Welcome to the wechat subscription number of “chuangshiji”: sinachungshiji
By Qin Shuo
Source: Qin Shuo’s circle of friends (ID: qspyq2015)
This article mainly discusses three problems
Why should innovation seize the day?
What is the innovation status of Chinese enterprises?
What misunderstandings may exist in innovation?
Innovation is often forced out
Let’s start with the first question.
The importance and strategy of innovation are not to mention. However, in recent years, it is rare for China to promote innovation in all aspects of the country with one mind and without delay.
For example, under the pain of lack of core, the national integrated circuit industry investment fund (big fund) was established in September 2014, with a total raised investment of 138.7 billion yuan in the first phase and a total of 70 effective investment projects; the second phase, which was established in October 2019, has a registered capital of 204.15 billion yuan.
Take the capital market as an example. On November 5, 2018, the state leaders announced that they would set up the science and technology innovation board in the Shanghai Stock Exchange and pilot the registration system. After more than nine months, the market opened, and the first batch of 25 companies landed. As of December 23, 2020, 208 enterprises have been listed on the science and technology innovation board, raising nearly 300 billion yuan.
The science and technology innovation board has set new records in many capital markets, such as the listing of Biopharmaceutical Enterprises without profit or income, the listing of red chip enterprises, the listing of enterprises with the same shares and different rights, and the listing of red chip enterprises issuing China depository receipt (CDR). SMIC international, a red chip listed overseas, took only 18 days to attend the meeting, setting the fastest record. It can be seen that in order to open the way for innovation, all parties concerned are working unconventionally and unconventionally.
There are more than 340 billion large funds in the two phases. The science and technology innovation board has raised nearly 300 billion in one year and five months, while the R & D funds of all Chinese enterprises in 2019 are less than 1.7 trillion, which shows the great importance and investment in science and technology innovation.
China’s emphasis on innovation is driven by both internal and external factors. The acceleration of this round of independent innovation is highly related to the trump government’s technology suppression and restriction.
If we look back, we can see that innovation is often forced out.
In 1986, China issued the 863 plan (National High Tech Research and development plan). The background is that four scientists, Wang Daheng, Wang Ganchang, Yang Jialong and Chen Fangyun, saw that the United States introduced the “Star Wars plan” (Strategic Defense Initiative) in 1983, Europe introduced the “Eureka plan” (European Research Coordination Agency) in 1985, and Japan was brewing the “science in the next decade” in 1984 and 1985 Therefore, they put forward that “we should track and study foreign strategic high-tech development”. Deng Xiaoping read and said, “it’s better to make a quick decision on this matter and not to delay it.”.
In 2002, the 16th National Congress of the Communist Party of China proposed to “formulate a long-term development plan for science and technology”. After more than three years of efforts, the outline of the national medium and long term development plan for science and Technology (2006-2020) was issued in 2006, putting forward the 16 character guideline of “independent innovation, key leaping, supporting development and leading the future”. Among them, the definition of independent innovation is “starting from strengthening the national innovation ability, strengthening the original innovation, integrated innovation and re innovation of introduction, digestion and absorption”.
In 2001, China just joined the WTO and deeply integrated into the globalization. Why is the policy of independent innovation brewing soon? There is an example that can explain it. In December 2003, when Premier Wen Jiabao visited the United States, the United States proposed to balance the trade deficit. Wen Jiabao said, “Chinese people can’t always eat soybeans by plane.” it’s not that we don’t want to buy your products, it’s that you are not allowed to sell many products to China, and we can’t always buy your airplanes and agricultural products.
At that time, you realized that you might not have sold the cutting-edge technology to China. If there is no core technology, China will continue to “export 100 million pairs of shoes or 800 million shirts to import an Airbus 380”, and can only pay expensive patent fees to foreign enterprises all the time. At that time, the patent fee of mobile phone accounted for 20% of the selling price, the patent fee of computer accounted for 30% of the selling price, and the patent fee of CNC machine tool accounted for 20% to 40% of the selling price.
