. A fast moving world requires faster moving companies, able to anticipate and dynamically act to developments in both the near and far future, and to pursue the aim of continuously improving people’s lives or create value within a society. While some critics may argue that China does not innovate particularly well, others like Mrs. Makinen state that China is about to change and to take the lead in innovation. She approaches innovation with an emphasis on technology, accentuating that the access to advanced equipment in, for instance, a hospital, may significantly raise the efficiency of medical doctors dedicating their lives to curing diseases and injuries. Hospitals, unlike humans, act in an institutionalized way, and organizational structures may vary from one place or country to another. It is therefore crucial to engage with new scenarios and domestic institutions in order for a foreign startup or established company to become successful in an unfamiliar market. In a broader sense, the innovative challenge lies not in simply supplying an innovative product to a new market, but rather in a company’s adaptability and willingness to appropriate technologies to a changing context. TradeHero is a perfect example of a foreign startup company based in Singapore, which has gained a strong foothold in China through the customized implementation of innovative technologies, and has achieved to record a remarkable success.
According to Dr. Zhang, innovation starts with caring about an existing problem or discrepancy. In fact, to increase simplicity and make technology cheaper, hence more accessible to the general public, enables changes, creates new opportunities, and facilitates innovative processes. In Du’s opinion, China is currently experiencing exceptional rates of developments in these fields and, as a consequence, is taking big and fast steps in speeding up innovation. Building up on these arguments, Mr. Zhao believes that new technologies now only allow new forms of discoveries, but also strengthen either financial or social networks, again attracting successful foreign companies to major investments in China. As a Swiss representative of visionary entrepreneurs and investors, Mr. Glauser actually made a start-up sports company greatly successful in China. However, he clearly differentiates between technology and innovation, and treats them as two separate entities. In his particular case, Mr. Glauser ingeniously connects the strength of Swiss sports innovation with new Chinese market opportunities. As highly ambitious Swiss projects like the Solar Impulse also show, Switzerland offers Excellency in technology in a relatively small market. China, on the other hand, impresses with a huge market, although its technology standards might still have strong potential for growth. With reference to Mr. Glauser’s success, pairing the two spheres could in fact result in unleashing new and powerful innovative ideas.
In this spirit, the Embassy of Switzerland and swissnex China once again commemorate the 65th Anniversary of the establishment of bilateral relations between Switzerland and China, and promote commitment to research, development, sciences, and technologies all over the world for the benefit of the people and society.
- Contributed by Marcel Schneider, Attaché of Science, Technology and Education Section, Embassy of Switzerland in Beijing
Israel and China are becoming a close collaborative couple in the tech industry. Chinese entrepreneurs admire the technology innovations Israel has achieved and China is an ideal market for Israel companies to expand beyond their borders.
Israel has invested considerably in China to establish a network facilitating the tech collaboration and entrepreneurial activities. For example, IP Bank-China was created in 2010 in Suzhou under the auspices of the Infinity Group, an Israel-based private equity firm that was created by the China Development Bank and the IDB Group in 1993. It manages over $700 million and RMB 2 billion. The bank is focused on acquiring companies, brands, and intellectual property for licensing and commercialization in China. It has over 15 offices across China with a 90-strong team, whose members work across the Infinity Group and IP-Bank China. The China Development Bank primarily provides the RMB funding while the dollar financing has come in from investors all over the world. The business model is to identify intellectual property from Israel and then scout the appropriate acquirer in the Chinese market who might need these types of assets. One case is a company named Power Paper, a producer of micro-batteries (slender enough to be printed on paper) and already a portfolio company of the Infinity Group. They were struggling with their key product for quite some time in Israel. They had incorporated the battery into an anti-wrinkle facemask for commercial purposes. IP-Bank China carved out the Chinese patent from the global patent and started looking for suitable partners in China for entirely different applications. The result was a partnership with a Chinese printing company and the battery was assimilated into anti-counterfeiting labels which are used in the packaging for cigarettes, wine and other kinds of alcohol. When you open the packet, a light, powered by the battery, turns on, showing the consumer that this is a genuine product.
Usually the deal-making model has a variety of approaches. Some patents are to be acquired firstly and later sold out. Some to license, some are used as currency in exchange for equity in companies, the difference with other IP funds is that IP-Bank China is identifying the IP internationally, and help find a Chinese partner and grow together with that company. It also claims to help Chinese entrepreneurs gain access to the market with a low entry point and then share in the results. Currently IP-Bank China is sector oriented and focuses on clean tech, medical, material and high-end manufacturing technologies.
From top-down perspective, as early as in 2008, Israel has signed a bilateral agreement with the government of Jiangsu province ( one of most prosperous region in China),to form Jiangsu – Israel program for Industrial R&D with a primary aim to support joint industrial R&D projects and aimed at carry out commercialization in the global market. Afterwards, another three innovation cooperation agreements have signed during MIXiii Israel Innovation Conference in May this year, with the aim to support Israel companies expand into Chinese market by the means of top-down.
