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An investigation into the Chinese

nanotechnology communities in

Shanghai and Suzhou Industrial Park

Can China Become a

Nano Innovator?

Matthew GebbieMaterials Science

Shirley Han

Ecology, Evolution and Marine BiologyGalen StockingPolitical Science

This material is based upon work supported by the National Science Foundation under Grant No. SES 0531184. Any opinions, findings, and

conclusions or recommendations expressed in this material are those of the author and do not necessarily reflect the views of the NationalScience Foundation. It was conducted under the auspices of the UCSBs Center for Nanotechnology in Society (www.cns.ucsb.edu)

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Agenda

Methods

Overview of Government Policies

Cultural and Social Challenges

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Previous Trips 2003, 2007, 2010

Visited Beijing, Shanghai, SIP

Met with innovators at early stage of Chinese nano innovation

2012 Trip April 16-29, 2012

Visited Shanghai and SIP

Met with a variety of innovators:

Entrepreneurs

University professors SIP administrators

Scientists

Investigated corporate and social culture, state of innovation, funding levels,

government role

Methodology

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Suzhou Industrial Park: 100 sq miles

1,000 high-tech companies

2010 output = $22 billion

Nanopolis: 150+ Nanotech startups 18 universities with 70k students

28k nanotech scientists

10 research institutions

148 Fortune 500 companies

Suzhou Industrial Park

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China in Transition

From the worlds factory to the worldsinnovator

Huge middle class = huge market potential

Brand image problems

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Chinese approach

Characteristics: Strong role for government

Often attempts to stimulate market

mechanisms Seeks to overcome cultural norms and

business practices that hinder growth

Has implemented amultiple, and often

contradictory strategy

China seeks to cultivatelong term growth and

indigenous innovation

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Governmental Programs

MLP, 12th Five Year Plan

Regional strategies andcompetition

Grants and directedmanufacturing

Regional economic zones

Government sponsored VCcompanies

blogs.wsj.com

Goal is to become an innovation-oriented society by 2020 byleapfrogging development through indigenous innovation

(zizhu chuangxin)

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Weak Human Resources,

Reliance on Returnees

Comparatively fewer

field-leading experts Returnees do not

want to return

Best and brighteststudents go abroad

-Small business owner/entrepreneur -

April 2012

People would rather stay in the

United States if given the choice,

but with current economic

conditions and decreased funding

opportunities, increased numbers

of Chinese nationals are deciding togo back to China

http://www.businessweek.com

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Strong Infrastructure

Strong central planning andinvestment

Extensive construction

Significant expenditures to

obtain R&D-related capital

--Professor, CAS, SINANO April 2012

Everything is going toofast[references the size of

constructed and planned Sinano

buildings]this is unnecessary

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Business Culture

Guanxiculture Focus on non-business

related activities

Potentially detrimentalbusiness social norms

Often linked tocorruption, bribery,and a lack of ethics

One must spend a lot of timeon guanxiguanxican facilitate

the progress of a company but it

is a necessary evil to do business

in China because it is extremely

hardphysically to take people

out and be forced to drink, togive face

Small business owner/

entrepreneur - April 2012

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State-funded VC

Young, idealistic investors

genuine interest in China

Long term investments

sustainable growth

Weak IP and legal

protections

Guanxiconnections to ensure

investments

Weak contracts

Unsophisticated business law

VCVC Culture

Government-backed VC funds

are an important tool for

promoting high-tech

development

-- Chinese VC investorApril 2012

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Research and Academic Culture

Project 985 and211

World class leveluniversities

Reward system forpublications Low-quality

publications

Plagiarism

--Chinese Professors - April 2012

The pressure is on the young faculty to

produce research and papers.

There is much pressure to publish and

patent. I work 15 hours a dayuntil 11 at

night7 days a week since I started.

http://funsom.suda.edu.cn/

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Educational Culture

History Dates back to 600AD

Imperial civil serviceexaminations

Lack of creativity andoriginality in students

Rote memorization Lack of questioning

authority

--Chinese Professor - April 2012

Experimental colleges show that the

central government recognizes [the lack

of creativity in Chinese students as a]

problem, but maybe is not willing to

actually enact educational reform.

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Can China Become a

Nano Innovator?

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Can China Become a

Nano Innovator? Not a high quality innovator yet but could be

Preliminary evidence shows that the government is trying, but

inconclusive on their success

Will need to overcome substantial barriers:

CultureBusiness practices and corruption

Legal practices

Contradictory policies

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Thank you!

!Dank!

Questions?

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Innovation Factors

Investment in long-termresearch

Educated workforce

Quality research Environment of

innovation:

Low corruption Innovative cultural norms

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Medium to Long-Term Plan (MLP)& 12th Five Year Plan (2011-2015)

Innovation as centerpiece of economic strategy Innovation-oriented society

from made in China to designed in China 7 strategic emerging enterprises (SEIs)

include biotech, new materials (nanotech)

shift to consumption-led growth: lessdependent on state infrastructure investment;increase consumption (now 35% GDP) viahealth care, pension, housing spending

green development: reduce carbon emissionsas per unit GDP by 17%

industrial upgrading through re-innovationof foreign technology

catch up to US in terms of % GDP invested inresearch

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Regional Strategies

Central govt granted regionsconsiderable economic authority

Cities and provinces established

quasi-governmental agencies tobolster local nano business They also try to lure businesses

away from other cities withsubsidies

Still, central govt keeps a tightreign on activity Penalties

Appointments

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Grants and Directed work

Considerable grant subsidies 10M RMB tobillions

Govt list of desired products and research

--Small business owner/

Entrepreneur

April 2012

--Small business owner/

Entrepreneur April 2012

Companies that

get government

funding arent

hungry

Commissions dont

develop

companies

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Economic Zones

Regional economic zones likeSuzhou Industrial Parkcombine government,universities, entrepreneurs,

and MNCs Incubators within the region

offer additional subsidiesgrants, rent and employeesubsidies

Use competitive award process Also conduct workshops,

coordinate collaboration

Still, often supports shortterm growth over long term

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