Once Chinese enterprises have mastered the core technology, the product prices of foreign enterprises may drop several times, dozens of times or even hundreds of times. A typical example is the program-controlled exchange. When China first introduced it in the 1980s, the price of each line was about $500. After the successful research, foreign enterprises reduced the price to a few dollars per line.
In 2005, Liu Yanhua, then Vice Minister of the Ministry of science and technology, delivered a speech at the “China Science and humanities forum”. He said, “the introduction of technology does not mean the introduction of technological innovation capability”, “it makes the market lack of core technology, so it is possible to become a dependent country and finally be controlled by others”. On the slide, he quoted a report of the RAND Corporation of the United States in 1980 that only technical independence can lead to economic independence, and finally political independence.
In recent years, the strong start of China’s innovation is not only the continuation of the principle of “independent innovation, key leapfrogging”, but also strengthened by a series of events such as US sanctions against ZTE and blocking Huawei. Moreover, compared with the past, this time some enterprises are forced to come to the point where life and death are at stake.
Many people can still remember that on April 16, 2018, the US Department of Commerce announced that ZTE would be prohibited from purchasing sensitive products from US enterprises in the next seven years. In May, ZTE announced that “affected by the refusal order, the company’s main business activities could not be carried out.”. After paying a heavy price, the US Department of Commerce “temporarily and partially lifted the export ban on ZTE.”.
The more the United States suppresses China’s technology, the more China will be forced to rebound, and it will no longer have illusions.
How urgent to innovate! Because it is not urgent, there is no better way out, unless willing to become a “dependent country”.
How far is it from the world-class level?
Next, let’s talk about the second question: what is the innovation status of Chinese enterprises?
Let’s start with the conclusion
1. Chinese enterprises have gone a long way on the road of innovation, but there is still a long way to go.
2. Although there is still a long way to go, Chinese enterprises are in the great journey of innovation revolution and innovation evolution, and the future is promising.
I conduct field research on dozens of enterprises every year, and the conventional questions include: how far are we from the world-class level? What’s the difference? Can we catch up? How to catch up? What I saw and heard let me know the gap, and that the gap is being compressed.
From the perspective of industry and informatization, the main gap is still “four bases” (core basic parts, key basic materials, advanced basic technology and industrial technology), and “new four bases” (automatic control and perception hardware, industrial core software, industrial Internet, industrial cloud and intelligent service platform).
The well-known gap is the chip. Eight of the world’s 10 mobile phones are produced in China, but before Huawei, all chips cannot be self-sufficient. The core chips of computer, general electronic system, communication equipment, storage equipment, display and video system are mainly imported. Chip mounter and dual track printer for smart phones, exposure machine for panels, vacuum evaporation machine for OLEDs, top-level lithography machine for chips, multi axis robot for automobiles, and high-performance CNC machine tools for wind power substrates are basically imported.
In terms of core basic components, from the blades of heavy-duty gas turbines and high-end sensors to high-performance bearings in mechanical equipment, even a capacitor that is extremely cheap, but if it breaks down, it will make the circuit board waste, basically depends on imports. China can produce 1 billion tons of crude steel a year, but high-end bearing steel and ultra-high strength steel for aircraft landing gear have to be imported.
In terms of materials, both high-end chemical materials and high-end electronic materials are mostly imported, such as photoresist used in chip production, polarizer used in liquid crystal panel production, TAC film and PVA film upstream of polarizer, large-size ITO (indium tin oxide) target used in display production, structural adhesive used in mobile phone and automobile production, etc.
In terms of operating system, high-end 3D CAD software, electronic design automation software (EDA), high-end programmable logic controller and so on, China does not have an enterprise with global status. The same is true for scientific instruments. The top 20 companies in the world do not have China’s, and the production of high-end optical microscope and transmission electron microscope is almost blank in China.
What I often hear in enterprises is that they have a strong external dependence on many high-end, core and basic aspects. High performance manufacturing equipment (such as CNC machine tools) is not enough. Many things can be done with domestic equipment, materials and processes, but the strength, accuracy, reliability, stability and consistency are not enough.
It’s not a new problem. This is what I said a few years ago when I proposed that China’s economy should move from broad to profound.
Why are there so many gaps?
