Mobilize Core Technologies to Cultivate Diamond Enterprises
The Party Central Committee and the State Council held ‘national science and technology conference’ in early 2006. The meeting explicitly stated that China would take about 15 years to turn itself into an innovative country and one of the major measures in this respect was to establish a technological innovation system that would be corporate-based and market-oriented and would combine industry with university and research. Then how to build such a system in the fastest possible way? Tsinghua Science Park has explored a Chinese-style road for independent innovation by observing the four principles of assembling, polymerization, focusing and fusion and by combining industry with university and research.
Tsinghua University worked out a plan in 1993 for building Tsinghua Science Park. It was part of the university’s general goal of becoming a world-class institution of higher learning. The plan was formally put into operation in the following year. As a result of construction and development over the past 10 years or so, Tsinghua Science Park has become a place among all science parks across the country, where construction has been the fastest, the occupancy rate has been the highest, the quality of park-based enterprises has been the best, and the service system has been the soundest. In short, the park has demonstrated strong international competitiveness. In May 2001, the park was cited by the Ministry of Science and Technology and the Ministry of Education as one of the country’s first national university science parks. In October 2003, the park was recognized as the only Class A national university science park. Currently, the park has developed a culture that encourages innovation and business creation, created an environment conducive to innovation and business creation, and become a cluster of corporate incubators, a cluster of R&D institutions and a cluster of institutions rendering intermediary and supporting services. In the near future, the park will complete the fusion of becoming China’s high-tech enterprise possessing core technologies, by upholding the four principles of assembling, polymerization, focusing and fusion and by implementing the “diamond-enterprises plan”. Our goal is that when Tsinghua University becomes a world-class university in 2011, Tsinghua Science Park will also become a world-class science park.
‘Assembling’. After 13 years of development, the 25-hectare park has assembled all factors such as space, enterprises, technologies and personnel for innovation.
First is spatial assembling. Located at the southeast corner of Tsinghua University, the 690,000-square-meter park has completed its construction. It is a cluster of more than 20 buildings. While they are predominantly office buildings, they also include facilities for conference, club, accommodation, catering, shopping and recreation. At the same time, the park has ample space for sharing and exchanges. In short, it has formed an excellent spatial assembling.
Next is the assembling of first-rate enterprises lured by the first-rate spatial environment. The enterprises that have moved into the park can be roughly classified into four categories. The first category comprises the Tsinghua-held high-tech enterprises such as Tsinghua Tongfang, Tsinghua Unisplendour and Tsinghua Chengzhi and the national research institutions such as the national engineering centers for networks and compact discs. The second comprises the R&D institutions of SUN, NEC, Schlumberger, P&G, Google and Microsoft and the NASDAQ-listed companies such as Sohu, Juniper and Broadcom. The third comprises the fast-growing enterprises devoted to innovation and business creation. The fourth comprises banks, accounting firms, law firms, venture investment companies and other intermediary institutions. The main players in the park, which are also the sources of proprietary intellectual properties, are the innovation and business creation enterprises that have potentials to become world leaders in their respective fields. At present, about 200 of over 400 enterprises in the park are engaged in innovation and business creation. Some of these enterprises are engaged in primary business creation: turning advanced technological concepts and experimental results into products. Some other enterprises are grown ones, engaged in secondary business creation: pursuing industrialization and commercialization.
Third is the assembling of high-quality enterprises, which can bring forth an assembly of core technologies. Of the 200-plus business creation enterprises in the park, at least over 100 possess world-class proprietary core technologies. In the future, they will play important roles in digital television, 3G communications, IC designs and system chips.
Last is the assembling of human resources. High-quality human resources are fundamental to innovation. The park today not only boasts of the first-rate managers of the world top 500 enterprises and NASDAQ-listed companies, but also assembles large numbers of corporate leaders who control advanced core technologies, possess advanced management expertise and are highly innovative and enterprising. The assembly of these elites has visibly heightened the overall quality of the human resources assembled in the park. Meanwhile, the park also has close links with other institutions such as TEEC and AAMA.