Within the entrepreneurial community, more non-government driven match-making have been happened. Intensive and extensive fact finding and study tours are arranged by a variety of business entities from two countries. Dark Horse Club, a start-up entreprenur incubator in Beijing led a delegation composed of Chinese young entrepreneurs and finished on a seven-day learning journey to study Israel innovation environment and meet with local tech companies.
More and more such activities fuel the Chinese entrepreneurs zeal to collaborate with Israeli companies and Israel is seen by Chinese as a source of advanced technology with the image of startup nation due to extensive collaboration and PR activities. Recently a book “ startup nation, Israel” Chinese version is widely promoted and get the traction in China. The Israeli companies are targeting several sectors essential to China’s development plans; hi-tech, renewable energy, water treatments, medical equipment, communications, agriculture and consumer products. According to the “China Global Investment Tracker,” which measures China’s investments and contracts worldwide, the Chinese have poured $1.7 billion into Israel’s economy and most of it went to the agriculture sector ($1.4 billion) and the rest was invested in Israeli high-tech companies between 2005 and end-2013.
Collaboration in academic and research field also is burgeoning between the Jewish state and the Asia giant. Two top universities from Israel and China announced in May this year that they are starting a $300 million research project focused on nanotechnologies. Tel Aviv University and Beijing's Tsinghua University said they will exchange graduate students and faculty members to work at a joint research center based at the two institutions. The cooperation initially will focus on nanotechnology, particularly with medical and optics applications, but may be later expanded to other areas, including raw materials, water treatment and environmental issues.
It appears that in the coming decade, we are going to witness a rise of quantity and scale of the joint-venture, co-development cases in the field of academic, innovation and business context, It’s time to look eastward ever more attentively.
Food safety is a prevalent concern in China, it’s kind of surprised when IT giant ( Chinese google) Baidu, came up with its smart gadget targeting this problem. Smart Chopstick, made its debut at 2014 Baidu World conference. “In the future, via Baidu Kuaisou, you’ll be able to know the origin of oil and water and other foods–whether they’ve gone bad and what sort of nutrition they contain,” the founder Mr. Yanhong LI said in a speech. The product is claimed to be able to analyze your food before you eat it, testing pH level of common drinks, level of sweetness, temperature, and the quality of cooking oil used, more feature and info such as the origins and varieties of food through Baidu Search, will be developed and the data will be transmitted to the accompanying mobile app through bluetooth.
It is just a gadget of hundreds of thousands of smart devices that pop up overnight across the nation. A craze of intelligent hardware is ongoing fervently. Besides Baidu, nearly all the leading domestic giants like Alibaba, Tencent, Xiaomi have invested heavily in this sector, let alone a great number of start-ups spring up and venture capitalists used to turned off by hardware’s high startup costs and lengthy start times are making their way to the arena.
Internet giants play a role of smart hardware accelerators
Chinese online retail giant JD.com has become one of the first distributors, smart hardware makers would turn to whenever they are about to ship products. Earlier this year, the company launched JD+, an accelerator for smart hardware products, offering funding, marketing support, online-retailing or other resources individual makers otherwise can hardly access. It is expected that there will be a handful of such platforms in China. Baidu has established one offering Cloud services and others like search traffic, but Baidu doesn’t own a direct retail platform.
Aliyun, the division for Cloud services of Alibaba Group, launched Alink platform Aliyun has been trying to have manufacturers of consumer electronics products, from smartphone to smart TV, adopt the customized Android system they have developed and use their Cloud services.
Xiaomi, the fast-growing smart device and mobile service provider, will eventually become a similar platform to JD’s. Apart from working directly with manufacturers on designing smartphones, smart TVs, smart WiFi routers and the like, Xiaomi has started introducing hardware products designed and made by third parties, such as a portable battery charger.
Multi-promotion channel for intelligent hardware
Crowd-funding is developing quickly in China. The largest domestic crowd-funding Demohour platform is looking to further increase and has transformed to focus on specialized platform for intelligent hardware since August 2014. It also organizes offline fair to showcase the latest intelligent device to the public with over 2000 audience each time. As Demohour claims, it has set up alliance with over 500 distributors from home and abroad and can help speed up the access to other markets like USA, Canada, Australia, Japan, Russia, other Asia countries and Europe. Furthermore, it has set up contacts with over hundreds of component suppliers and manufactures in China, which is key element in terms of cost control and process efficiency, it can help start-ups reach the right partner and manage the whole process, usually the start-ups lack the knowledge of supply chain management and spent a great deal of time on learning curve.
Other platforms like Pozible.com, an Australia-origin, China-entry crowd-funding platform also choose intelligent hardware gadget as its china market entry strategy. The Markers, an online web and TV show specialized in China-origin innovation projects has promoted a variety of projects in smart hardware.
As the new and first platform for start-ups to endorse by themselves, iDaiyan has launched two programs already, all in the field of hardware.