First, since the beginning of the industrial revolution, the West has been at the forefront of innovation. We started too late. It’s normal for them to lead.
Second, intensive industrial capacity needs to be accumulated. It is a system engineering and a friend of time. It needs a process.
Third, many standards, patents and paths for the development of modern industry are basically formulated by the West. We are also members of this big system. We need to make great efforts to surpass or break through.
Finally, there are deep-seated problems behind innovation, such as basic scientific research, scientific spirit and scientific culture of the whole society, education, talents, innovation environment, system and mechanism, etc.
China’s innovation has gone a long way
Since there are so many local gaps, why do we say that Chinese enterprises have gone a long way on the road of innovation and have a long way to go?
It’s very painful for us to get stuck, but from another perspective, it’s precisely because the innovation of Chinese enterprises has approached a critical point. If they don’t get stuck, they will lead and even make rules (such as Huawei 5g), so the dominant countries now take action.
During my research, I found that if the highland of technological innovation is compared to Mount Everest, many leading enterprises in China have crossed five or six kilometers and are climbing seven or eight kilometers, some of which are close to the peak. Almost all the enterprises are chasing the global leaders in this industry, and there are few of them.
There is still a gap in the “four Basics”, but it has also gone through thousands of mountains and rivers. In 2012, when Apple Corp first published the list of 156 suppliers in the world report on the progress of supplier social responsibility, only 8 mainland manufacturers in China, and 40 in 2019 (including Hongkong). As 46 Taiwan funded manufacturers and some foreign factories are also built in the mainland, our supply capacity in the whole chain of the electronic consumer industry has made a huge leap.
In terms of independent innovation of big country’s heavy equipment, the Beidou system, 5g, supercomputer, 600km / h high-speed maglev test vehicle, reusable spacecraft, chang’e-5 orbiter and so on in the past two years all show the power of China’s creation.
For example, the chang’e-5 orbiter has to withstand the test from minus 200 ℃ to 1300 ℃ at the highest temperature. Behind it are breakthroughs in the integrated lightweight thermal design concept, peak shifting compensation temperature control strategy and secondary thermal protection composite system.
In the 2020 global innovation index report (involving 131 economies) released by the world intellectual property organization, China ranks 14th. In 2019, China’s R & D investment intensity will reach 2.23%, exceeding the average level of the European Union. The number of R & D personnel ranks first in the world.
Wei Shaojun, chairman of the integrated circuit design branch of China Semiconductor Industry Association, recently pointed out that the scale of China’s chip design industry increased from 132 billion yuan to 381.9 billion yuan during the 13th Five Year Plan period, with an average annual compound growth rate of 23.6%, nearly six times the average annual compound growth rate of the global semiconductor industry in the same period. China is moving forward very fast. Wei Shaojun said: “if you work hard for another 10 years, China’s chip design industry will surely achieve fruitful results.”
I have another experience. Many years ago, it was considered as a blank or short board in China. It didn’t take long to break through.
For example, there is a saying that China produces 38 billion ballpoint pens a year, accounting for 80% of the world’s total output, but the nib steel and equipment for making the refill have to be imported. I asked the founder of Chenguang stationery that NIB steel was imported from Japan before, but TISCO group spent five years studying and gnawed down this hard bone a few years ago.
For another example, recently many people worry that Pfizer’s new crown vaccine must be stored and transported at minus 70 degrees Celsius, so it is difficult to be inclusive. But the news from the bill and Melinda Gates Foundation is that Merck’s Ebola vaccine faced a similar challenge, and must be stored below minus 80 degrees Celsius. The vaccine is transported in arktek refrigerators, a high-tech insulated box that can maintain ultra-low temperatures for up to a week without external power supply, so the Ebola vaccine can also be delivered to rural areas during armed conflicts in Africa. Arktek refrigerator is produced by Qingdao Aucma, and the technology is developed in cooperation with Gates Foundation.
Recently, Ningbo Optoelectronic Technology Daily reported that the ar90nm photoresist technology has been successfully used in the photoresist nodes of the company.
