G-7 needs more R&D to compete with China – Harry Broadman

 

Harry Broadman

The major economies in the G-7 need more investments in R&D and collaboration in science and technology to compete with China, says former US assistant trade representative Harry Broadman at CNBC. “We’ve done really well among democratic countries collaborating on investment and trade, but we’ve done an extraordinarily poor job in R&D,” he said.

CNBC:

Harry Broadman, managing director and chair of the emerging markets and CFIUS practices at Berkeley Research Group, told CNBC last week that developed countries’ ability to create, execute and sell products that advance the climate agenda without negatively affecting the labor market would shape the economic landscape in the coming years.

“As long as people believe that there is going to be a market for such technologies and that’s going to be dictated by how cheap it is, and whether it destroys jobs or creates jobs — it does not necessarily have to destroy jobs at all — that is going to be the driving imperative, and I think that race is already underway,” Broadman said.

Ahead of the Group of Seven summit in Cornwall, U.K. in June, Broadman, an assistant U.S. trade representative during the Clinton administration, said the group of major economies will need to drastically evolve their research and development and sovereign-to-sovereign science and technology collaborations in order to compete with China.

Broadman is pushing for an “R&D7” to be included on the G-7 agenda, similar to other working groups across members on issues of global importance. Its aim would be to reform the structure underlying the negotiation and execution of international science and technology agreements among G-7 countries. It would also form a stand-alone body tasked with ensuring that these agreements strengthen and recalibrate R&D collaboration within the G-7.

“We’ve done really well among democratic countries collaborating on investment and trade, but we’ve done an extraordinarily poor job in R&D, and this is where China is frankly a huge competitive and potentially a huge economic and maybe geopolitical, threat,” he said.

More at CNBC.

Harry Broadman is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers’ request form.

Are you looking for more innovation experts at the China Speakers Bureau? Do check out this list.

Reasons for Baidu to look abroad - Kaiser Kuo

Kaiser Kuo

China´s internet giants are looking increasingly abroad, not only to find new markets, but also to find new technology and good engineers, says Kaiser Kuo, director international communication at China´s largest search engine Baidu. In Knowledge CKGSB.

Knowledge CKGSB:

Some of Baidu’s recent acquisitions suggest the company is also interested in “studying abroad”—for example, its purchase of a minority stake in the Finnish company IndoorAtlas in September. IndoorAtlas makes a cutting-edge mobile product that allows users to map and navigate indoor spaces. Its President Wibe Wagemans explains how it could enable people to “find a friend indoors. You could find a booth or a product at a conference. You could search for shoes in the mall and it would take you all the way to the actual shelf.”

The technology could have big potential for Baidu, which controls roughly 80% of the mobile search market in China and a little more than half of the market for mobile maps. “We’re looking to introduce that technology into our existing product line,” Kaiser Kuo, Baidu’s Director of International Communications, says of IndoorAtlas...

In other cases, Chinese firms may also seek to tap the talent base and management experience of companies abroad, for example in Baidu’s high-profile investment in an R&D center and artificial intelligence lab in Silicon Valley in 2014. “We want to go where the talent is,” says Kuo. Not every great engineer happens to be located in China. Talent is distributed globally, and R&D should be too.”

More in Knowledge CKGSB.

Kaiser Kuo is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers´ request form.

Are you looking for more experts on innovation at the China Speakers Bureau? Check out this list.    

Related articles

• Android Wear is useless in China, so Baidu just created its own smartwatch OS
• China Is Said To Use Powerful New Weapon To Censor Internet
• Baidu gets into China's booming 2nd-hand car business with $170M investment
• Baidu Company Statistics

Company valuations go through the roof - Marc van der Chijs

+Marc van der Chijs 

China-investor Marc van der Chijs visited Shanghai for a board meeting of Dianrong, a financial internet firm, and summarized a few observations on his weblog. Company valuations are going through the roof and how they start to buy R&D outside China.

Marc van der Chijs:

Company valuations are going through the roof, especially private company valuations. When Tudou raised its first round in late 2005 valuations were probably 10% of what they are now. At one time Tudou raised the largest round ever for a Chinese company, which was $57 million at that time. Now that number is just peanuts and many companies have raised hundreds of millions in later stage rounds. 

Although in Silicon Valley valuations are also extremely high (e.g. Uber @ $40 billion and Snapchat @ $19 billion), I have the feeling that Chinese tech companies tend to get ever higher valuations based on the same numbers. I have no data on this, but that’s just what I hear when talking to local VCs. One reason may be that the Chinese market is potentially much bigger than the US market, although most Chinese have a lot less earning power. And for Chinese companies it may be easier to go abroad (with the right management teams) than it is for US companies to enter China. 

A relatively new trend is that Chinese companies are now actively buying R&D from outside China. With growth rates going down to about 7% this year they need to find other ways to grow faster, and foreign intellectual property is a good investment for that. We see it a lot at CrossPacific Capital and several of our portfolio companies are in discussions with Chinese buyers. Chinese companies are especially looking for companies that can deliver revenue right away, so products that can immediately be integrated or sold in China. 

The valuation of these companies mainly depends on the current product portfolio and less on the value of the IP for future products. Chinese business men want to see results now, nobody knows what will happen in 4-5 years so that’s less important. Generally valuations for these companies are a lot higher in China than in North America, meaning that if you can identify the right products or technology you can make a good return on your investment. However, valuations are not as high as Chinese Internet and tech companies.

More impressions at Marc van der Chijs´ weblog.

Marc van der Chijs is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers´ request form.

Are you looking for more internet experts at the China Speakers Bureau? Do check out this list.  

Related articles

• How Facebook Makes Money in a Country Where It's Banned
• China's Youku Tudou Reports Bigger Than Expected Loss
• Tesla still optimistic in the Chinese market after downsizing
• China is getting ahead. Can the rest of the world keep up?
• Tencent shares outperform rivals in Q1