Shenzhen, emerging Silicon Valley of Hardware
Shenzhen, the largest migrant city geographically adjacent to Hongkong, is emerging as a hotbed of experimentation in electronics and hardware builders thanks to a comprehensive value chain network and unmatched manufacture capacity elsewhere in the world. The powerful ecosystem there is able to offer a dizzying variety of hardware components and therefore builders can put together anything with a creative idea, test the prototype quickly, tinker and iterate speedy. It’s compared that the work done in the States cost one month can be completed just in one week if happened in Shenzhen.
Shenzhen is also dubbed “ origin of Shanzhan”, because nearly all technical goods in the country are manufactured here, from exceptionally bad copies of iPhones, iPads, BlackBerries and other popularized gadgets to up-to-date telecommunications infrastructure bought by the world’s biggest carriers. The city brags of the strong manufacture base, abundant hard-working engineers, speedy logistics infrastructure as well as most probably the largest electronics component retailing market in the world “ Hua Qian Bei.” There’re over 20 shopping malls located in the Huaqiangbei area which provides about 70 million square meters of business area. Annual sales reaching over 20 billion, and there’s something like 130,000 people employed in the area. Every day, the engineers from the global can be seen scouting the particular components in the vast market although the market environment is not foreigner-friendly and need local knowledge to navigate.
"If you're an engineer with an idea and you're waiting five days or two weeks to test it, that's no way of being creative," said Will Canine, co-founder of OpenTrons, a company building an open-source liquid-handling robot in Shenzhen. "When you're creative you want to try an idea and move on to the next idea and then the next idea. That's the kind of dynamic flow that's possible in hardware in Shenzhen that's not possible in the other parts of world.
Michael Grätzel laboratory at Swiss Federal Institute of Technology (EPFL) in Switzerland, built a photovoltaic device that uses sunlight to split water into oxygen and hydrogen gas with 12.3 percent efficiency using cheap and earth-abundant materials called perovskites.
Perovskite are compounds that can be obtained in the laboratory from various common chemical constituents such as those used in normal car batteries. The device made of perovskites combined with other inexpensive catalysts convert sun's energy into hydrogen with a conversion efficiency of 12.3% and this percentage will soon be higher.
The abundance of perovskites is an advantage that eliminates the need for rare-earth expensive metals in the production of usable hydrogen fuel, making the production of solar cells more affordable.
The conversion from sun to hydrogen gas solves the problem of the storage of solar power, because this gas can easily be store in bottles and can be used to generate electricity on demand.
The research is ongoing and it will take years to get all the data on indoor and outdoor stability of perovskite cells but it could be great to produce cheap clean fuel to power cars in the future!
More info: http://lpi.epfl.ch/page-51005.html
- Contributed by Liliane Gonzalez, Academic Intern swissnex China
Scientist from EPFL in collaboration with China University of Petroleum, University of California and Beijing University of Chemical Technology, developed a revolutionary slurry-based process to capture carbon.
Currently, there are 2 approaches to carbon capture: the first one liquid based and the second one solid based. The liquid approach uses amine solutions that absorb CO2 from the atmosphere, in order to separate the carbon from the liquid, this one is boiled, this step is highly energy consuming and is named regeneration.
The solid material approach uses “metal-organic frameworks” (MOFs). MOF are fine powders able to collect the CO2 due to the nanosize pores on their surface. This low cost approach is difficult to transport and are highly engineering demanding.
The combination of liquids and carbon-capturing solid into slurry is revolutionary. The slurry is made of a MOF named ZIP-8 in suspension in a mix of glycol 2 methylimidazole. ZIP-8 pores are too small for glycol’s molecules, but big enough to capture CO2 molecules. The combination of the low cost and energy efficiency of solid nanoporuous with the simple liquid-based separation process successfully address the 2 main challenges in the carbon capture.
Future plan of these researches is to test this new slurry in the field, to collect CO2 molecules from flue gas in order to reduce global carbon emission.
- Contributed by Liliane Gonzalez, Academic Intern swissnex China
On September 10th 2014, swissnex China had the pleasure to co-organize the first LIFT conference in China. The Lift conferences, for those of you who don’t already know about it, have welcomed more than 15’000 participants from over 40 countries since 2006. These conferences explore the business and social implications of technological innovation. They allow explorers, makers, builders and observers to come together during one day and share their creative and innovative ideas through different workshop, master classes and roundtables.
For their first leap in China, Lift chose the cosmopolitan city of Shanghai and its bustling innovation sector. The selected location to host it was the Power Station of Art, a popular space among the Shanghainese community. This museum/exhibition center is situated on the banks of the Huangpu River in a former electric power station that has been remodeled into an art center.
