Business Model Innovation by Chinese Companies

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.

Business model canvas of Xiaomi

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.

Business model Canvas of Yu'Ebao

swissnex contributes to the Sino-Swiss Economic Forum 2014 in Beijing

On 1 July 2014 the Free Trade Agreement between Switzerland and China was inaugurated by the Swiss State Secretary for Economic Affairs, Mrs. Marie-Gabrielle Ineichen-Fleisch, at the Sino-Swiss Economic Forum in Beijing. swissnex China was a partner at the forum and organized two panel discussions:

Can the FTA boost collaborative innovation?

Panelists:

- Ms. Tina Tao, COO and Partner, Innovationworks
- Mr. Olivier Glauser, Co-Founder and CFO, Shankai Sports International
- Prof. Ursula Backes-Gellner, Professor for Business and Personnel Economics, University of Zurich

Moderator: Mr. Pascal Marmier, CEO, swissnex China

With China’s rapidly developing ecosystem, it is expected that more innovation will be coming out of China in the near future. In this sense, the FTA has potential to serve as a catalyst to bring Chinese and Swiss innovators together. This panel shed some light on the innovation landscapes of the two countries and explored possibilities to bring Chinese and Swiss innovators together.

In order to kick off collaborative innovation between China and Switzerland, the panelists agree that free exchange of any kind is crucial: exchange of students; academic exchange; exchange of entrepreneurs; trade; Chinese companies using Switzerland as a hub to access Europe; Swiss companies taking responsibility in education in China. 

Fostering innovation through IPR?

Panelists:

- Prof. Chuntian LIU, Dean Intellectual Property Academy, Renmin University of China
- Prof. Florent THOUVENIN, Professor at the Law Institute, University of Zurich
- Mr. Peng LIN, Co-founder and CEO of Zhigu Ruituo Technology Services
- Mr. Daniel LUTZ, Managing Director of Nestle Food & Beverage, Greater China

Moderator: Mr. David Kay, Founder of Yuanfenflow Consulting Firm

The FTA between China and Switzerland has a chapter on Intellectual Property Rights (IPR). This panel explored the impacts of this chapter, its potential for fostering innovation, and the role of IPR for innovation in general.

The panelists agree with Professor LIU that the notion of indigenous innovation in China is crucial as China is currently at the critical moment of shifting growth patterns. They are confident that given more time, IPR protection in China will be better developed with more sustainability. The panel also discussed the issue that IPR can be overprotected and hamper innovation – they entered a lively discussion with the audience on this issue.

香港/Hong Kong — the Asian tech hub?

Luca Delacretaz, the swissnex scout in Hongkong

What comes to your mind when you first think of Hong Kong? Dim sum? Dragon boats? Flashy Lights? Busy financial centre? What about entrepreneurship? Although few people would have associated Hong Kong with the tech industry a few years ago, the recent boost in the local startup scene and innovation parks has drastically changed the game, making Hong Kong an important player with formidable potential for the upcoming years. But before I introduce you to one of the world’s most vibrant and multifaceted cities and its rapidly growing tech scene, let me first tell you a bit about myself.

First off, I am neither an engineer nor an entrepreneur — I am a theoretical physicist. But don’t run away! My boss at swissnex won’t allow me to write equations, so you are safe.

Lunar New Year at Wong Tai Sin temple

I first discovered Hong Kong a few years ago during an exchange year abroad from the Swiss Institute of Technology, Lausanne (EPFL). It didn’t take long for me to fall for the city, and once my exchange was done, I couldn’t wait for the next chance to return. That opportunity came this Spring, between the end of my Masters in Columbia University and the start of my PhD at Stanford. After reconnecting with the research groups at the Hong Kong University of Science and Technology (HKUST), I learned that a new Particle Theory Group had been formed, led by Henry Tye, a renowned cosmologist from Cornell University. I now have the privilege of working in this group, collaborating with the local postdocs and PhDs, and enjoying the view on Clear Water Bay for coffee breaks.

