China's innovation problem: weak science

One of China’s most prominent scientists warns that despite the heavy investment in science, the field is stymied by the country’s weak scientific tradition and an inability to attract talent.




One of China’s most prominent scientists warns that despite the heavy investment in science, the field is stymied by the country’s weak scientific tradition and an inability to attract talent.
The promise and trepidation of quantum, a plan to bring PCs to the unwashed and an encounter with a smart adult toy. All in a day at RISE, the 24-hour party conference.
Hong Kong has won acclaim over the years for its kung-fu movies, excellent dining, spectacular skyline and free economy.
But never for its technology.
So today may eventually be regarded as a modest milestone in its path to becoming a technology hub. It's probably fair to say few Hong Kong citizens are aware that that is a path they are on. In fact, governments over the past 15 years have built science parks and incubators and tipped in growing amounts of R&D cash.
Today's news is that a local startup, Vitargent, has taken on Taiwan-American VC firm W.I. Harper as an investor for an undisclosed amount.
That may sound modest in the extreme, but Harper chairman Peter Liu has enormous cred in the tech investment community. In a career that goes back to 1983 in Taiwan and 1992 in China, his successes include Singapore's Creative Technologies, the inventor of the PC soundcard, and video software firm Divx. Currently, he is an early stage investor in apps search firm Quixey, which has attracted investment from Alibaba and Softbank that values it at $600m.
Vitargent's back story isn't as long but it's impressive. An incubatee at the Hong Kong Science Park, it uses fish embryo to test for toxins way more effectively than anyone else. Traditional tests can identify five to ten toxins; it can test for 1,000 (that's transgenic medaka, or Japanese rice fish, glowing fluorescent green, above).
The company has sold its product to international cosmetics and food companies, and according to Liu another major deal is in the pipeline. It has won a brace of awards: The Clinton Global Initiative, the Lee Kwan Yew Global Business Competition, the HSBC Young Entrepreneur Awards. the Hong Kong Awards for Industries.
Vitargent founder Eric Chen says since word leaked of the Harper investment he's had investors beating a path to his door. Although that sounds like startup hyperbole, VCs are herd animals and that's exactly how they behave. The biggest impact from this could be to put Hong Kong finally on the tech investment map.
You could make a case for the elevator being responsible for the modern world. It has certainly enabled the modern city. But for Elisha Otis' 'safety elevator', we'd still be living in three-storey walkups and urban areas would be vastly smaller.
This is what telecom innovation looks like.
A US startup, 2600hz Mobile, is ready to launch an MVNO with open access and APIs that will allow others to build apps to run on top of it. As the company blog says:
...we’re the first company to basically try to open-source cellular integration. We’re trying to encourage the hackers, the tinkerers, the enthusiasts out there in VoIP to get engaged in the next generation of networks - cellular. We’re trying to give you a way where you don’t have to spend $250,000 to just be able to play around with a test cell phone on your own little mobile network.
With this platform its customers can, for example, combine VoIP and cellular to offer a mobile/WiFi hybrid; create low-cost wireless and fixed VoIP bundles; or offer smart services that help users avoid roaming fees.
Today that's innovation. In five years it will be routine.
Here in China, all of that is impossible and will remain impossible. The idea of opening a network to people without government sanction is a complete non-starter.
As it happens, China is right now trying to introduce an MVNO sector.
A genuinely competitive market would embrace the idea of a network as a giant apps platform. But that's not China. Instead, the new MVNO entrants will have the freedom to offer exactly the same services as the existing infrastructure owners.
For sure, those MVNOs will provide a touch of badly-needed extra competition. But even the most optimistic forecast doesn't expect them to grab more than 1% market share over the next three years.
That's assuming they're allowed to compete. From the limited information available, it looks like they will have to cope with a wholesale price as high as the lowest retail price.
The China Securities Journal reports that the licence shortlist will likely be finalised in October. Which means perhaps the first trials by year-end. We won't hold our breath.
As if to emphasise the air of unreality around China telecoms, a China Mobile honcho last week claimed that WeChat was more of a monopoly than the giant cellco.
Li Zhengmao, a China Mobile vice-president, said that his company wasn’t a monopoly because it had a mere two-thirds of the market. Speaking at a conference, he said WeChat had much a bigger share of the audience in the room than China Mobile.
Peking University economist Zhang Weiying explained to Li that a monopoly is something which the government “allows some people to do, but doesn’t allow others to do."
At least there's no confusion about open access networks. They're off-limits to everyone.