The conference was scheduled to open at 9:30am, although some of our great visitors started arriving as early as 9:00am, eager to not miss one second of the amazing day that was about to unfold in front of them. The kick-off of the conference was given around 10:00am by the President of Lift Events, Abir Oreibi, who gave more insights to the audience about the mission of Lift, and by Pascal Marmier, CEO of swissnex China, who presented the organization. The visitors then had the pleasure to listen to two guest speakers. First, Thomas Landrai, co-founder of the world largest Do-it-yourself biology lab, called “La Paillasse”, followed on the by David Li, the founder of XinCheJian, China’s first hacker space. Two great speeches, that both put the focus on the idea that there is no need to be an expert in an area to challenge the status quo and create new innovative products or processes.
The rest of the day was two-fold. First, an interactive design exhibition in partnership with HEAD Geneva, which was open all day long for the visitors to enjoy. It regrouped works of young talents from China and Switzerland that all used the interactive potential of mobile computing and augmented reality interface. Among other very creative projects , “Traces”, a table that changed color when in contact with heat, by Liu Yi, and “Binary world”, a physical book made interactive by the use of a smartphone, by Baptiste Milési.
The second fold of the conference was a series of Workshops and Master classes given all along the day in different part of the Power Station of Art. Overall, more than 15 speakers shared their ideas and engaged with their fellow lifters. The topics were varied and interesting and received a very good response from the audience. Among them, a round table about “Chinese Startup Scene; Ingredients for Success”, opened by a presentation by David Ben Kay, a pioneer in China and the founder of Yuanfen Flow, on the entrepreneur’s mindset. It was followed by an open discussion between him, entrepreneurs, angel investors and the audience on the current state of the startup scene in China and their thoughts on its future. A quite insightful discussion for anyone interested in China or entrepreneurship, that led to the conclusion that the startup sector is still very young here and full of space for future ventures. Thomas Landrai from “La Paillasse” gave a very interesting workshop on “Biohacking to Change the World” where the audience was asked to brainstorm about health, environment, energy and architecture. They were then separated in groups to further create crazy stories based on three keywords, for example genetic sequencing, wave and dream. Throughout the day, workshops included topics such as “Open Data for Business”, “Green Energy in Urban Spaced” and “Designing Smart Cities in Asia”, among many others.
To conclude this great day, a Global Pitchfest was jointly organized by swissnex China and VentureLab. The contestants were composed by a selection of Chinese entrepreneurs and by the Venture Leaders, a group of 10 selected Swiss entrepreneurs that traveled to Beijing and Shanghai for 10 days in order to better analyze the Chinese market and plan effective development strategies. Each team was asked to pitch their company for 1 minute to convince the audience, who was in charge of voting for their favorite startups by test messages. In the second round, the 4 startups who received the most votes in the first round pitched again, to see who would be declared the final winner. The night ended with dinner and networking on the rooftop of Power Station of Art.
Overall the day was a great success. The 450+ visitors all took home with them new ideas, new contacts and greater knowledge about fascinating topics. The day was filled with knowledge, innovation, creativity and interactions, and we surely hope to renew the experience next year again!
A few days ago Novartis, a Swiss pharmaceutical company based in Basel, Switzerland, and Google begun a partnership to develop contact lenses that monitor glucose levels in tears. The Google-Novartis prototype lenses contain a device that measures glucose in tears and a wireless antenna transmits the measurements to an external device. This way, they can help diabetics track their own blood glucose levels and hope to commercialize it before 2019.
Novartis and Google are also looking forward to develop other “smart lenses” that can for example detect cancer, thanks to some well-known biomarkers, or use contact lenses to deliver drugs continuously in a lower level than actually deliver.
There is still a long way to go before we see the commercialization of glucose-monitoring lenses, night vision lenses, cancer-detecting lenses or drug-delivering lenses, which need flexible and thin materials to be user-friendly and to go through all regulatory approvals to prove these lenses are effective and safe.
- Contributed by Liliane Gonzalez – Scientific collaborator intern for swissnex China
Lift is organizing the first Lift China in Shanghai in partnership with swissnex China. Lift China will be the place for makers, artists, start-ups and pioneers alike to meet and make fruitful connections with the international community.
In 2014, Lift is looking east again, to the fantastic rise of the Shenzhen economy and the growing innovative power of Shanghai. From “made in China” to “made with China”, engineers, entrepreneurs and designers are creating a new marketplace where western start-ups and eastern manufacturers join forces to reinvent the technological daily life.
Lift China will offer inspirational, actionable and interactive experiences through talks, workshops, matchmaking initiatives and exhibitions, as well as a Venture Leaders session for the best start-ups to pitch their innovative ideas.
In addition, in collaboration with the think tank Hacked Matter, Lift China will organize a discovery trip for Swiss and European makers to meet the great manufacturers of Shanghai and Shenzhen from Sept 11th-13th.