Now how is all this connected to entrepreneurship? During my stay, I wanted to discover more of what Hong Kong had to offer, and decided to work part-time for swissnex as their official scout in the area. So when I am not busy developing mathematical tools to describe neutron stars and black holes, I visit incubators and co-working spaces, interview young and ambitious or experienced and insightful entrepreneurs, and take part in pitching nights or other startup events.

The Hive, one of the many co-working spaces of Hong Kong

In a nutshell, my job is to determine whether (and how) Switzerland should strengthen ties with Hong Kong in the Research and Development sectors, both academic and entrepreneurial. In particular, should budding Swiss startups start looking towards Hong Kong as a potential launching platform? I believe the answer is YES.

Hong Kong has long been a strategic location to set up small businesses. Visas are easy to come by, taxes are low for SMEs, and the city offers access to the enormous Chinese market, without the legal fuss of starting a business directly in the mainland. There is virtually no language barrier, and making connections is so easy it is practically inevitable.  However, Hong Kong has traditionally not had a very entrepreneurial spirit. The widespread money-driven mindset has lead most fresh graduates to choose finance over science, or large and well-known companies over young startups.

“Budding Swiss startups should start looking towards Hong Kong as

a potential launching platform”

That being said, public opinion is changing and Hong Kong now has the necessary infrastructure to become Asia’s tech hub. Less than 4 years after the launch of HK’s first co-working space, the city now has over 20 freelancer-friendly locations (5 of which opened in the last 2 months), making the high rent problem virtually obsolete. It has become difficult to decide which of the numerous startup-related events to attend, these ranging from startup weekends and pitching nights at CoCoon, to startup grind events hosted by the Hive and other co-working spaces. The change in public opinion can also be felt in universities, where entrepreneurship is now considered a viable career path (see e.g. HKUST Entrepreneurship Center). On the R&D side, the Hong Kong Science and Technology Parks Corporation (HKSTPC), Cyberport and the Hong Kong Design Centre have defined sectors where Hong Kong could potentially become the center of excellence in Asia over the next few years. For instance, the HKSTPC has formed 5 technology clusters (which match very well Switzerland’s areas of expertise!) and is looking for additional research groups to join. The Hong Kong government has also shown keen interest in intensifying development in innovation by increasing support from the Innovation and Technology Fund (ITF), and proposing to “set up an Innovation and Technology Bureau as a centralized body to co-ordinate and promote innovation and technology policy” (source: gov.hk).

Hong Kong Science & Technology Park

An entrepreneur who had recently expanded his business to Hong Kong once told me: “In my state in the US, I had 300 competitors for a market of 1M people. Here in Hong Kong, I have China as a market, and 10 competitors”. Whether you are a young engineer with a new product or an experienced entrepreneur wishing to expand your SME, now is the time to pack up your ideas and head over to Hong Kong to catch the wave before it leaves!

Start-Up Wuhan at swissnex China, 13 May

On 13 May, swissnex China hosted a group of young innovators from Wuhan - winners of the first Start-up Wuhan Social Innovation Week and the team of Ban-Ma.com, the key organization behind the whole project.

Ban-Ma Social Innovation Week

Start-up Wuhan tells a story about a group of ambitious young people. Engaged in different professions, they have gathered in Wuhan for the same dream that they would transform this city by their Innovation + Action. The series project 2014 is collaborated by Ban-Ma.com and China University of Geoscience (Wuhan). The one-month Social Innovation Competition has engaged hundreds of students and various international experts from design, social innovation and commercial fields.

Story Sharing at swissnex China

After the intensive workshops and brainstorming, the 2 winners of the competition stand out from the 8 groups and won the chance to come to Shanghai for one week study tour, and swissnex China was their first station in the trip.

