china frontier research

© Max von Zedtwitz, [email protected]

China Frontier Research

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GLORADResearch Center for Global R&D Management

Overview

Prof. Dr. Max von ZedtwitzGLORAD (B-55)

School of Economics and ManagementTsinghua University, Beijing

[email protected] / www.glorad.org


Tsinghua University

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• Established in 1911

• One Nobel prize winner (C.N. Yang) and one Turing Award winner (C.C. Yao)

• 900 full professors• 1’200 associate professors• 24 CAS and 24 CAE members

• 11 schools, 44 departments

• 20’000+ students• 12’000 undergraduate• 6’200 masters• 2’800 doctoral

• Sciences• Architecture• Civil engineering• Mechanical engineering• Information sciences• Humanities and social sciences• Economics and management• Law• Arts and design• Public policy• Applied technology• (Medicine)

• Sciences• Architecture• Civil engineering• Mechanical engineering• Information sciences• Humanities and social sciences• Economics and management• Law• Arts and design• Public policy• Applied technology• (Medicine)


Tsinghua – School of Economics and Management

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• Founded in 1984 (founding dean: Zhu Rongji)

• Top ranked in China among Chinese MBA and business schools

• About 120 full-time faculty

• 5 doctoral programs

• 9 Masters programs• MBA / EMBA, etc.

• Fees: MBA 90-120’000 RMB

• 40+ Int’l exchange programs• Incr. number of int’l students

2450 MBA Students:• 300 Int’l MBA (with MIT)• 400 Full-time MBA• 500 Part-time MBA• 150 Acct MBA• 700 Spring MBA

2450 MBA Students:• 300 Int’l MBA (with MIT)• 400 Full-time MBA• 500 Part-time MBA• 150 Acct MBA• 700 Spring MBA


GLORAD within the Academic Hierarchy

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TsinghuaTsinghua

School ofEcon & Mgmt

School ofEcon & Mgmt

Dept ofTech. Econ.

Dept ofTech. Econ.

RC ofTech. Innov.

RC ofTech. Innov.

Univ. ofSt. GallenUniv. of

St. Gallen

School ofMgmt

School ofMgmt

Institute ofTech Mgmt

Institute ofTech Mgmt

Dept. forTech. Innov.

Dept. forTech. Innov.

GLORADGLORAD

www.glorad.org

TECTEM - Transfer Centerfor Technology Management

• 12 people• Focus on innovations

research, R&D consulting, training

• 17+ people• Focus on global R&D

management research


Max von Zedtwitz – Professional Background

Since 2003: Prof. of Technology & Innov. ManagementTsinghua University (Beijing, PR China)Director of GLOR&D + Exed/PhD programs + AsiaCompete

2000 - 2003: Prof. of Technology ManagementIMD (Lausanne, Switzerland)Tech-based entrepreneurship & innovation

1998 - 2000: Post-Doctoral FellowHarvard (Boston, USA)International innovation & start-up management

1994 - 1998: Research AssociateITEM (St. Gallen, Switzerland)Innovation & technology management

1989 - 1994: Computer Science & EngineeringSiemens (USA) / NTT-ATR (Japan) / ETH (Switz.)Nucleonics simulation research, algorithm design,MIS development, etc.

SM 1-5


China Frontier Research

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China Realities from a Frontier Research Perspective

Prof. Dr. Max von ZedtwitzGLORAD (B-55)

School of Economics and ManagementTsinghua University, Beijing

[email protected] / www.glorad.org


Key Question: Is China Going to be a SOURCE of Innovation?

Traditional View

• China imports technology from Western companies in return for market access.

• Chinese companies copy, don’t invent.• Chinese companies either receive gov’t protection or innovate using

copied Western business models.

Putting this View into Perspective

• Imitation is a natural (necessary?) step before innovation:• Japan, Korea, USA, Switzerland as examples• Artists/students, too, learn how to copy “the masters”…

• “Western” is really a base of about 20 different contributing countries: China can become a top-5 player by gaining just a 10% “market share” in innovations.


Chinese Innovations in Retrospective

China

1045 Printing / movable type

800 Gunpowder (also used for military applications)

300 Compass developed

100 bc Paper invented in Gansu Province

128 Seismoscope invented by Chang Heng

Elsewhere

1455 Gutenberg’s printing press

1300 Gunpowder introduced to Europe

1150 Compass introduced to Europe

900 Paper introduced to Europe via Arabs

1800 Seimoscope reinvented in Europe


Chinese Academic Research – Some Examples

E.g., Structural Biology, Tsinghua University:

• Cloning of human liver related genes• Crystal structures of SARS Co Virus and MHV S protein fusion cores • Crystal structure of the mitochondrial respiratory membrane protein Complex II

E.g., CAS-SIMM:

• Artemether, a novel anti-malarial drug • Periaqueductal gray matter has been demonstrated to be the most effective site in the

whole nervous system for the abolition of pain by micro-injection of morphine • Sobuzoxan, an anti-tumor drug • Huperzine A (HupA), a novel alkaloid isolated from the Chinese medicinal herb, Huperzia

serrata , was found to be a potent, reversible and selective inhibitor of AChE, ie. It could improve memory deficiencies in aged population and patients with Alzheimer's disease

E.g., Center for Advanced Study, Tsinghua University:

• Chi-Chih Yao, Winner of the Turing Award, Computational Complexity and Algorithms


Chinese Inventions: Brain-Machine-Interfaces

Where: Tsinghua Institute of Neural Engineering at the Tsinghua School of Medicine