I visited Fulian of Shenzhen industry not long ago and saw an innovative product – intelligent rail milling cutter. It is also one of the “core technologies to be overcome” reported by science and technology daily. It is used in the milling car for the maintenance of high-speed rail, and it is the most core component. It can mill and shape the rail contour in time and eliminate various defects. This maintenance method is more efficient than belt grinding.
In the past, milling cutters could only be imported from borrett company of Austria. After reading the report of science and technology daily, Fulian organized to tackle key problems, breaking through core technologies such as materials, structural design, coating, high-end equipment, precision sensing and intelligent control. With nano cutting technology and operation and maintenance control technology based on big data and artificial intelligence, cutting quality early warning can be realized Intelligent operation such as tool load warning, overload judgment, cutting parameter judgment and processing.
Recently, China is carrying out an anti-monopoly and anti unfair competition review and rectification against Internet giants, which is necessary. However, many critics criticize these companies for not contributing to technological innovation, which is very biased. “Emerging China” (the concept put forward by Goldman Sachs) is the highlight of China’s innovation in the past 10 years. Chinese Internet companies have made many breakthroughs in big data, cloud computing, artificial intelligence, etc. some places are leading in the world, which makes Amazon and Facebook feel pressure. Some people think that e-commerce, takeout, social networking, online classes, online car hailing, intelligent recommendation and logistics distribution are very simple, but it is a very difficult technical challenge for hundreds of millions of people to carry out activities on them at the same time, to ensure efficient, real-time, reliable, personalized and accurate services, and extend them to the whole ecology. Don’t think of innovative heroes as bears.
Moreover, Internet companies are also good helpers in the digital transformation of China’s real economy, social services and government affairs. Nowadays, there are talks everywhere about one net and smart city, and Internet companies are important promoters. China is the world leader in anti epidemic, and the service of Internet companies also contributes a lot.
From the opening of Haier’s intelligent factory to the inspection of finished products, I can see them in real time. At the industrial Internet Forum held by Haier, a guest introduced Yangxiang, an intelligent pig raising enterprise in Guangxi. In the past, sows were bred by capable breeders, and the annual salary of senior investigators was 600000 yuan. Yangxiang spent three years to develop a set of intelligent equipment – intelligence detector, which can automatically collect sow behavior, voice, smell, body temperature and so on 24 hours a day, determine the best breeding time, improve the pregnancy rate of sows, and increase the litter size. In this way, the value chain of pig breeding is reconstructed with intelligent hardware, and the enterprise is also transforming towards the service platform of “technology changes pig breeding”.
Some friends also introduced the “intelligent manufacturing” of the umbrella industry. Before doing foreign trade orders, samples to back and forth express many times to confirm, and then mass production. Now, with the dynamic drawing software, the factory designs the drawings, and the digital samples are previewed in 3D. The ordering companies can directly feed back their opinions on the software through the Internet, just like working on the same desk. After the drawings are confirmed, the server-side intelligent manufacturing system quickly enters the next process. The speed is fast, the cost is low, and the efficiency is high.
Looking up, there is still a gap between the highest standards and top experts. Looking back, we have gone a long way, surpassed many competitors, and explored many innovation paths with our own characteristics – this is the innovation status of Chinese enterprises.
From independent innovation to creating value for human beings
Finally, let’s talk about some misunderstandings that may exist in our cognition of innovation
1. We should set independent innovation against opening up and cooperation.
While adhering to independent and controllable innovation, we should not ignore that there is still a lot of room for open innovation, international division of labor and cooperation still exist widely, and competition and cooperation and cross licensing of intellectual property rights are very common. Therefore, we can’t engage in closed door policy, give up or even exclude international cooperation, and there is no need to start all over again. We can’t make our own decisions for our own sake. We all have external dependence.
