Feature: Chinese research institute offers helping hand to fledgling tech companies

In January 2014, Zheng Hongzhi, founder of Accusilicon USA Inc., returned to China to seek financing for his company, which was waiting its second round of investment back in the U.S.

Zheng held little hope because he was unfamiliar with how the Chinese investment environment had changed in the past 7 years overseas and his last failed attempt to set up a company was still fresh on his mind.

To his surprise, he obtained 20 million yuan in only 6 months. He soon opened Xi'an Ruixin Microelectronics Co. Ltd. and began to develop ultra-low noise clock IC for mobile phones. After mass production of the chips in April 2015, they now occupy more than 30 percent of the domestic market, breaking the monopoly by Japan and becoming one of the rare Chinese high-end smart phone chip brands.

ANGEL OFFERS BLESSING

Xike Angel Fund, initiated by Xi'an Institute of Optics and Precision Mechanics (XIOPM) of Chinese Academy of Sciences, was one of the first to back Zheng.

"High-tech funds are different from other kinds of funds," says Zhao Wei, director of the institute. It requires investors to have a good command of the technology per se, its application and its market. "Yet most of the investors are reluctant to choose high-tech programs whose future remains unpredictable to them, rather, they would pick the lucrative ones. As a result, many of the technologies do not go to the market."

Noticing the fact that many technologies are not able to enter the market, Zhao was anxious. In 2012, XIOPM, together with the local government and private capital, established the Xike Angel Fund, the first angel fund in northwest China to specialize in industrialization of scientific and technological achievements. In the following year, optoelectronic industry incubator Casstar Innovation Incubator was founded.

This is only part of the institute's efforts. In fact, in recent years, XIOPM has been introducing entrepreneurs from abroad, incubating startups but not holding a controlling interest, and forming an entrepreneurship ecosystem that includes research, angel funds, incubators and training.

This February, President Xi Jinping stressed that China cannot beg for core technologies or rely on anyone while inspecting XIOPM. He expressed his hope that scientists will be responsible and confident in pursuing new ideas, so as to implement the country's strategy of innovation-driven development.

Zhao believes the best way to make technological innovation is building close cooperation between academia and enterprises.

FORMULA FOR ACHIEVEMENT

Many entrepreneurs are touched by Zhao's sincerity in supporting high-tech companies. Zhu Rui is one of them. When he was a postgraduate student in Tsinghua University, he led a team that developed China's first optical coherence tomography (OCT) system and won first prize at the Shenzhen Entrepreneur Awards. Surprising many, he discontinued his study at Hong Kong University and stepped into XIOPM.

Zhu made this decision after a talk with Zhao. Zhao told him if his program failed, he could continue his research at the institute and, if succeeded, he could operate his company. "Innovation can only be made in an inclusive and tolerant environment," Zhu says. "That's why I stayed here."

Jointly founded by the institute, Zhu opened his company Shenzhen Vivolight Medical Device & Technology Co., Ltd. It is the first high-tech enterprise specialized in endoscopic OCT system research and development, manufacture and service. The company's infrared vein imager helps to observe blood vessels prior to injections and has been employed at major hospitals in China.

Zhao says when President Xi inspected the institute, he was interested in their product and put his arm under the scope for a look at his veins.

Finding talent remains a difficulty for startups. Through the institute, Zhu's company gathered a number of postgraduates.

His company's staff can concentrate on research and development because they leave legal affairs, finance, public relations and training to the institute.

In an innovation space co-built by the graduate school of the institute and Casstar Innovation Incubator, Li Bin, a PhD student of the University of Chinese Academy of Sciences (UCAS), is developing a small machine to allow people to "typewrite with their eyes" with his team. "In this space, our students are turning creative ideas into reality, and even into entrepreneur programs," says Li Jinfang, director of graduate school of UCAS.

Mi Lei, CTO of Casstar Innovation Incubator, says today, the industrialization of scientific and technological achievements emphasizes providing a sound environment for entrepreneurs. He calls it the "rainforest way", as it offers plentiful resources to sustain and attract diversity, similar to a rainforest.

In this sense, XIOPM has formed its own formula for industrialization of scientific and technological achievements, which is the four-part strategy of "talent + technology + capital + service."

SUPPORT NOT CONTROL

Being an investor, XIOPM does not play the role of housekeeper; rather, it gives sufficient autonomy to the companies.

The approach of the institute is to join the stakes but not hold controlling interest.

"It is our iron law not to hold controlling interest," Zhao said. "We do not want a company to change into an institute, which does not have the knack for product positioning or operating a company." He hopes companies can truly run according to the laws of market.

"Company owners have their own personalities," Zheng said. "For me, I hope I can find you when I need your help, but when I do not need you, please let me do it by myself."

Up to now, XIOPM has incubated 70 high-tech companies and introduced more than 30 entrepreneur teams from abroad. Its output value has reached 1.2 billion yuan and created over 3000 jobs.

Innovation is a key word in China' s development plan for the next 5 years. It is stated in the CPC's 13th Five Year Plan to strengthen the dominant position and role of enterprises in making innovations, and to build a batch of national technology innovation centers based on enterprises, colleges and universities, and research institutes.

"XIOPM will continue to improve its capacity in innovation," Zhao says. "Our goal is to create wealth for the society by producing high-and-new technologies and incubating high-tech enterprises that are competitive in the market." Endit