The afternoon was composed of the speech addressed by Mr. Lu Rui, the chief curator of the project and the presentations given by the two groups, one is named “Re-old is Good” and the other –“Da Vinci”.  Through the presentations, Re-old is Good showed their strong interest on the traditional handcrafts and they’re striving to make a platform/brand to promote the culture of Chinese traditional handcrafts, and to bridge the pioneering designers with the traditional craftsmen. Completely different from the first group, “Da Vinci” had a special focus on entrepreneurship and social networking sites. They are trying to build a networking site for university students to find their project partners effectively.

Still A Long Way to Go

The voice of the young was impressive indeed, however being an entrepreneur and an innovator is never an easy job. During the discussion session, the team of swissnex China had exchanged the ideas and thoughts with the students regarding project concept, business model and marketing strategies etc., which also encouraged them to further develop their projects.

Besides, the Ban-Ma Social Innovation Week is also planning for the next edition in fall, which will be not only focusing on the campus but more open to the public.

Young Swiss in China – Event on Career Opportunities, 30 April

After the last event, where the participants learned to prepare traditional Chinese dishes, this event was more focused on starting or continuing a career and work life here in Shanghai.

Young Swiss in China, supported by swissnex China, invited Mr. Nicolas Milonas and Mr. Florian Fêche, two headhunters with a long time experience, to give the invited guest a smart overview of opportunities in China for young professionals. If already a lot of foreigners are established in Shanghai they said, the second tiers cities of China are really attractive, and there is still a lot to accomplish in those cities. China represents a career booster for young professionals; they have access to a management position at least two times faster than in Europe.

Audience at the event

Mr. Nicolas Milonas and Mr. Florian Fêche

The guest present had been taught about the differences between the job market in Europe and in China, how to avoid mistakes, and how to use LinkedIn as a tool to increase chances to find the job one wants. Many of the young professionals present took home some valuable advice.

If you are interested in joining the association and in participating events, please contact Augustin Romaneschi, email youngswissinchina@gmail.com 

- Contributed by Augustin Romaneschi, President at Young Swiss in China

The World Tourism Forum Luzern First “Talent Boost” in China, 22 April

The World Tourism Forum Luzern held its first “Talent Boost” event in China. As one of the most active forum in the tourism industry, the Forum continues to expand its international network with leading universities in the field. In China, WTFL will collaborate with ECNU (East China Normal University), one of the leading universities in hospitality and tourism.

The program at ECNU featured keynotes from industry leaders such as Prof. Martin Barth, President World Tourism Forum Lucerne and Michael Henssler, President  Kempinski Hotel S.A. – China, as well as a panel discussion moderated by Pascal Marmier. The panel focused on the talent shortage in the industry and some of the initiatives under way to solve it.

The first “Talent Boost” event in Shanghai aimed on raising awareness of the importance of young talents in the industry. In order to find, manage and foster young talents, it is of great importance to create an attractive environment for the “Future Generation” in the industry. The cooperation between industry and academia, and institutions will contribute to create this important platform, in order to help facilitate connecting the young talents to the key players of the industry.

In both countries, hospitality has a very long tradition, but over the past years, the “supply of talents” has become more difficult. By following trends, being innovative and by focusing on a praxis-oriented training and a solid education program, and by offering the possibility of internships, the search for the right talent could be facilitated and improved. With the partnership between WTFL and ECNU (East China Normal University), and the “Talent Boost” event, an important commitment has been set. 

The next forum will be held in April 23 – 24, 2015 in Lucerne, Switzerland, and the first forum in China is planned to take place in 2016. Hopefully with many young talents coming from all over the world, who will share their passion for tourism and hospitality, and who are enthusiastic to share, and strive to gain experience in the industry in order to play a key role in the future. 

Read more information here:

World Tourism Forum Lucerne

press release in English

press release in Chinese

Building bridges between Schaffhausen and China, 10 April

About 70 friends of Switzerland visited a special networking event at the swissnex China office on April 10th. It was focused on the Swiss Canton of Schaffhausen and its connections to China, organized in close collaboration with the Swiss Consulate General. The Canton of Schaffhausen is the most northern region of Switzerland and is famous for its wine culture, a historic old town and for the impressive Rhine Falls, Europe’s largest waterfall. Furthermore it is home to several world leading companies and an attractive location due to its proximity to the Zurich Airport. Schaffhausen is working on strengthening its position globally to attract businesses and tourists.