‘Polymerization’. If assembling is a physical change, polymerization is a chemical change. The innovation service system and the innovation service platform built by the park have facilitated the exchange and interaction between park-based enterprises and university resources, between enterprises, between enterprises and government resources and between enterprises and intermediary institutions. As a result, both these enterprises and resources have benefited from each other and developed together. The park’s “polymerization” roles are mainly manifested in the following areas.
The university and the enterprises have tremendous potentials to complement each other and interact with each other. On the one hand, the university and the enterprises have different goals and mechanisms and therefore can complement each other with their respective strength. The university’s goal is to educate people, develop curricula and pursue academic results, while the enterprises emphasize products and markets. For this reason, the two sides can help each other to overcome their respective shortcomings and get twice the result with half the effort if they cooperate. On the other, the university and the enterprises can not only complement each other and interact with each other through cooperation, thus maximizing the strength of both sides.
The university and the enterprises can cooperate at roughly three levels. The first is the cooperation at the most elementary level. The enterprises can take advantage of the university’s human resources (such as professors and doctors) and allow them to participate in corporate work and promote corporate development. At the second level, the enterprises can entrust their R&D projects, which they themselves cannot accomplish due to the constraints in technology, equipment and other factors, to the university for scientific research or joint development. The third is the cooperation at the highest level. The university and the enterprises can jointly run engineering research centers and promote research result conversion. The park today boasts of some world-rate proprietary core technologies. The enterprises possessing these core technologies emphasize cooperation with the university, with many of them having established joint research centers or laboratories. On the one hand, these “centers” can not only take advantage of the university’s integral strength for research work but can also receive more government support and win greater market recognition. Therefore, their R&D processes are much faster. These are indispensable factors for promoting the development of core technologies in China. On the other, these “centers” can also take advantage of their own world advanced technologies and world-class human resources to promote the university’s curricula development. This is a mode formed in the park, which combines production with teaching and research and ensures win-win results for both the university and the enterprises in the process of independent innovation.
For example, Tsinghua Tongfang Legend Silicon Tech Company, a park-based enterprise, has cooperated with the university in establishing the Tsinghua University Digital Television Transmission Technology R&D Center. The center has independently developed the entirely proprietary ground digital television transmission standard (DMB-T), which has become China’s national standard. This success is attributable to the combination of world advanced technologies and concepts with the university. This combination has promoted the win-win interaction between the enterprise and the university, pushed forward the curricula development of the university, and heightened the industrial strength of the enterprises. In the first half of this year, Sohu and the university jointly established the Tsinghua-Sohu Search Technology Laboratory, which represents a perfect interpretation of the interaction mechanism that combines production with teaching and research. As a leader in China’s Internet industry, Sohu enjoys advantage in Internet technology and resources and can provide strong support for the university’s R&D efforts. On the other hand, the university enjoys advantage in the basic research of computer science and can further reinforce Sohu’s technological competitiveness. The alliance between the two will inevitably produce a tremendous impact on the technological advance and overall development of China’s Internet industry.
Next is the polymerization of enterprises. The park has built a platform to provide exchange opportunities for creating an “innovation field” and promoting cooperation between enterprises. The so-called “field” is an invisible material being, where all matters interact with each other. Each matter in the field, subject to the action from diverse directions and in different degrees of intensity, can eventually grow up and assemble and release its energy. As a result, the potential energy of the field as a whole will change in step with the change of the matters in the field and the change of the mode of interaction. The park-based enterprises can self-organize in the ‘field’. Influenced by various acting forces in the park, these enterprises can form industrial concentration and upstream-downstream cooperation in a market environment through industrial associations and other organizations. Today, most of the core technologies gathered in the park are in the IT sector, where industrial chains have been formed among enterprises. At present, the park has been doing remarkably well in this respect and the enterprises have begun forming closely-linked industrial clusters.
Third is the polymerization of government resources. For long, the park has actively fostered links and cooperation with government and attracted government resources into the park. Taking advantage of being close to enterprises, the park has assisted government departments in formulating relevant industrial policies and provided feedback on policy implementation. The park has established a general information service website to provide the information about the policies and activities of the governments at all levels. In addition, the park has provided enterprises with various services, including policy information, consulting on science fund application, high-tech enterprise certification and annual inspection, and has actively implemented various preferential policies of the State. It has also held promotional conferences on innovation fund application and publicity meetings on investment channels so as to encourage direct exchanges between government departments and park-based enterprises.