For more information, please go to http://liftconference.com/lift-china-14
Since few years, Chinese companies are using more and more the information technologies (IT) into their business to innovate and differentiate themselves. Indeed, with a high level of customer, these technologies and particularly the web allow companies to reach more and more people while reducing their cost. In China, we can notice that companies mostly innovate by using the Big Data or creating a web platform. Yue’Bao and Xiaomi are two perfect examples to illustrate that. Yue’Bao is using Big Data to innovate while Xiaomi is using an online platform as its main point of sale.
Xiaomi announced a revenue of $2.16B for the first half of 2013, a proof that innovation drives to success. This company built its business model around the following value proposition: providing an efficient smartphone with a low price. This was really an innovation into the smartphone world. This value proposition is addressed directly to the Chinese global market and especially to people with low revenues. But the power of Xiaomi can be found in its CEO, Lei Jun, who built a strong brand awareness into the Chinese market. Like Apple, people buy the Xiaomi products mostly for the brand. Moreover, Xiaomi smartphones are selling only online in order to reduce the costs. In order to take advantage of their brand awareness, Xiaomi decided to also sale peripheral products. These products turn out to be a real success according to the sales. The last but not least interesting aspect in the business model of Xiaomi is that all the products are improved through the co-creation concept. It means that the customers help Xiaomi to draw the future products. Thus, the relationship between the company and its customers is strengthening. This is increasing their loyalty for the brand.
Unlike Xiaomi, Yue’Bao is taking advantage through Big Data. Indeed, Yue’Bao is a money-market fund using Alibaba Big Data to predict the customer behavior/creditworthiness. This leads to one of the most important force of Yue’Bao business model: a high return on investment compared to traditional banking. This service is addressed to small Chinese investors since it allows the investment starting from 1 RMB. That is why it is really easy to use and works via an app available on most of smartphones. In addition, people are free to transfer and withdraw the money at any time, without being penalized. By adapting the money-market fund service to lower and middle Chinese class, Yue’Bao realized a huge success. Indeed, Yue’Bao fund size reached 400 billion yuan in February 2014.
These two examples showed us how innovation through new technologies can affect positively your business. It can help to boost your business and take new opportunities. Nevertheless, innovation can sometimes have a huge impact on your business model. Thus, besides innovation you also need to consider the factor adaptation.
Hong Kong Science and Technology Parks Corporation (HKSTPC) is a statutory body set up by the HKSAR Government in 2001. It is positioned to enable science and technology companies to nurture ideas, innovate and grow, supported by local R&D facilities, infrastructure, and services and programmes across five key technology clusters.
Now HKSTPC is launching a 2-year programme called “Soft-landing Programme for Technology and Innovation Collaboration” with its objective to provide a platform for TTOs of overseas universities, research institutes, their spin-off, and start-up companies to promote their innovations and technology to Hong Kong industry and to explore the collaboration and market opportunities in HK/China.
Interested overseas TTOs, R&D centres and their related tech spinoffs and startups are encouraged to submit their list of projects to the park by completing and returning the application form at https://www.dropbox.com/s/xyt5oes9axxar2k/Soft-landing%20Programme%20Flyer.pdf?m.
Shortlisted projects will be entitled to
• get shared office space for soft-landing purpose during visits to Hong Kong;
• join networking and match-making activities;
• participate in familiarisation programme, including factory visits, meetings with industry leaders and workshops;
• post their project information on the dedicated project website and channels to be provided by HKSTPC; and
• obtain partial travel support (air-ticket plus hotel accommodation) for the senior executives of overseas TTOs, key researchers and project leaders
For further information, please feel free to contact swissnex China or visit http://www.hkstp.org/
Plus MAT AG (+MAT), was founded in 2011 as a young start-up in Bern. The core team of +MAT owns more than 50 years of experience in the photovoltaic (PV) industry. The company name stands for "more materials", and reflects its mission to develop new materials for alternative energy. For +MAT China is a must-go-to market, given its strong PV industry.
Innovation in recycling
To make PV technology competitive with traditional energy production methods, the biggest challenge today lies in reducing its relatively high production cost and in increasing PV module reliability. +MAT is developing a novel system, including machines, process and service, to recover the precious PV grade Silicon particles wasted during the PV wafer process, and to use them directly in the PV production line again.
For the core project of +MAT, on-site Silicon recovery during PV sawing process, the laboratory feasibility has been proven during the first phase of the project (from July 2011 to June 2012). Since then, a prototype system has been under development thanks to a CTI project between +MAT and ZHAW in Winterthur.
Besides the CTI project, +MAT is financed by the STI foundation and the Economic Promotion of Canton Bern for seed funding. Now +MAT is preparing its market entry and is in active contact with potential pilot-plant partners and prospective clients in China.
Business in China
The world’s largest PV manufacture base is in China with thousands of producers along the value chain. Although suffering overcapacity and anti-dumping restriction in Europe, the whole industry has recovered recently with continuous investment and market consolidation. +MAT anticipates a tremendous recycling demand in the near future with the central government’s emphasis on energy efficiency and environment protection technology. Meanwhile the team is aware that the challenges it faces might be quite different from other start-ups. +MAT business is in PV production, which is strongly influenced by government programs, market force, confidence of investors, producers and users. The recipe for success is not as simple as technology commercialization, but a challenge to balance all influencing factors into the company’s decision making.