The idea for such an evening came from the two interns Lea Im Obersteg and Niklaus Waldvogel, both originating from Schaffhausen and eager to present their region and its qualities.

The first speaker, Mr. Marco Rhyner, acts as Chief Representative China of the Investment Promotion Office of the Canton Schaffhausen. His presentation focused on the industrial development and environmental protection efforts, as well as key attractions of the region.

The second speaker, Mr. Mujia Zhang of the Schaffhausen based Georg Fischer Company, has over 20 years of working experience in Switzerland and is currently the head of GF’s Automotive Business Unit in Suzhou, China. He told the participants the story of his company, being one of Schaffhausen’s most successful and now operating on a global scale.

After those inspiring talks, the guests enjoyed a stimulated networking part with a rich finger food buffet with Swiss specialties and as highlight, they had the possibility to degust some fantastic wine from the famous Schaffhausen Blauburgunderland region. The evening was concluded by a lucky draw, with various Schaffhausen related prices.

Vision Day - To Plant the Seeds for Social Innovation

Environmental sustainability, aging population, developing health care…lots of social dilemma forced China to tackle with urgent needs. Can we find new ways to solve them?

On Dec. 10 2013, the first creative lab for social innovation at Gongyi Xintiandi, sponsored by swissnex China, attracted more than 80 participants. Including one day group discussion and half day planning meeting, the workshop inspired entrepreneurs, NGOs, social entrepreneurs and government as well to come out impactful and initiative way dealing complex issues.

The aim of this Vision Day is to co-design concrete working areas of the initiative, addressing diverse questions like how competences skills are needed, what policy framework should like, how social enterprises and NGOs engage to implement project. 12 groups are divided to bring about social innovation and shared values together.

In the first day morning, two keynote speeches brought inspiration to the discussion. Gu Yuan, the founder and director of AHA Center in Shanghai, which offers education supports to organizations in the field of social innovation. In his speech, “four blind spots“ were highlighted and each of them being a cause for slow evolution in Chinese corporate social innovation:

• Lack of empathy
• Underestimation of local wisdom
• Underutilization of social capital
• Lack of patience

Another keynote speaker, Chandran Nair, the founder and CEO of the Global Institute For Tomorrow (GIFT), an independent think tank focusing on an Asian worldview. In his talk, he encouraged the Asian countries to find their own ideas of how to deal with today’s social instabilities and problems instead of copying from western countries. He believes that strong rules in the cultural, political and social environment are needed, and they have to be set by the state governments and not by private companies.

Executive Director of swissnex China, Pascal Marmier delivered his points of view according to his US experience. He strongly support the idea to bring people from divided sections to the table and work together to fix problems concerning the society, the time and the human beings.

In the afternoon, each group carried out their own projects with different focuses and interesting ideas were presented to everybody: one group planned to set a product chain based on an NGO helping the autism children discover their talents on drawing, and another group named their project as “Four seasons happiness ” to help with social learning by all kinds of community activities.

In the following day, participants who wished to take a lead and co-design the initiative further went together as a round table. We can see that a collaborative social innovation community is forming and we are now waiting to see more programs to follow.

Economic Mission to Xuzhou, 2-3 December 2013

Xuzhou – not Suzhou, is the new destination of the economic mission this year organized by the Swiss General Consulate and SwissCham Shanghai. About 15 Swiss companies from various industries joined this mission. Examples of Swiss companies are Oerlikon, Swiss Re, Panalpina, Swissnex China, etc. 