Fourth, the inspiration the park has drawn from its development is that corporate development not only requires the intervention of government, university, capital, technology and other resources but also the operation by professional intermediary institutions. As the intermediary market in China today is incomplete, it is especially important to establish a technological innovation system that is corporate-based and market-oriented and combines the strength of government, industry, school, research, capital and intermediary. To most small and medium-sized enterprises, they find it very hard to boost their competitiveness because they do not have the capacity to become the main force in technological innovation. We also see that some enterprises are staying where they are after developing to a certain stage. When an enterprise grows to a certain stage or encounters a bottleneck, it must take advantage of the strength of intermediary institutions. Through acquisition or restructuring, several small enterprises can bundle together and form a medium-sized enterprise and several medium-sized enterprises can merge into a large enterprise. This is the polymerization effect.
In the technological innovation system, the university’s science park is a strong bond, which can assemble the competitive resources of government, industry, school, research, capital and intermediary and help the enterprises become the leading players in technological innovation with the support of professional services. This will shorten the process of corporate growth.
‘Focusing’. The park introduced a ‘diamond-enterprises plan’ in 2006 for integrating the resources from universities, governments, enterprises, markets and intermediary institutions so that they can focus on key enterprises in key industries in the park and give them full support and help. The goal is to cultivate world-class diamond enterprises.
In September 2006, the plan was formally launched in the park. In the next five years, the park would pick up 20 ‘semi-diamond’ enterprises from hundreds of park-based enterprises. On the basis of the general services provided by the park’s general service platform, the ‘diamond-enterprises plan’ will provide the most preferential policy treatment and resources to the selected enterprises. In particular, the park would pick 10 enterprises from the 20 for priority support and cultivation and will focus competitive resources including capital, policy, personnel and service on them. Hopefully, they will come to the fore in three to five years and become true ‘diamond enterprises’. After repeated reviews and inspections, the first 10 enterprises have been included into the ‘diamond-enterprises plan’.
‘Fusion’. To the park, assembling, polymerization and focusing are only processes and methods. The final result should be the realization of a qualitative leap like the nuclear fusion in regional innovation through the assembling of university, enterprise, technology, personnel and resources, the polymerization between various innovators and factors and the focusing on key enterprises in key industries. The goal is to realize corporate fusion through the assembly of enterprises, technologies, personnel and resources and the polymerization of various innovators and factors.
The park began to build corporate incubators in 1999 and to establish a comprehensive innovation service system in 2003. By the year 2011 when Tsinghua University celebrates its 100th birthday, the park will boast of a batch of diamond enterprises, which will play decisive roles in the world, as a result of assembling, polymerization and focusing and the execution of the “diamond-enterprises plan”. The park defines the “diamond enterprise” in the following ways. First, the enterprise must have a strong and sustainable capacity for independent innovation and have entirely proprietary intellectual properties in the fields of its technologies and products. Second, the products and technologies the enterprises have developed must have good and huge market and at the same time must be strategically important to the state and help boost the country’s technological strength. Third, the enterprise must be a leader in the same industry. Fourth, the enterprise must emphasize combination of production with teaching and research and make major contributions to the university’s research result conversion and curricula development. Fifth, the enterprise must grow fast and its returns to investors must be high.
In the course of building China’s national innovation system, the university science parks across the country play an extremely important role in improving the national innovation system and in building an innovative country. Tsinghua Science Park has been playing pioneer and model roles in this process. By relying on Tsinghua University, the park assembles a large number of business creation enterprises that possess the core technologies with propriety intellectual properties. As a result of government support, cooperation with the university, interaction between enterprises and services from intermediary institutions, the park has become an innovation field, where these enterprises have been growing rapidly. With the help of this innovation field, the park will cultivate ‘diamond enterprises’ and contribute to the building of an innovative country.