Science and Technology Industry Has Become the New Development Engine for Tianjin Development Area
Source: View: 295 Date: 2015-06-15

The development mode simply driven by investment for regional development in China has quietly changed. According to the latest news from foreign Media, gathering innovation & entrepreneurship elements and building fertile soil for science & technology industry development have become new development paths for leading regions. Many international mainstream media including Reuters, Bloomberg News, the Dow Jones Market Watch, the Boston Globe Newspaper, Yahoo Finance, Canadian Digital Journal have reported this since the early period of June, 2015. The report content is as follows:

The investment mainly driven by FDI has always been important engine for development of some areas and industrial parks in China; however, the mode has quietly changed. The example of Tianjin Development Area can be widely referenced.

As the first batch of national development area, Tianjin Development Area (TEDA) that always keeps the first position in comprehensive assessment of national development area investment environment has been making prosperity of science & technology industry as more important driven power for long and continuous development.

"Continuous implementation of new investment of course brings new support for our whole development area”, said by Hongliang Li, general manager of Tianjin Development Area Science & Technology Group. He also said that “Science & Technology and innovation are also being new supports; and in our opinions, the promoting function for long-term regional development will be not less than new investment.”

Bidirectional Support from Software and Hardware

Tianjin Development Area Science and Technology Group (The Science & Technology Group) was built in 2011, and has become the nest for more than 4600 small & middle hi-tech enterprises only for 3 years. There are 340 enterprises called as “science and technology little giant” those each enterprise has more than 16.3 million USD annual business amount.

Same as “Radical Innovation” (“Breakthrough Innovation”) in USA from many college & university ecosystems, science and technology platform in Tianjin Development Area has become “Business Transformation Base” for many excellent universities to produce innovation thinking in Beijing and Tianjin.

The focus industries or targeted customers gathered by enterprise most of them located in the Science & Technology Group, distributes many areas such as finance, biological medicine, clean energy and environment protection.

"Today’s enterprise groups no longer deeply focus on vertical industry chain”, introduced by Yanan Hou, head of ministry of information from Science & Technology Group. He also said “For example of internet enterprise groups, their services cover many areas such as product design and marketing. Therefore the interaction and integration of whole industry chain not only provide vertical collocation but also provide more transverse and crosswise development opportunities.”

For development of whole industry ecosystem, the Science & Technology Group devotes to provide bidirectional supports from hardware and software. The hardware includes official places with perfect devices, infrastructures, and building design that provides conveniently communication for enterprises. The software means real supports from investment & financing to employment and a series of enterprise business activities. 

"In early development period, the most considering element is that which industrial park can help companies to save money.” said by Yanan Hou. He also said “Now, the considering element from companies has become who can help us to earn money. Therefore it will be the most urgent demand nowadays, no matter investment & financing or talent support.”

From the Scandinavians to Silicon Valley

It is worth mentioning that important transformation and changing are also happening. According to introduction of Hongliang Li, the current development mode of science and technology industry in Tianjin Development Area is similar with innovation systems in the Nordic countries, especially the point that support from governments is important for science and technology enterprise in early development period. And he also introduces that the development goal in future of Science & Technology Group more tends to be the USA mode. For example, private shareholding will attend enterprise development.

In fact, private equity also is also gradually flourishing especially in process of promoting SOE to develop multi-business, highly effective management and mixed ownership encouraged by government. The private equity plays active role.

According to report provided by research center of Zero2IPO Group in Beijing, at the end of 2014, Tianjin had 405 private equity funds (increasing 23% year-on-year), and successfully financed 56 billion USD (increasing 82% y-o-y).

The report above further shows that there were 892 projects cumulatively invested by those private equity funds increasing 125% year-on-year. For investment gathering degree, there were 129 investment projects in relative industries of internet that was top one in whole industries. Then were real estate (104 investment projects), biological medicine & health industry (76 investment projects). For absorbing capital, the real estate was top one that absorbed 9.5 billion USD, and then energy, mineral industry and retail industry.

