“Sooner or later, there will be a Chinese Steve Jobs!”

By Doris Li, China IP,[Comprehensive Reports]

Ni Guangnan has many titles, such as Researcher at Institute of Computing Technology of Chinese Academy of Sciences, President of Chinese Information Processing Society of China and Academician of Chinese Academy of Engineering. Besides, he has also been Advisor for Beijing Municipal People’s Government, member of the 8th and the 9th Chinese People’s Political Consultative Conference (CPPCC), invited member of the 5th All-China Youth Federation (ACYF) as well as the first Chief Engineer of Lenovo Group which was very much under the spotlight at that time. But no matter how people introduce him, they will never forget an important identity of him—one of the scholars who were the first to do researches in the field of Chinese information processing and pattern recognition. He has proposed and realized the association function in the input of Chinese characters.
 
The knowledge hero
The year 2008 is the 20th anniversary for the founding of Zhongguancun—the dream place for many young men in IT field and the birth place for many enterprises.
 
There has been a famous story in Zhongguancun—“Three entrepreneurs found three scientists and together they founded three famous enterprises.” The story goes like this: Liu Chuanzhi found Ni Guangnan who helped him to develop the Lenovo Chinese card and together they made the Lenovo company successful; Zhang Yufeng found Wang Xuan who helped him to develop the Founder laser typesetting system and together they made the Founder company successful; Wan Runnan found Wang Jizhi who helped him to develop the Stone typewriter and together they made the Stone company successful. At present, the scientists are no longer in these companies, but their innovative achievements are shining more brightly than the glory of the enterprises.
 
In his essay The Journey of a Scientist, Ni Guangnan wrote with lamentation: “My labour has been devoted to the development of large-scale computers; my sweats have changed into national achievements in scientific research; my numerous successes in scientific and technological research have won many awards in the Chinese Academy of Sciences. The pity is that all these achievements are still harbored in the certificates of commendation. They have not yet become actual products.”
 
“I promise to transfor m all your research achievements into products!” Liu Chuanzhi promoted the realization of Ni Guangnan’s dreams. However, this has also become the prelude for the “Great Dispute between Liu and Ni.”
 
China IP: You have experienced many “disputes” with the Lenovo Group. What do you think is the best way of cooperation between entrepreneurs and scientists in order to better realize a “joint development?”
 
Ni Guangnan: There is a record of the process of establishing the Lenovo Group on the website of the Institute of Computing Technology (ICT) of Chinese Academy of Sciences: in 1984, the ICT New Technology Development Co., Ltd. was founded, which was the predecessor of the Lenovo Group. The company transformed the scientific research achievement of Lenovo Chinese computer system into Lenovo Chinese card, which was the major product of the company sold in the market during the stage of establishing the business. The management system of the enterprise is a coordinated process of scientific research, development, production and sales. The profit of the first three years for Lenovo Chinese card (including tax refund) was 12.37 million yuan, which was several hundred times more than the investment and organization costs for offices and laboratories, the sum of which was about 200,000 yuan. According to the Administrative Regulations on Intellectual Property Protection in Universities and Colleges issued in 1998 by the Ministry of Education, “In order to promote the industrialization of scientific and technological achievements, if the creator(s) has/have industrialized his/their service invention or service technical achievement, with the permission of the university or college, the creator(s) can be awarded no less than 30% of the revenue from such transformations.” Therefore, the developers ought to have a large percent of stock equities of the Lenovo Group. However, the “stock rights” of Lenovo have completely deprived them of their rights and interests. Now in the propaganda of Lenovo, they have omitted the ICT which was actually one of the founders of the enterprise. And ICT’s 100% stock rights were swapped as well, not to mention the stock rights of the service inventors.
 