The lessons learned from the start-up of business
+MAT is prepared to stay flexible with its business model without losing sight of what the company wants to do and how to approach its customers. As the market changes a lot and very fast in China, the start-up team will need adapt to new trends in the market. The team has learned that starting a business in a foreign country takes time and that all aspects should be evaluated.
+MAT was one of the first applications and has kept dialogue with swissnex China since the launch of CTI-China CAMP. Its founder Ms. Yun Luo is a Chinese who has been working and living in France, Germany and Switzerland for many years, her industrial experience spreads wide over the whole PV value chain. The core team of +MAT also includes other competent and experienced names in PV in Europe.
During +MAT trip in China, swissnex China organized a workshop for +MAT to communicate with experts on china market entry strategy in swissnex office and accompanied a visit to Zhenjiang city and met with local government and PV companies.
Additional follow-up can be expected and the liaison support will continue.
CTI Market Entry Camp
CTI Market Entry Camp is a training program offered by CTI Start-up Coaching and operated by swissnex. Many high tech start-ups find that the local market in Switzerland does not allow substantial enough growth to achieve scale and profitability.
The CTI, in conjunction with different partners, therefore runs market entry camps for its start-ups in locations with innovative and rapidly growing markets. Market Entry Camps have been available in San Francisco and Boston since 2010. In 2013 the CTI set up pilot projects for Shanghai, New York and Bangelore together with swissnex.
During their three month stay at the CTI Market Entry Camps, the start-ups work on a number of individual milestones and have an opportunity to familiarise themselves with the local business culture, structures and networks to get ready for market entry.
For early stage start-ups there is a possibility to attend a Market Validation Camp, which is shorter and allows start-ups to complement their business plan with an individually adapted internationalisation strategy.
The awakening of China’s astonishing economic growth has inevitably hurled the country to the edge of being in desperate need to tackle the intensifying society problems such as widening wealth gaps, social divides, environmental pollution, inequitable access to health care, education and endowment insurance.
The momentum for social innovation is picking up since then. Under government endorsement, various initiatives have been springing up. As quoted from Wikipedia, social innovation refers to new strategies, concepts, ideas and organizations that meet social needs of all kinds — from working conditions and education to community development and health — that extend and strengthen civil society. Social Innovation is emerging worldwide as people realize that it is time to work together to find new solutions to the challenges facing our society. Those engaged in social Innovation apply their own definition of social Innovation, but all definitions have one thing in common: working together towards a sustainable society.
swissnex china has invited Transi.st, an active social innovation incubator” tech+impact” in Shanghai to share their insights on what is happening in this arena.
Innovation is not usually the first word that comes to mind when one thinks about China. Instead, most people, Chinese or foreigner, would perhaps tend to think of an emerging economic and political juggernaut. A juggernaut built on the productive awakening of a large and industrious population after decades of slow economic growth, heavy investment in infrastructure and an export led economy. Factory for the world: making things faster and cheaper than anywhere else without adding hardly any incremental value from creativity, design or invention. A more nuanced perspective might include the resultant challenges that have come as the cost of this awakening: disparities in economic opportunities and outcomes, social displacement for migrant laborers and rural peasants, uneven or inadequate social services and support for the elderly, the young or the physically handicapped; and of course environmental degradation.
However, it is precisely from this context of growth and dynamic change creating large scale challenges that has created opportunities for real social innovation in China.
Around the world, for many if not most startups, the biggest problem is not usually building the best product. Instead it is finding a problem worth solving. Startups and young companies are resource constrained. Any product that they can offer will literally be the proverbial “Version 1” with significant failings and shortcomings. It is only over time, as the company grows, as the product feature set matures, and as the company’s delivery and service of the product becomes more robust, that the customer’s experience with the product can approach solving or alleviating most of the pain they feel. Therefore, the original pain is so much that the startup’s barely viable, minimal product is still doing enough to justify the real risks of working with a young and uncertain product and company. This is the true reason why most startups have a difficult time getting market traction. It’s not because the product isn’t good enough, of course it isn’t good enough it’s an immature product from an immature company; they aren’t getting traction because people don’t care enough about the problem being solved to use an incomplete solution.
This is not the case for true social innovators. These startups are grounded in a perspective of customer first, or in actuality, society first or humanity first. Their ambitions are to solve challenges that are massive and acute and fundamental. Armed with purpose, they attract talented teams that display their commitment through the inevitable ups and downs of their startup’s life. This difference between mainstream startups who may be more mercenary, more focused on their own product idea (or copying the product ideas from foreign success stories) and social startups is even more stark in China. Years of large venture capital funds riding a wave of market opening and rapid sectoral growth spread generous returns for many participants without the need for taking substantial early stage risks. Entrepreneurs were incentivized to pitch VCs on whatever startup ideas could convince investors to give the most funding, not necessarily ideas that could convince customers to give the most revenue.