Xuzhou government warmly welcomed the Swiss Delegation. The delegation had meeting with the Party Secretary of Xuzhou, Mr. CAO Xinping and many other government officials. Mr. Cao introduced the history of Xuzhou city and the current development of the city. He stressed the focuses of Xuzhou’s development strategies: further development and renovation of the city infrastructure, improve ecological environment by increasing the forest coverage. Mr. Cao expressed the will to gain more attention from the Swiss industry and to establish more collaboration between Xuzhou’s local enterprises and the Swiss companies. In name of the whole delegation, Mr. Schellenberg extended the deepest thanks to the government support for this mission. He recalled the first visit in Xuzhou in March this year, and was impressed by the latest development in the last months in Xuzhou. 

Group Photo with Mr. Cao Xinping (middle), Party Secretary of Xuzhou and Mr. Schellenberg, Consul General of Switzerland (forth from left).

During the stay, the Swiss delegation visited XCMG, the world top 5 construction machinery company and Nhwa pharmaceutical company, the first listed pharmaceutical company from Xuzhou. The company visit was followed by interesting discussions with the local companies from Xuzhou Development Zone and Xuzhou High-tech Zone. The discussions provided the companies from both sides to find out the common interest and the complimentary strength. The participants of the delegation did not only get to know the fascinated history about Xuzhou City, but were also very impressed by the current development of Xuzhou. Swiss companies showed strong interest to strengthen the collaboration with local companies in Xuzhou. The local industry also had very open attitude the work together with the Swiss companies, not only in the traditional industries, but also in the field of biomedical technology, IT, safety industry, fine machinery, etc. They would like to talk about not only foreign investment but also joint R&D projects. China University of Mining and Technology, a high-level university located in Xuzhou, showed great interest to have contact to Swiss universities and establish collaboration with the Swiss industrial and academic partners. 

The feedback of this mission was very positive. The participants of the Swiss Delegation appeal for the regular economic missions in this form.  

The view of the XCMG’s manufacturing site

What actually makes this city so interesting for so many Swiss companies? 

Xuzhou is the largest city in northern part of Jiangsu Province. It has been a city of great military importance in the history. And it is the birthplace of the first emperor of Han Dynasty (Liu Bang, 256-195BC). Xuzhou has a population of 9.9 Mio and a total area of 11,259 km2. For the past three years, the city reported the fastest growth rate in Jiangsu. In 2012, its GDP reached RMB 402 billion with an increase of 13.2%. Xuzhou has the world largest Solar Polysilicon Research and Production Base and China’s largest construction machinery research and production base. XCMG ranked top 5 in 2012 among world’s construction companies.  

The major reasons for Xuzhou to attract foreign companies are summarized below:

1. Xuzhou has very convenient transportation networks. With the high-speed train Xuzhou can be reached from Shanghai and Beijing in 2.5 hours. Next year, Xi’an is also reachable in 2.5 hours from Xuzhou. International airport and water transportation are also available. 

2. With its long tradition to be on the top list in China in terms of construction machinery, the city provides a lot of experienced technical human resources and technical expertise in this field. 

3. Compared to other cities in the Yangtze Delta, labor cost in Xuzhou is relatively low. 

Envisioning Food Safety Solutions 2025, 27 November

Even though many actors in the food safety landscape have showing strong commitment, food safety remains a big challenge in China. On Wednesday November 27 at the Napa Wine Bar & Kitchen, swissnex China collaborated with the EHL (hotel management school in Lausanne, Switzerland) organized a food safety event - “Envisioning Food Safety Solutions 2025”. 30 experts participated in the workshop aiming to find new potential solutions to the food safety challenges in China.

All the experts were divided into small groups targeting different issues according to the supply chain comprises producer (farm), distributor, food processor, distributor/wholesale, retailer, caterer, and end consumer.

But, who exactly is responsible for what kind of problems in the food supply chain?

Farms: Excessive use of pesticides and fertilizers is one of the causes for unsafe food. Also, environmental pollution (of soil and water) causes contamination, which is also due to the proximity of farming areas and industry.

Distributors: As agricultural products pass through a number of distributors, foodstuff originally not contaminated can get mixed up with contaminated ones, which lead to cross-contamination.