2. The government is too deeply involved in the innovation with enterprises as the main body.
In recent years, many scientific and technological enterprises have invested in various places, which are welcomed by the government. For some projects, the local government has accounted for 80% or 90% of the capital, and the government also guarantees the enterprises directly. The enthusiasm of the government to support innovation should be affirmed, but after all, enterprises are profit-making organizations, not public service institutions. It is against the government’s positioning that the government guarantees the investment of enterprises, and it is easy to distort the allocation of resources, leading to unfair competition. How replicable is the success of venture capital of individual local governments? It should be carefully evaluated. Excessive government intervention has also induced some scientific and technological innovation enterprises (including pseudo scientific and technological innovation enterprises) to invest in order to circle resources and get subsidies, which is definitely not optimal in management. We should not continue to repeat the historical lesson of swarming on the horse.
3. Label and conceptualize independent innovation, and ignore the importance of value creation activities such as technological transformation, process improvement and management progress.
There are a lot of projects and investments in high-tech independent innovation. It seems that from 0 to 1 is just around the corner. In fact, as many academic researches have pointed out, the industrial revolution in Britain was in essence an industrial evolution. Many technologies have existed for a long time, but the industrialization, market-oriented application of these technologies is the key. From 1 to 100, more depends on evolution 。 The combination of digital, flexible and intelligent enterprises is evolving in a similar way. They deserve attention. But conceptual innovation needs to be vigilant.
4. Equate innovation with high cost and large investment.
It is true that R & D needs financial support, but from the perspective of marginal growth, China has invested a lot. In 2019, R & D investment intensity (R & D investment / GDP) has exceeded the average level of the European Union. A large number of scientific and technological innovation achievements are not piled up with money, but are connected with curiosity, interest in knowledge creation, long-term focused research accumulation, and persistent enthusiasm to solve human problems.
I have been to Asahi Kasei company in Tokyo. The honorary researcher of Asahi Yosano won the Nobel Prize in chemistry in 2019 in recognition of his achievements in the research and development of lithium-ion batteries. When Yoshino was in the third and fourth grade of primary school, his class tutor suggested that he read a book about why the candle burned and why the candle flame turned yellow. He became addicted to chemistry. After graduation in 1972, he joined Asahi chemical, and began to explore the way to develop lithium batteries. However, the first three years after the products came out, they could not be sold at all, resulting in great mental pressure. Many innovations are the result of a few people’s painstaking efforts, not necessarily the result of large regiments and high investment. Curiosity and exploration are more important than money. In other words, without curiosity and exploration, more money is useless.
5. We should “Pan politicize” independent innovation.
My research in various places shows that in terms of government investment, government procurement and financial resources supply, there is a subconscious that “as long as it is independent innovation, it should be supported, even regardless of cost, even if it fails”, and there is a sadness that “being stuck now will break your neck in the future”. We need to see that the reason why China has leapt to the forefront of innovation in just a few decades, industrialization, urbanization, informatization, marketization and internationalization are carried out at the same time, is inseparable from the fact that we, as latecomers, rapidly introduce the world’s advanced science and technology in a concentrated way through opening up.
We should deeply appreciate the scientists, inventors and innovative technologies in the modern world. Although we have paid the price of introducing technology and intellectual property rights, we have gained more benefits than the price. So independent innovation is to solve the neck problem at present, but in the long run, it is still necessary to stimulate the broader pursuit of “innovation for the benefit of the world” and “innovation for human progress”, and have the feeling of contributing to human beings. Only in this way can the world feel the value and significance of China’s innovation – not to defeat all competitors, but to benefit human sustainable development.
Finally, let’s summarize.
Due to the unexpected trigger of external pressure, we can’t help but be influenced by the emotion of pursuing complete autonomy, hoping to solve problems quickly, being too anxious and impatient in the issue of independent innovation.
I write this article not to depress the value of China’s innovation, but to build up real confidence on the basis of an objective assessment of the current situation of China’s industrial innovation, and to remind all parties that we should seize the day to promote innovation, but in specific actions, we should not be too hasty, do not deform, get rid of excessive anxiety, adhere to long-term principle, and follow objective laws, Taking enterprises as the main body of innovation, the market as the main traction, and the scientific attitude of popularizing scientific culture and pursuing truth in the whole society as the long-term basis. Only in this way can innovation be better promoted.
More haste, less speed. Only in accordance with the law can we achieve sustainable and healthy development.
(statement: This article only represents the author’s point of view, not Sina’s position.)