When: Spring 2006

What: Linking brain activity to a computer, thus interfacing with electronic/mechanical devices

Demonstrated Applications:

• Control a robot dog to kick a ball

Anticipated Applications:

• Controlling artificial limbs• Steering wheelchairs• Surfing the internet by mind control• Guiding remote assistants (e.g., for

rescue)


Chemistry Patent Applications are Rising Fast in China


In China, Number of Graduate Students is Increasing Fast

57546 72300103400

133100164300

220200

273000

1496219900

25100

32100

38300

48700

53300

0

50000

100000

150000

200000

250000

300000

350000

1998 1999 2000 2001 2002 2003 2004

PhD

Master


Relative Share of Graduates from Different Faculties

0600The last slide was:

PhilosophyEconomics

EngineeringSciences


Financial Support of Top Universities in China

0600The last slide was:


Insights in Chinese Academic R&D Collaborations

• China is a fast developing R&D site Chinese universities are developing fast, too

• Academic research is mainly coming from basic research, but applied research is growing fast

• Front end research subjects (competing with western groups)

• Highly motivated students; eager to learn, large research groups

• Partly old equipment (but highly inventive proceedings)

• Work hours: around the clock

• 60% of the students who leave the university try to go abroad; 20% apply for a job in industry; 20% stay at the university

• Industrial research is conducted mainly at universities less experience in scale-up of processes (changing)

• Universities and industrial companies often have the same staff (smaller companies use students as “scientists”)


“Chinese R&D Engineers are Not Creative”

TRUE:• Chinese education system and culture does not encourage

individualistic expression and creativity

FALSE:• Chinese people are inherently less creative (counter example: see

overseas Chinese scientists and scholars)

What to Do:• Create a distinctly foreign/int’l environment where Chinese engineers

can behave differently• Have Chinese overseas returnees serve as leading examples• Sensitize yourself to Chinese expressions of creativity and manage

and reward accordingly


Global R&D Spending: China Moves to #3 (in PPP)

Total world R&D=

US$ 764bn (2004) in PPP

U.S.

JapanPRC

Ge

Fr

UK

OtherEU

SKo

OtherOECD

Other

38%

15%

7%

5%

4%

10%

3%

4%5%

Ref: AAAS, Wash. DC, 2005

9%


Ten Technologies to Watch in China

Field

Information & telecommunication

Life sciences and biotechnology

New materials

Technology

1. Next-generation mobile telecommunication (beyond 3G)2. Next-generation networks3. Nanometer chips (targeting 12” 90/65nm chips)4. Chinese information processing

5. Functional genomics6. Medical biotechnology7. Bioinformatics8. Functional proteomics9. Technology for breeding new trans-gene farm crops

10. Nanomaterials and nanotechnologies

Ref: Rand Corp (2005): Strategic Choices in S&T: Korea in an Era of Rising China


Chinese Industrial R&D and Innovation

E.g., Huawei:

• 14,500 employees, >10% of revenue dedicated to R&D, >40% of employees in R&D• CMM5 certification – the highest accreditation available• Member of 60 international standardization organizations• E.g. ITU-T, 3GPP2, ETSI, OIF, RPR, OMA, TIA, TMF…• Filed over 6500 patent applications by end of 2004• Granted over 1400 patents to date

E.g., CNPC:

• CNPC invested 4200M RMB in R&D in 2004 • CNPC has three hundred R&D institutes in China, including 7 institutes directly under HQ,

65 under the secondary companies, about 250 secondary branches R&D centre.• 81 major research projects, including 15 national key ones and 66 company ones• 594 patents were awarded

Others: ZTE, Haier, TCL, Lenovo, Dongfang Motors, Hisense, Li-Ning, Founder, etc.


Chinese Inventions: TD-SCDMA

• TD-SCDMA = Time Division-Synchronous Code Division Multiple Access

• 3G mobile telecommunications standard

• Pursued by the Chinese Academy of Telecommunications Technology(CATT), Datang and Siemens AG, in an attempt to develop home-grown technology and not be "dependent on Western technology“.

• Siemens also in a JV with Huawei (for marketing and manufacturing).

• On January 20, 2006, Ministry of Information Industry of the People's Republic of China formally announced that TD-SCDMA is the country's standard of 3G mobile telecommunication.

• TD-SCDMA 3G phones are expected to become available at the endof 2006 and other 3G networks will be delayed until TD-SCDMA is ready.

• More flexible, less costly, greater spectrum efficient, lower powerconsumption than W-CDMA…


China’s Domestic R&D: Why Internationalize…?

Why a Chinese firm would internationalize R&D:

• Local technology and market intelligence• Hiring foreign experts• Developing a global image• Supporting local sales

A necessary (for some) but painful process!

Example Haier:

• #5 white-goods company worldwide• Competes and cooperates with companies like Siemens,

Whirlpool, GE• R&D in Qingdao, Beijing, Guizhou• R&D in Hong Kong (now PRC), London, Silicon Valley, Sydney


Implications for R&D from China

• Chinese companies are about to set up R&D in hot spots around the world

• Boston, Silicon Valley, Japan, UK, Germany• But also India, South America, Korea, Western Asia, etc.

• Chinese companies are facing steep learning challenges with respect to doing R&D, and managing international organizations: Centralized R&D configurations and hubs are to be expected

• The Chinese have a tremendous willpower to adopt foreign technologies and demonstrated that they can do so fast

• If the technology doesn’t come to China easily, local R&D centers can source technology where it is created, and secure global ownership rights

• Chinese companies will compete over top graduates from Western universities

china frontier research

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