Food processors: Overdose of chemicals is a challenge to food safety. Compared to food processors in Europe and the US, small Chinese food producers bear virtually no risks of losing their reputation. It has been reported that small food processors close down when problems occur and open up again in a different place and/or under new names. This decreases their motivation to make sure the food they produce is safe.

Retailers: Small retailers, e.g. on wet markets, again do not bear the risk of reputation losses. Wholesale retailers and larger retailers face challenges with the large number of certificates of their suppliers. Control and management is complicated which facilitates fraud. Labeling of products sold to consumers can be inaccurate, not up-to-date or missing.

Caterers (hotels and restaurants): Restaurants and hotels face might need to source food from many different sources, which make it difficult to ensure its safety. Again, small enterprises do not need to care too much about reputation losses.

From the consumer perspective, the major problems were information transparency, lack of public awareness and traceability. To deal with these problems, one small group of experts conducted a brainstorming session to come up with ideas of possible solutions, which include

1. More Education and Awareness

• Provide education to farmers
• Educate consumers to have more concerns and knowledge of food
• Offer training for international standard
• Establish training programs for local government
• Call for related party attention
• NGO for consumer education
• School education on food safety
• MOOCS + certification of people

2. Increase Information Transparency

• Website for food scandals
• 3rd Party information
• Information transparency with QR code
• Establish food network
• Create instant food safety apps with review and rating from consumers and authorities
• Develop home DIY Testing Kit

3. Increase Traceability

• Establish and apply international standards using one language
• Health certificate for food workers
• CCTV tracing
• Smart package
• Smart labeling 

4. Shorten the supply chain

• Consumers go to the farms and buy products there
• E-trading (Producer sells directly to the end consumer)

One of the approaches to realize the solutions was Smart Package (with QR code, for example). The food processors pack their product with the smart package to identify their product , which increases the traceability of the food product, improves the communication between the food processor and the end consumers to build up the trust.

Similar brainstorming discussions were conducted in different groups for respective solutions. At the end, a cocktail session was followed to let each group presented their discussion results as well as for further networking. 

swissnex China Lecture: New Industrial Revolution, Nov 4

How many shoes do you need?

No, the topic was not about the latest designs of shoes or the latest edition of running shoes, which would make you run even faster!

Our guest speaker Peter Marsh, former editor of the Financial Times and Author of book "The New Industrial Revolution: Consumers, Globalization and the End of Mass Production" shared his insights and thoughts on the evolution of manufacturing and it's future developments. By taking the audience on a journey through the industrial revolutions, he was talking about the history of manufacturing and what the future might hold. Claudio Boër, Senior Adviser swissnex China in Guangdong, presented some interesting thoughts from the perspective of sustainability, by asking how much energy is being "left over" when we don't buy a product, such for example shoes.

Peter Marsh, former editor of the Financial Times and Author of book "The New Industrial Revolution: Consumers, Globalization and the End of Mass Production"

Claudio Boër, Senior Adviser swissnex China in Guangdong

Did you know that if 20% of the shoes being produced on the market are not going to be sold, the amount of energy for their production equal to these 20% is 54 million megawatt/hours?

In other words, six large electricity power plants (coal/oil/atomic) are required in order to produce, each year, products that nobody will ever buy! Within the past decades manufacturing in China has rapidly evolved. As prime location for low-cost manufacturing China became the world’s production factory. Being aware of future developments, the audience discussed question for example regarding sustainability, energy and consumer habits. How can we, as individual raise awareness on the consumer side, on its level of demand? Why are products being produced, when there is a constant surplus of 20%? Should mass-production/manufacturing become more regulated? Both experts shared their personal thoughts and views with the audience, who later had the chance for individual talks. 

Soft-landing in Hong Kong, a gateway to China mainland market for international SME

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/

A significant step into a brighter PV future

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.

Contacts

Plus MAT AG

Höheweg 55, 3054 Schüpfen, Switzerland

Dr. Yun Luo, CEO

Yun.luo@plusmat.ch

Tel: +41 79 393 87 60

www.plusmat.ch

---

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.

