19 may 2017
Captain Katrien Devos has joined a Belgian delegation of 30 Flemish entrepreneurs to learn about The Day After Tomorrow in China. This tour, guided by Nexxworks’ Peter Hinssen and Steven Van Belleghem, started in Shenzhen, and will take the group via Hangzhou to Shanghai, their final stop.
Katrien is thrilled to be a part of this year’s Day After Tomorrow Tour and is sending inspiration from the Far East, back home. Enjoy part 1!
Travel along via social media, using #DATChina2017
Competition leads to innovation
Technology is everywhere: WeChat (“the Asian Messenger”),touchscreens on the mirror of the bathroom in the hotel… Shenzen was the perfect place to start the tour, which would explore the tech scene and innovation hubs in the East.
An introduction to the history of China, given by Filip Caeldries, TIAS Professor, kicked off their journey. China missed the industrial revolution, for a number of reasons. Most ironically because of their unified empire and relative peace within it. The West, constantly at war in those days, was under the perfect conditions for innovation: fragmentation leads to competition, and competition leads to innovation.
However, China is making an impressive comeback. Since 2014, China is the biggest economy in the world. 4 Chinese (state-owned) companies feature in the top 20 of the 2016 Global Competitiveness report. The country wants to become independent from the West and Western innovations. Their focus lies on 10 high-tech industries for the next five years. This means a lot of opportunities for foreign companies in the near future, but watch out: they’ll be looking for independence afterwards!
China’s investments are already paying off: the start-up scene is blooming and thousands of new companies pop up every year. And the results follow: China is responsible for a great part of today’s technological innovations, for example the electric busses in Schiphol, mobile payment (which is already integrated a lot more than in the West),language AI that can recognize Chinese (which has 40 dialects) existed already in 2015…
So how do they stimulate innovation? They work in different ways:
- Brand development or buying strong foreign brands
- Support from the Chinese government
- A large amount of middle-income based people are really motivated to work
- R&D is strengthened via buying, trading with or collaborating with other companies
- The scale of innovation is huge: they decide to test something, experiment in a big city, and then roll it out for 1.4 billion people
- According to Filip Caeldries, the deck of cards are being reshuffled right now, and it won’t take longer than 5 to 10 years before China will take over the West.
Still, The Chinese and Asian market are still very interesting markets to be active in:
- E-commerce can reach a 1.4 billion consumer market
- Costs of platforms go down
- It is a real innovation hub, as described above
In short, China is catching up quickly with the West. Various centres of innovation exist that can rival those in Europe and the USA.
6 months is too far into the future
Monday in Shenzhen, China’s innovation hub that’s larger than Belgium. It is a very mixed culture, with immigrants from all over China. Foreigners, students, and youngsters are encouraged to come to the city. Start-up competitions are open for foreign start-ups and are organised in English. It is a truly international city, contrary to Shanghai and Hangzhou, that have a more Chinese and less global feel.
The first visit of the tour was at Tencent, one of the biggest players in the world. Currently 55% of all time spent on a mobile device in China is spent on or through one of Tencent’s products. Their best known brand is WeChat, but they are also active in the self-driving car business, artificial intelligence, and gaming. They are the biggest investor in Shenzhen – and China as a whole – and also support young internet entrepreneurs via Innohub, a start-up hub.
Taking small innovative steps and being client-centred all of the time is their company culture.
“WeChat is not a system, not social media, not the Chinese WhatsApp nor Facebook, it is an operating system for your life”
WeChat is somewhat comparable to Facebook, but can do much more. QR-codes – very, very popular and common in China – form the basis of the system and can be scanned to inform, chat, game, or pay. You can pay practically anything via WeChat, so much that cash money is often refused because the app is available. It translates your English chat into Chinese and translate Chinese replies into English to make communication easier! The data gathered by WeChat is used to contribute to smart cities. Lastly, WeChat allows its users to make money by getting virtual gifts or getting livestream likes.
“We are all students and we are all teachers” – Tencent Academy
The next visit took the group to Innohub, a start-up hub, supported by Tencent. No ping pong tables, flip flops or dogs here, like in Silicon Valley, everything was spacious, clean and more orderly organised.
After some start-up pitches, Peter Hinssen also took the stage to compare the European start-up scene with the situation in China. There were two important take-aways:
European start-ups are chronically underfunded: without more funding, European start-ups cannot grow into big and giant companies, something that is possible in China and the USA.
European start-ups cannot do it on their own. In Silicon Valley, start-ups are against corporates and in the East they collaborate with their government. In Europe start-ups could/should find a smart way to collaborate more with corporate ecosystems.
Next, the group visited DJI, a robotics company that produces drones and sold 1 million of them in 2016. It is a big player on an international level, which is active in 100 countries. Originally a manufacturing company of radio-controlled aircrafts, they switched to photography before venturing into the world of robotics and starting the production of drones. Among other uses, their drones assist firefighters and can save lives. To show once more the innovative character of many Shenzhen companies, DJI uses technology in their most innovative flying toys that’s more advanced than what’s used in the Oculus Rift.
Innovation is stimulated thanks to their location: Shenzhen allows for the operational capacities needed to produce millions and gives access to parts needed for the manufacturing of their drones. Finally, they also stimulate competition among their own employees.
After all, competition leads to innovation!
The moment a new drone is for sale, a better version will be available just 6 months later. All teams within the company want to beat the others by building better drones. Many parallel teams are working on the next version. In total, a quarter of their 8000 employees work in R&D.
Their employees are pragmatic, very competitive, and very result-oriented. Long-term thinking is not really important: they prefer to simply continue working on a new, better version of their drones, as these quotes illustrate:
"Others want to please investors and work on concepts, we focus on what they can expect short term”
“Instead of talking about the future, we prefer to show something to our consumers…”
“Everybody who comes here wants to create something new. No dreams on the future of drones, we do not do fancy AI predictions. We do not look 6 months ahead, we just work on the next better version.”
Even 6 months is already too far in the future!
In terms of recruitment, DJI only hires those who are compatible with its company culture (something we should all do). Candidates have to apply via a personality questionnaire. Only 20% of applicants fits the profile they seek: have multiple competences, of which the important one in entrepreneurship.
Their structure is also not a classic hierarchy, as they believe that would simply not work. Instead it works like a network, where every employee is a dot within that network.
For videos and pictures about this exciting trip, follow Katrien Devos on Facebook! Stay tuned for Part 2 of the Day After Tomorrow Tour 2017 #DATChina2017