In fact, what further froze the hearts of the technical entrepreneurs is a wide-spread “theory” about “the dispute between entrepreneurs and scientists” in high-tech enterprises. The vital part of this “theory” is: the “entrepreneurs” who know about management might drive away those “scientists” who know nothing about the market and work blindly behind closed doors. This is actually a groundless accusation. Benefit is the only standard for checking whether an entrepreneur understands the market or not. It is proved through practice that products invented by scientists and engineers can create great benefits. Lenovo’s success is based on the development of the Lenovo Chinese character system, not the catchphrases like “high in quality and competitive in price.” In high-tech enterprises, the distinction between “entrepreneurs” and “scientists” is actually a pseudo-proposition. In real high-tech enterprises, if there are “connoisseurs,” they can be collectively called “entrepreneurs.” At the beginning of China’s reform and opening up, the dispute between “scientists” and “enterprises” in “high-tech enterprises,” which were founded by research institutes and universities and owned by the entire people, is a phenomenon in this special phase of development.
 
Changes in the past ten years
On September 10th, 1999, the “Lenovo Halo” was taken off from Ni Guangnan, but the dream was still there in his heart. No matter what happens, it never stops. And the ending seems to be predestined in his “fate.”
 
The year 2000 witnessed many changes in China. In order to join the WTO, China accumulated great strength for the bidding, and developing the high-tech industry was an important part of “The 10th Five- Year Plan.”
 
China IP: The past decade was called the golden decade for the development of the software industry, which was also the decade of China’s accession to the WTO. How do you comment on the changes occurred in related areas both at home and abroad?
 
Ni Guangnan: Before the year 2000, China’s software industry is not really an industry. Actually, the software industry became a larger and larger independent industry only in the PC and internet age.
 
During the past decade, the revenue of the software and information service industry increased 17.8 times to about 1.37 trillion yuan, and the average annual growth was 38%. Its percentage in the electronic information industry has increased from 6% to 18%, and the number of employees in this industry has increased from less than 300,000 to over 3 million. The percentage in the world software and information service industry has also increased from less than 5% to over 15%.
 
The software industry is a representative of the knowledge-intensive and technology-intensive high-tech industries. Innovation is the root motive while talents are the core resources for the development of this industry. Therefore, the most important thing for the development of the software industry is the innovation of the human mind, i.e. the innovation of man and the creation of man.
 
The important thing is: 1+1>2
The software industry of China got involved in the great wave of merger in recent years. Some multinational companies have great strength of innovation, and their researchers have won Nobel Prizes. Most of the Chinese enterprises in this industry are SMEs. Only a few enterprises such as Huawei can be compared to the large enterprises abroad. The R&D investments in Chinese enterprises are low, which checks the development of their innovative abilities. There are both subjective and objective reasons for this phenomenon and the objective one is the low profit rate in many Chinese enterprises.
 
China IP: Many domestic software enterprises are beginning to purchase foreign enterprises for development. Do you agree with their way of development? What are the benefits and drawbacks?
 
Ni Guangnan: Acquisition and merger are ways to enlarge and strengthen enterprises. If an acquisition or merger can optimize the resources of both enterprises and integrate the enterprise cultures, the effect can be 1+1>2. However, failure in this can also be quite troublesome. It is a progress for Chinese software enterprises to purchase foreign ones, but the core technologies of enterprises must be the accumulations of many years of researches by the enterprises themselves. In the purchases, the key is also whether a purchase concerns the core technologies or not. Therefore, we should keep in mind clearly that purchasing foreign enterprises is not the only way for development; nor is it a way to obtain the core technologies of the enterprises.
 
China IP: What’s your opinion about the development of the Internet of Things? How should Chinese enterprises react to this development?
 
Ni Guangnan: Try to imagine that in the future, human beings and everything in the world are linked together by a type of “Internet”, and this “Internet of Things” will almost become omnipresent. Many countries have been promoting the development of the Internet of Things with great strength in recent years. The core technologies of the Internet of Things will be perfected through demo application, and at the same time its standards and criteria will also be established. Generally speaking, China has just begun its process of establishing the Internet of Things. Many key technologies are in the process of R&D such as the coding and marking at the foundation level, the automatic identification technology and all kinds of sensor (including the new sensor based on the Micro-Electro-Mechanical Systems(MEMS) technique) technologies required by the information collection level, all kinds of communication (short distance, long distance, cable, wireless, etc.) and networking technologies at the internet level and the application technologies related to different fields at the top level.
 