>> http://www.ctistartup.ch/en/services/cti-market-entry-camps/

>> http://www.swissnexchina.org/foryou/cti-china-market-entry-camp

Pioneering Social Innovation in China

 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.

---

Calvin Chin

Co-founder of Transi.st  

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’s 7 Strategic Emerging Industries

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):

1. Energy efficient and environmental technologies
2. Next generation information technology
3. Biotechnology
4. Advanced equipment manufacture
5. New energy
6. New materials
7. 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.

Tongji University Incubator

Introduction

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.

Figure 1  The output of business incubation practices in China (2012).

 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.  

Figure 2: Industry sectors of the tenant companies in Tongji Incubator (source: Tongji incubator)

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.

Figure 3: Number of patents applied and approved betweeb 2008 and 2011 (source: Tongji incubator)

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.

CHINANO in Suzhou

 CHINANO 2013 Conference & Expo took place in Suzhou, the city that is known as China’s nanotechnology commercialization and innovation hub. The main topics of the conference were nanotechnologies for energy and clean tech, nanotechnology applied in prevention and diagnosis, nano-tech investment matchmaking, etc. Many Chinese nanotechnology companies and international delegations attended the conference and the expo.

Pascal Marmier, the director of swissnex China, gave a presentation about the Swiss innovation in nanotechnology at the international roundtable. His talk gave an overview of the nanotechnology activities in Switzerland and the existing cooperation between Switzerland and Chinese universities in the field of nanotechnologies.  Here is a short summary of his talk at CHINANO 2013.

"Switzerland is considered the pioneer of nanotechnology and belongs to the most innovative countries worldwide in the field of nanotechnology. It started in 1981, as Heinrich Rohrer invented the scanning tunneling microscope (STM) at Zurich lake, which became the key instrument to open the door to the world of nanotechnology.  

Switzerland has recognized the importance and commercial potential of nanotechnology early on. Many Swiss companies have developed their expertise in nanotechnology and achieved commercial success.  Scheoller Textil AG uses nano-based finishing to develop intelligent textile products, which allow dirt and water to simply run off the surface. The ETH startup Nanograde produces customized nanoparticles. In addition, large pharmaceutical companies such as Novartis and Roche in Basel area are the leading force in nanomedicine.

A lot of cooperation between industrial partners and universities accelerate the Swiss innovation in nanotechnology. One is the Nano-Tera initiative. Nano-Tera aims to bring Switzerland to the forefront of a new technological revolution: using engineering and information technology to improve health and security, and to broaden our management of energy and the environment. Nano-Tera has achieved outstanding results in the areas of biosensing, design of medical implants and diagnosis tools, and monitoring systems for the environment.  Several Chinese universities are also involved in this program: Peking University, University of Science and Technology of China, etc."

Reported by Meijun Liu, Academic Intern, MSc. Micro and Nanosystems, ETH Zurich

Geneva signs strategic cooperation agreement with Beijing

Led by the President of the State Council, Charles Beer, a delegation of Geneva representatives visited Beijing to explore collaboration opportunities and to sign a strategic cooperation agreement with the Municipality of Beijing. Both sides were thrilled about the start of activities aimed at strengthening connections among the two cities / regions. The Geneva delegation consisted of 40+ business people represented a cross section of industries that are keen to increase their business with China: banking, trading, health services, accounting and legal services. Several leaders of economic development groups: Tourism, Trading industry, Wealth Management completed the group. Their programs featured presentations, networking and one-on-one meetings carefully prepared by the various organizers.

Left top (middle): Mr. Pascal Marmier, Executive Director swissnex China; right top: Mr. Jacques de Watteville, Ambassador of Switzerland; left bottom: Mr. Charles Beer, President of the Geneva State Council; right bottom: Ms. Hong Cheng，Vice mayor of Beijing

swissnex China, especially the Beijing team, was in charge of assisting the University of Geneva (represented by Mr. Mercier of HEC) and the Geneva University of Applied Sciences (HEG, School of Management represented by its Dean Ms. Maribaud). We organized for them various visits in the field of business and management, so that they could get a first hand experience about the China higher education system, and more importantly meet possible partner schools. We believe that this Geneva – Beijing cooperation would indeed be strongly enhanced by academic exchanges that would increase the flow of talents between the two cities!