But in this market, and perhaps particularly at this time when it may seem that some of China’s social challenges are reaching breaking points, social entrepreneurs and innovators can see these challenges as problems worth solving and problems worth building companies around.
This is why our company and other Chinese impact investors are more excited than ever to be engaged in this sector. While the ecosystem is still developing, and while there are still fundamental, definitional questions to be explored around governance, regulations and transparency, this is also a moment when we and the social entrepreneurs we support are needed more than ever. Whether their companies are building innovative energy solutions for the homes of marginalized communities or education and quality of life applications for frontline workers or reinventing the way urban waste is disposed of, these companies are moving beyond simply demonstrating that Chinese entrepreneurs can embed social impact into their core operating models. They are scaling their solutions and leading the way towards a healthier market where all companies, even mainstream and traditional industries, remember that they are members of society and must be accountable to all stakeholders.
China is making great efforts to transform a traditional investment-led economy to a more sustainable model of a technology-driven and market-oriented economy. Since the beginning of the new millennium, China state government has created the framework of seven emerging industries that are intended to be important in order to accomplish this goal.
The State Council of China declared a policy document in 2010 “the Decision on Accelerating the Development of Strategic Emerging Industries”. The industries that gain considerable weight include:
China 7 Strategic Emerging Industries (SEIs):
- Energy efficient and environmental technologies
- Next generation information technology
- Advanced equipment manufacture
- New energy
- New materials
- New-energy vehicles
China government is hoping an industrial upgrade by establishing a quantitative target for the SEIs’ contribution on GDP. The SEIs are anticipated to account for 8% of GDP by 2015 and up to 15% of GDP by 2020.
As usual, SEIs policy has followed the similar pattern to other technology development policies in China, where central government formulates the general guidance and principles while local government bears the responsibility of detail implantation, and both central government and local government will allocate corresponding fund support. Under the policy direction, a number of government agencies have been engaged in the program. The program’s implementation is another crucial dimension that takes time because of the repeated debates and the exploration by horizontal coordination among different government key agencies and hierarchy vertical communication.
An inter-ministerial coordination group is required to set up upon the 12th Five Year Plan on the Development of the Strategic Emerging Industries. National Development and Reform Commission (NDRC) is nominated to take the lead of the coordination group with other group members playing a role of analyzing, overseeing and supporting the implementation. The following diagram is a briefing on china government agencies involved in SEIs.
From the government side, financial incentives will be a primary measure to motivate companies to conduct R&D and commercialize new technologies and products in SEI. The incentives include tax rebates and financial subsidies that considerably help company increase investment on SEI. Most SEI supporting fund will mainly come from local government and private enterprises as the interim measures for the administration of special funds for SEI that emphasizes a combination of funding from various funding sources. Local government will set up specific funding pool or utilize existing funding program to support SEI local development, and determine the allocation of the funds according to local SEI policies and industry demand.
The industry transformation and economy reformation would definitely reshape the market and reshuffle the market players. There are concerns on discrimination against foreign-invested companies and products. Supporting policies usually requires the indigenous intellectual property rights with the goal to cultivate innovation and technology development, which would turn away foreign companies who are unwilling to import intellectual property. Another method is China government procurement that is viewed to be an important measure to promote certain technologies and brands. There are concerns that the procurement policy may favor Chinese companies in SEIs. Given the profound influence and complexity among different stakeholders, the best method of SEIs calls for testing and verification.
Business incubators are designed to support start-ups through the early stage of the development. They provide the start-up companies with nearly all-aspect services such as hardware (space), funds, expertise, management, etc. to improve their chances to survive and succeed. To this end, business incubators are crucial for the development of companies which are characterized by new technologies.
Business incubators have grown very fast in China during the past years. Figure 1 shows the corresponding data from the year of 2012. It can be seen that in total 1239 business incubators have been developed. Compared to the data in the year of 2000 (only 164), it is really a big step forward. Now these incubators support around 70,000 enterprises, which have about 1.43 million employees and take up almost 43 million m2 building area. The sum of revenue achieved by these enterprises is up to 490 billion CNY. In China, most business incubators are developed directly by government or universities. They guide opportunities and new ideas not only for start-ups but also for large scale companies. In addition, the form of these incubators is becoming more and more diverse, and as a contrast their functions are moving toward high specialization. Although the scale of business incubators has been developed rapidly, it is still worth noting that most of these incubators locate at the eastern part of China, where many fast developing cities locate and the economic environment is still much better than the western parts. Therefore, the effect of radiation from these incubators to the whole country is relatively limited.
Tongji University Incubator
To gain an insight to the Chinese University Incubator, the Tongji Unversity Incubator based in Shanghai area is taken as an example.
