With more start-ups and an­gel cap­i­tal emerg­ing in the coun­try last year, China’s in­no­va­tion drive looks to be bear­ing fruit and gain­ing trac­tion

China Daily (Canada) - - SHANGHAI - In Shang­hai


Shang­hai has in re­cent months be­come a sec­ond home for Xie Fayan, a Xi­a­men-based maker who fre­quently en­ters the city to at­tend ex­hi­bi­tions and show­case Guguji, a small por­ta­ble printer he cre­ated that can be used to print mes­sages and social media con­tent on mo­bile phones.

“It is al­ways ex­cit­ing to see many makers like my­self in Shang­hai who are bring­ing handy so­lu­tions to make life eas­ier,” said the 26-year-old at the re­cent 2016 Con­sumer Elec­tron­ics Show Asia (CES Asia) held in Shang­hai.

The event this year fea­tured more than 200 ex­hibitors from around the world.

“China’s push for in­no­va­tion and en­trepreneur­ship is now stronger than ever and this trend not only im­pacts Chi­nese in­vestors and con­sumers, but also ex­tends the coun­try’s in­flu­ence glob­ally. In­creas­ing num­bers of tech makers have been bring­ing their projects to China to seek in­vest­ments while Chi­nese prod­ucts of good qual­ity have also been mak­ing their way into the global mar­ket,” said Liu Chuan, a Shen­zhen-based an­a­lyst with Daoyuan Man­age­ment Con­sul­tancy Ltd.

Ac­cord­ing to data from the Na­tional Devel­op­ment and Re­form Com­mis­sion (NDRC) which was re­leased on May 20, the num­ber of makers and en­trepreneurs in China have been boom­ing in the past cou­ple of years.

In 2015, 14 mil­lion new en­ti­ties were reg­is­tered, rep­re­sent­ing a 14 per­cent year-onyear growth. Mean­while, some 558,000 univer­sity grad­u­ates and col­lege stu­dents had started their own busi­nesses, a 16.9 per­cent year-on-year in­crease.

An­gel funds in China had also surged sig­nif­i­cantly, ac­cord­ing to the NDRC re­port. In 2015, the com­bined an­gel funds in China reached 20.36 bil­lion yuan, three-fold the amount in 2014. By the end of 2015, China was home to about 3,000 ven­ture cap­i­tal funds and an­gel funds which had a com­bined cap­i­tal of more than one tril­lion yuan.

“A pro-en­trepreneur­ship pol­icy en­vi­ron­ment, the ris­ing num­bers of fund­ing op­por­tu­ni­ties and the al­lo­ca­tion of more social re­sources to en­cour­age in­no­va­tion are in line with the coun­try’s as­pi­ra­tions to trans­form its eco­nomic growth pat­terns and up­grade its man­u­fac­tur­ing and in­dus­trial sec­tors,” said Sun Weimin, chief of the in­for­ma­tion de­part­ment at the Min­istry of In­dus­try and In­for­ma­tion Tech­nol­ogy. Sun is also in charge of an an­nual maker con­test hosted by the min­istry.

Sun noted that an­other ma­jor fac­tor be­hind the growth of China’s in­no­va­tion sec­tor is the sup­port pro­vided to makers and en­trepreneurs by lo­cal gov­ern­ments and en­ter­prises. For in­stance, sev­eral funds have been set up to sup­port the in­no­va­tion drive and com­pre­hen­sive net­works have been es­tab­lished to help start-ups lo­cate in­vestors and in­cu­ba­tors. There are more than 20 in­cu­ba­tors and in­dus­trial zones in Shang­hai that cover a wide range of sec­tors, in­clud­ing robotics, nav­i­ga­tion and health­care.

“We have held two con­tests for makers in the past two years and some of the award­win­ning projects have been in­tro­duced to en­ter­prises which can take ad­van­tage of these innovative tech­nolo­gies. For ex­am­ple, a three-di­men­sional shoe-mak­ing project has been turned into a shoe­mak­ing en­ter­prise and will be head­ing into mass-pro­duc­tion, while an­other project that uti­lizes robotics to han­dle lo­gis­tic tasks has been pop­u­lar­ized in the lo­gis­tics sec­tor,” said Sun.

One of the new trends that makers have no­ticed is the shift in in­ter­est to­ward prod­ucts that are en­vi­ron­men­tally friendly. One such com­pany at CES Asia that fit­ted this mold is Sheedo, which cre­ates pa­per made from waste cot­ton. The unique thing about this prod­uct is that it also has seeds em­bed­ded in it — peo­ple can plant it in the ground af­ter us­age in­stead of dis­pos­ing it in a rub­bish bin.

“China is now be­com­ing more con­cerned about the en­vi­ron­ment and it’s time for Sheedo to grow here in Shang­hai. The busi­ness model is sim­ple to un­der­stand — it is about turn­ing raw ma­te­ri­als into valu­able and en­vi­ron­men­tally friendly prod­ucts such as busi­ness cards, fly­ers, coast­ers, chop­sticks hold­ers and many other things that can be made us­ing pa­per,” said Glo­ria Gu­bianas Blanes, the founder of the Barcelon­abased com­pany.

An­other no­table project at CES Asia this year was a body temper­a­ture mon­i­tor that looks like a band-aid. De­vel­oped by a Changzhoubased med­i­cal tech­nol­ogy en­ter­prise, the de­vice is pow­ered by pa­per bat­tery tech­nol­ogy and can mon­i­tor a per­son’s temper­a­ture up to 48 hours.

“It may be a small gad­get but there is great de­mand for such de­vices. In China alone, more than 800 mil­lion ther­mome­ters are pro­duced an­nu­ally,” said Xie Rui, the mar­ket­ing spe­cial­ist of the project.

In­dus­try ex­perts said that they ex­pect to see more makers work­ing in teams and lever­ag­ing each other’s ex­per­tise as the com­pe­ti­tion heats up in the in­no­va­tion scene. Xia Jun­feng, project man­ager with startup in­cu­ba­tor Nan­jing Maker Space, said that makers need to work with other par­ties if they want their prod­ucts to reach the com­mer­cial­iza­tion stage as quickly as pos­si­ble.

“It is un­likely for one in­di­vid­ual to han­dle all the tasks in­volved, such as prod­uct de­sign, mar­ket­ing, in­tel­lec­tual prop­erty rights pro­tec­tion and fundrais­ing, so makers will need to work in teams to be more ef­fi­cient and ef­fec­tive,” said Xia.

“The days of be­ing able to present an idea and se­cure easy fund­ing are gone. In­vestors today are very savvy and they de­mand easy-to-un­der­stand busi­ness mod­els as well as good de­signs. Very of­ten, makers will also need to take ad­van­tage of social media to ex­tend the reach of their projects.”

The days of be­ing able to present an idea and se­cure easy fund­ing are gone. In­vestors today are very savvy and they de­mand easy-to-un­der­stand busi­ness mod­els.” project man­ager with start-up in­cu­ba­tor Nan­jing Maker Space


A man tries out a vir­tual re­al­ity head­set at the 2016 CES Asia in Shang­hai. There were more than 200 ex­hibitors at this year's show.

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