Latest updates about the Swiss SME progress in the South China

Paradox Engineering

Paradox Engineering (PE) has designed and developed PE.AMI, a pioneering Smart City solution building an Internet of Things ready unified network communication platform allowing Cities to implement several advanced urban services and applications, such as Advanced Meter Reading, Lighting Management, Traffic Management, EV Chargers Management, and many more.

On 17th December 2012, Mr. Gianni Minetti turned to swissnex China, looking into the Smart City market in China. As time goes on, swissnex helped PE in Several meeting in Guangzhou, Shenzhen and Dongguan. PE found two trustful partners in the South, 1) Sino-Singapore Guangzhou Knowledge City (SSGKC) and 2) Research Institute of Tsinghua University in Shenzhen (RITS). MoUs were signed recently. In coming November, PE is invited to the 2013 China (Dongguan) International Science and Technology Cooperation Week.

In order to fertilize the progress in China, PE is looking for Chinese Engineer who has study experience in Switzerland. Based on the MoUs between SUPSI and the Chinese Universities, MSE Joint Master Program offers great Talent Pool and one student has already been interviewed by PE.

Fig: On behalf of Mr. Minetti--President of PE, Prof. Boer signed the MoU with SSGKC. 

Protoscar

LAMPO prototype is an electric super sports car developed by Protoscar. LAMPO3 is the most powerful full electric 2+2-seater in the world. It also is the first electric vehicle equipped with two different DC fast charging inlets. “LAMPO Ltd.” is ready to spinoff from parent company Protoscar, looking for the best matching partner.

In School of Engineering, Sun Yat-Sen University (SYSU), Top 10 University in China, an excellent team working on Battery Electrical Vehicle, who had already cooperation with University of Applied Science Lucerne, is trying to get in touch with Protoscar, seeking cooperation opportunities on LAMPO3. A feasibility study within SYSU internal in carried on.

Fig: Prof. Tan, SYSU, visited Protoscar in Switzerland, and drove Lompo2

Guangdong Zhengye Technological Liability Limited Company

Guangdong Zhengye Technological Liability Limited Company is a high and new-tech enterprise and is engaged in precision detection equipment and electronic materials, including X-ray, TDR impedance, hole checker.

Now they are in demand of small hole drilling in PCB, Laser water jet cutting in glass, PCB spray printing, 3D CT (tomography). Switzerland is well-known for technology innovation. Zhengzye turned to Swissness to find a link to Swiss precision manufacturing industry.

Furthermore, as a long terms strategy, in order to better communicate, understand, cooperate with Swiss, Zhengye send one young employee to SUPSI for year’s MSE study. Senior Engineers and managers are proposed to Switzerland for short term training.

Fig: In MSE China Module 2013, students visit Zhengye Ltd.

swissnex China participates workshop “ The interplay between Innovation and Law”

23, August - swissnex China joins an invitation-only workshop to share insights and explore the development of an analytical framework on innovation and law for future reference.  The workshop members are from diversified background with a cross-cultural and multidisciplinary perspective, interacting and building upon case studies, use cases, and examples from around the world.  During the morning discussion, audience have different definitions on innovation and the progress, imitation is a buzz word frequently quoted to harshly compare with innovation, which mirrors the current status in Chinese market and leads to a hot discussion on variables between china , US and European from culture, economic, legal infrastructure aspects.  In the afternoon session, audience debate the pros and cons of law with the impact on innovation,  whether law infrastructure fuels or constrains the progress of innovation. It concludes that law system in china requires an improvement and transform to a stimulator of innovation.

The workshop has reached a success and might also lead to a follow-up meeting in form of symposium or conference with expanding audience.