"It will play more and more important function in innovation career to introduce capital from government” said by Hongliang Li, “We will also gradually use private shareholding way to do and speed up innovation & incubation. For example, as angel investor, investor of other private equity or organic bond between initial entrepreneurship enterprises, we can provide seed money for enterprises. In a word, this will make us tend to be USA mode and will benefit long-term development for science and technology industry. ”

Those efforts of course have been actively focused and accepted by entrepreneurs.

"When financing, some internet service providers like us not only need huge investment, but also need a long –term business development” said by Jing Ouyang, general manager of Tianjin Hechang Science & Technology Co., Ltd. “Therefore, there is no doubt phenomenon that the industry is usually lead by multinational enterprises that have financial strength. I believe that Tianjin Development Area Science & Technology Group is the first one to invest our initial entrepreneurship company in all risk investors with background of state-owned assets in China.”

Of course, industrial observers also say that it is the beginning to inject seed capital.

"In cultivation of innovation industry, it not only helps initial entrepreneurship enterprises to gain investment, but also help entrepreneurs and investors to have opportunity to gain early financing return mechanism after enterprises developing. To set up and perfect investment exit mechanism also should be focused” said by Duncan Inners-ker, China’s Senior Economist in EIU, “In the whole map; the effective stock market is also a significant elemet.”

Culture Aggregation

Besides mechanism construction, invisible aggregation from culture also has been quietly built. For China, it is a way for accomplishing culture aggregation to attract overseas returnees who have experience of learning and working aboard to attend innovation wave.

"Human being is a best media to spread good culture” Hongliang Li said, “entrepreneurs of overseas returnees are not only familiar with China’s market, but also have western knowledge and technologies. If entrepreneurship here, compared with other local enterprises, those companies set by overseas returnees are easier to export their products in international market. ”

Hao Hong, the leadership of Asymchem is one of these oversea returnees. Asymchem is one of representative enterprises in hundreds of enterprises set up by overseas returnees those were supported by Tianjin Development Science & Technology Group Co., Ltd.. Currently, 7 of global ten multinational medical companies are customers of Asymchem.

Looking back to the entrepreneurship history, Mr. Hong introduced that after graduation from University of Georgia with PhD, he set up a local company. And then as one of “Thousands of People Plan”, he was also one of entrepreneurs who firstly entrepreneurship in China.

"I tried to initially invest in Tianjin Development Area and the scale was only 200,000 USD” Mr. Hong recalled, “After many years’ development, now the annual production value from our company is beyond 100 million USD. That means Asymchem is one of enterprises that was born and growing in Tianjin Development Area.”

The Diversities of Successful Measures

Hongliang Li thinks that no matter constructing investment & financing mechanism or attracting overseas returnees entrepreneurship, Tianjin Development Area hopes those measures will be benefit for constructing diversity of industrial atmosphere. Because they are very important for enterprises to co-promote and to collaboratively develop.

As to say, for those people who always see strategies lead by government as the mark of China’s economy, it is a kind way of endogenous cultivation mode for increasing economy that is totally different before. And it also needs foresight.

Albert Goldson, Managing Director & General Manager of Indo-Brazillian that is a global business consulting and think-tank and headquarters is located in NY. In his opinion, if companies gathered by their co-development, cooperation of enterprises from different areas or sizes also produce better results.

"As specific phenomenon of ‘strange spouse’ in natural world, the co-development relation between companies may not be clear at a glance of the similarity from technology“ Goldson said “however, the co-development relation maybe simply made from similar willing, company culture and goals. Many enterprises has grown and been property in this ecosystem.”

It is not a easy thing for international professionals to construct a innovation science & technology community. TEDA is at right development path.

"The intercommunication of enterprises and opportunity of ‘partner study’ are key elements to succeed for science & technology community in future.” James Berkeley believes, international agency director of Ellice Consulting that headquarters located in London, ”As a designer of great industry community structure, TEDA built an ecosystem to continuously attract new enterprises. No matter for other locations in China or for western investors, TEDA is a park where they must reach.”

Mr. Li thinks that in future the career devoted by all spirit of his team not only produces result of science & technology community, but also supports entrepreneurship spirits for young people.

"There are many young people actively seeking a non-traditional way to accomplish their goals. That is entrepreneurship!” He says, “To seek a stable job is no longer the only way to realize self-value.”

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