At present, projects such as the smart grid, Automobile Internet of Things, E-Home, food safety and so on can all become demo applications for the Internet of Things. In the age of the Internet of Things, business models will become more and more important. In some situations, the innovation of business model will even become the primary factor for commercial success. Practice has proved that the traditional model for making a profit through selling software and hardware will gradually be replaced by new business models such as service models, advertisements and other operations.
 
The knowledge war has already begun
Cloud computing has provided a new chance for Chinese enterprises. Are they prepared to get on this bus? There are many kinds of cloud facilities: smart phone, tablet PC, smart TV, PC and so on can all become cloud facilities. The cloud facilities are not extensions of PC, but a new generation of information appliance.
 
China IP: At present, “cloud computing” is a hot topic in the software industry. However, this concept still has not a clear definition. What on earth is the “cloud”? What changes will it bring to our lives? How can the Chinese enterprises take advantage of this chance and further develop themselves?
 
Ni Guangnan: Cloud computing is not a speculation. It is the inevitable trend of development. China has the largest number of netizens and mobile users in the world as well as large amounts of sci-tech human resources. China will in no way miss the chance to develop its science and technology and the industry through promoting the cloud computing.
 
The motivation for the development of the cloud computing is the market demand and the development of technology. Besides, the increasing social requirement for energy-efficient and environment friendly development and g reen IT has also promoted the development of the cloud computing.
 
It is not only a new information system structure, but also a new application and business model. Since the cloud computing is a new trend, China and the developed countries are now almost at the same starting line in this field. The good thing is that China has no burdens, so it is more willing to take reforms and introduce new technologies and new models, which has become its late-mover advantage. If China can bring these advantages into full play, the Chinese enterprises will have a large space to realize their own achievements.
 
How the cloud computing is realized on earth? When we compare cloud computing with common network computing, their most obvious difference is that cloud computing has special support software, which is its key technology. In the huge future eco-system of the cloud computing industry, Chinese enterprises will have many kinds of new opportunities for development.
 
There will surely be a Chinese Steve Jobs
The American Silicon Valley has become the breeding ground for innovation because there is “soil” suitable for such innovations. In China, though many international R&D enterprises are eyeing for the Chinese market, the Chinese enterprises haven’t paid enough attention to their innovative abilities. Many enterprises were at the low end of the industry chain, and now they need to change their way of development. Confidence and patience in the cultivation of the innovative abilities are important factors for the future development of the Chinese enterprises.
 
China IP: The passing away of Steve Jobs has aroused the great discussion about the question “when China will have its own Steve Jobs.” Many people think it a very difficult thing for China. What’s your opinion on the cultivation of innovative talents in China?
 
Ni Guangnan: As to the innovative contribution to mankind, what Yuan Longping has contributed is no less than Steve Jobs. But now, there is no such talent as Jobs in Chinese enterprises. Though Wang Xuan is the innovative pioneer in the IT field of China, his influence is mainly in the printing industry. The reasons for the lack of innovations in Chinese enterprises might be found in what they are going after and their surroundings.
 
What are the Chinese enterprises going after? If the SMEs are doing whatever can make money when struggling for survival, the large enterprises, especially the large high-tech enterprises, with plenty of financial and policy supports, should not be doing the same thing as the SMEs. Many enterprises have abruptly changed their mode of development after they achieved their first success through innovative technology or products, i.e. from “technology— production—trade” mode of development to the mode of “trade—production—technology.” These abrupt turnings are worth further reflection for Chinese enterprises.
 
Steve Jobs believed that his purpose was never to win business, but to create great products. Just as he has said, “My passion has been to build an enduring company where people were motivated to make great products. Everything else was secondary. The products, not the profits, were the motivation.” If some day a Chinese enterprise can proudly say that the most important thing is not profit but innovation, it won’t be far to see a new Steve Jobs of China!
 
(Translated by Snow Li)
 

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