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China Frontier Research. GLORAD Research Center for Global R&D Management Overview Prof. Dr. Max von Zedtwitz GLORAD (B-55) School of Economics and Management Tsinghua University, Beijing max@post.harvard.edu / www.glorad.org. 1. Tsinghua University. Established in 1911
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China Frontier Research GLORAD Research Center for Global R&D Management Overview Prof. Dr. Max von Zedtwitz GLORAD (B-55) School of Economics and Management Tsinghua University, Beijing max@post.harvard.edu / www.glorad.org 1
Tsinghua University • 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) 2
Tsinghua – School of Economics and Management • 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 3
GLORAD within the Academic Hierarchy Tsinghua Univ. ofSt. Gallen School ofEcon & Mgmt School ofMgmt Dept ofTech. Econ. Institute ofTech Mgmt Dept. for Tech. Innov. RC ofTech. Innov. GLORAD TECTEM - Transfer Centerfor Technology Management • 12 people • Focus on innovations research, R&D consulting, training • 17+ people • Focus on global R&D management research www.glorad.org 4
Max von Zedtwitz – Professional Background 1989 - 1994: Computer Science & Engineering Siemens (USA) / NTT-ATR (Japan) / ETH (Switz.) Nucleonics simulation research, algorithm design,MIS development, etc. 1994 - 1998: Research Associate ITEM (St. Gallen, Switzerland) Innovation & technology management 1998 - 2000: Post-Doctoral Fellow Harvard (Boston, USA) International innovation & start-up management 2000 - 2003: Prof. of Technology Management IMD (Lausanne, Switzerland) Tech-based entrepreneurship & innovation Since 2003: Prof. of Technology & Innov. Management Tsinghua University (Beijing, PR China) Director of GLOR&D + Exed/PhD programs + AsiaCompete SM 1-5
China Frontier Research China Realities from a Frontier Research Perspective Prof. Dr. Max von Zedtwitz GLORAD (B-55) School of Economics and Management Tsinghua University, Beijing max@post.harvard.edu / www.glorad.org 6
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)
In China, Number of Graduate Students is Increasing Fast 350000 300000 53300 250000 48700 200000 PhD 38300 Master 150000 32100 273000 25100 220200 100000 19900 164300 133100 14962 103400 50000 72300 57546 0 1998 1999 2000 2001 2002 2003 2004
Relative Share of Graduates from Different Faculties Philosophy Economics Sciences Engineering The last slide was: 0600
Financial Support of Top Universities in China The last slide was: 0600
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 Other Other OECD SKo 5% 4% 3% Other EU 10% U.S. 38% UK 4% 5% Fr 7% 9% Ge 15% PRC Japan Ref: AAAS, Wash. DC, 2005
Ten Technologies to Watch in China Field • Technology • Next-generation mobile telecommunication (beyond 3G) • Next-generation networks • Nanometer chips (targeting 12” 90/65nm chips) • Chinese information processing • Functional genomics • Medical biotechnology • Bioinformatics • Functional proteomics • Technology for breeding new trans-gene farm crops • Nanomaterials and nanotechnologies Information & telecommunication Life sciences and biotechnology New materials 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 • 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 A necessary (for some) but painful process!
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