China’s innovation challenge

CNC reporting from Beijing
Added On June 4, 2013

China has put innovation as a key driver of its economy, along with urbanisation and consumption.

But after decades of relying on low cost exports, China's technological transformation faces many challenges...

From inspiring entrepreneurs in a culture where startups are often marginalised...

To protecting intellectual property rights.

Today we'll have the latter half of the special report by Grace Brown on China's innovation challenge.

The Merriam-webster dictionary defines innovation as a new idea, method or device.

INSERT STANDUP - GRACE AT CHINICT (outside)"But there are challanges to China's innovation-led growth. Some say it simply translates ideas that already exist."

Indeed, China has many 'equivalents' of western counterparts.

The country's biggest microblogging platform, Weibo, is one of them.

With its hundreds of millions of citizen commentators, it's influence and information-dessimination power is often compared to Twitter.

Then there's Taobao, the country's biggest online shopping platform, which is often labelled 'China's Amazon'...

And youku-Tudou, the online video sharing website, known as China's answer to youtube.

The CHINICT Tech Conference is one of the biggest in China. It aims to dispell those beliefs, bringing tech entrepreneurs and investors together.

Franck Nazikian, Founder of the conference, says accussations of copying, are simply due to a lack of understanding.

SOT Franck Nazikian, CHINICT Tech Conference, Founder (on translation ignorance, why Weibo is better than Twitter, Taobao than Alibaba etc)...

Richard Robinson, one of the speakers at the event, says China's technological innovations could already compete with America's...

(On Beijing's Next Sillicon Valley & Ecosystem  1m03s)
"Beijing is unquestionably the next Sillicon Valley, not only for China, but Asia. ... Ecosystem, you can meet the co-founders... "

Even if original ideas are introduced, protecting them - is another matter...

As a result, intellectual property concerns are another major hurdle for Chinese entrepreneurs hoping to protect and monetise their ideas...

Last year, the Commissioner of the State Intellectual Property Office, Tian Lipu, reported China's patent applications for new inventions, grew 20 percent.

But despite more inventions, courts in China also saw 44 percent more intellectual property rights cases last year than the year before - in more than 83,800 lawsuits.

However, some say this shows increased awareness and protection of IPR in China.

SOUNDBITE (CHINESE) LAETICIA-FRITZ LAURENS, Embassy of France in China Mission Economique
"The one challange is IPR... but it is getting better..."

Others say a lack of protection, forces Chinese tech firms to innovate faster.

(On Interllectual Property protection 18s)
"IP protection is not as good outside China as some people would have you to believe "

Attracting foreign investment is also a challange.

(On foreign investment on Chinese enterprenures  45s)
"It is very hard for an outsider to invest directly in China, and to understand the ... of China's .......
Innovations from China are leap out of China, as well as external innovation goes into the country."

Once an idea is developed and monetised, exit strategies are also crucial.

SOT Franck Nazikian, CHINICT Tech Conference, Founder (On Exit straetgies - near end of interview - how acquisitions are not common enough but will grow)

SOT Sebastian De Halleux, Playfish Co-Founder ("I think the challange though is the distribution platform... Tencent has mentioned they understand the need to nurture the eco-system, and that's a new notion in China that seems to be making headway, which is very encouraging for young entreprenuers."

In his report to the Communist Party of China's 18th National People's Congress, the then-President, Hu Jintao, said technology should be a key driver in China's growth, in the decade ahead.

And said the state should increase market players motivation "for pursuing innovation-driven development... by scientific and technological progress."

The need for technology-led growth has been reiterated by China's new President, Xi Jinping.

Over the past three decades, China has proven its ability to transform itself...In an industrial revolution, and an economic one.

Since China opened to the outside world in 1978, it's economy doubled in size every eight years, to become the world's second-largest.

According to Euromonitor estimates, China will overtake America as the world's-largest economy, by 2017...

But quantity of growth, has undermined quality.

98 million people in China's countryside still live in poverty - roughly one in every 13 citizens.

Industrial pollution has seeped into all aspects of life, from the air, to the water, to the soil.

Now, China is embarking upon a technological revolution...

One that is likely to lead to new breakthroughs not only in the value of its exports, but also in agriculture, the environment and other fields...

Which could offer a better life, to its 1.3 billion people.

Grace Brown, CNC World, Beijing.