Tongji University, located in Shanghai, is one of the oldest and most prestigious universities in China. Among its various departments, it is especially highly ranked in engineering science. The architecture, urban planning and civil engineering departments have consistently ranked first in China for decades. The automotive engineering, oceanography, environmental science, software engineering and German language departments are also ones of the best domestically. Tongji University is not only famous for its achievements in scientific research, but also is recognized highly by its contribution to the social economy. For example, cooperating with the Shanghai government, it has developed the knowledge and economy circle since the year of 2005, which is centered on the university. The output value created by the corresponding enterprises increases from the initial 3 billion CNY to about 18 billion CNY in 2011. Tongji University plays an important role in the knowledge innovation and industry upgrading during the past years.
Shanghai Tongji Science and Technology Incubator Ltd. was founded in December of 2003 with a registered capital of 8 million CNY. It now locates in the Chifeng Road South Campus of Tongji University, having more than 700 registered companies and around 20,000 m2 official area. As a business incubator, it not only supplies basic offices for the young enterprises but also supports these companies with government registration, financial support and consulting services on taxation, science and technology, etc. During the past years, Tongji incubator has gradually established its professional incubator services platform and improved its existing enterprise services working mechanism, aiming to create the best environment for the incubation and growth of new companies. It has particularly put effort in supporting new entrepreneurships established by the graduated students. In addition, the internal management and control of the incubator is also becoming mature, which passed the Quality System Certification ISO90012008 in the April of 2010. It can be believed that in the future Tongji incubator will continue playing a significant role in technology transfer, supporting innovation and entrepreneurship and job creation.
Tongji incubator is open to all industry sectors. 37% of the tenant companies have their focus on modern design. This can be traced back to the strength of Tongji University in architecture and design. Electronics and Information Technology represents the second largest group, which is followed by advanced manufacturing, environmental protection, and renewable energy & energy saving.
Tongji incubator offers the start-up companies various supports. The rent for the office area is between 1~2 CNY/ m2 / day, which is less than half of the regular rent fee. The tenant companies can have 100% tax refund on the regional level. The incubator team organizes pitching and networking events between the start-ups and VCs quarterly. The incubator also provides marketing and HR service for its start-ups companies. It presents at various expos and networking events, offers free ads for its start-ups, and recruits talents for the start-ups. The financial office of the incubator is not only responsible for the financial issues of the incubator but also serves the start-ups, which does not have the capacity to deal with their own financial issues. Besides, supports for pitching preparation and IP application can also be received from the Tongji incubator. It can be seen from Figure 3 that the number of approved patents has been increasing over the years that the success rate for patent application has also been increased.
There are even more polices to attract talent: Interns hired by the start-ups in Tongji incubator will be paid by the local government. High talents (e.g. returnees with own patents) who would like to start businesses in Tongji incubator can receive a compensation for private housing.
Normal incubation time duration is about 3 years. Before entering the incubation, the entrepreneur teams are training intensively to prepare for the pitch. The pitch is mainly attended by the VCs and industrial experts. The teams that pass the selection process could enter the incubator. The college students and graduates from Tongji a fund between CNY 200-500k can be granted by the incubator. This grant can be obtained in forms of debt with zero interest rate or as equity of the incubator limited for 2-3 years.
One third of the start-ups graduated from the incubator successfully according to the speaker of Tongji incubator. After leaving the incubator the companies can move to the accelerator in the Tongji Science and Technology Park, where more places are available and normal polies are applied.
Success story - Techase
Shanghai Techase Environment Protection Co.,Ltd was founded in 2008 by Wenbiao Zhang, right after his graduation from Environmental Engineering Department of Tongji University. Zhang and his team fortunately received 150,000 CNY investments from the Shanghai Students Technology Entrepreneurship Foundation in the same year to establish their own company. Techase is focusing on the development and manufacturing of water treatment equipment, the sludge disposal treatment and recycling, and the environmental engineering services.
To start a new enterprise is not an easy task. At the beginning of the entrepreneurship, Zhang and his teams did not have enough employees so they normally worked more than 12 hours a day to get familiar with the market and also to learn the operation of the equipment. In order to exhibit their services and techniques, Zhang and his team even tried to do the experiments for the market for free. The first order they received is 77,000 CNY, which greatly encouraged their enthusiasm. By the end of the year 2010, Zhang and his team had received more than 20 orders, which supported them to make the first round of finance of about 5.6 million CNY. After five years of development, Zhang made his second round of finance at the beginning of 2013 in about 30 million CNY. He promised to his team members that the company will achieve an output value of 0.1 billion CNY this year, and will appear on the market by the year of 2016.
Considering the successful performances of Techase, Zhang said once that he really appreciates the founder of his company, Tongji incubator. As people recognize, there are many difficulties for graduated students to establish their new enterprises. To this end, Tongji incubator supports in both finance and business experiences. For example, it decreases the rental for the office sites and also contributes with free investment. In this way, Tongji incubator helps decreasing the burden on the young companies, creating favorable environment for their rapid growth.