Chinese Enterprises Focus More On Business Than R&D

摘要: Chinese enterprises in general focus more on making money instead of developing new technologies, which makes it seem like gaining profits has become their sole purpose. The worst part is, these enterprises are short-sighted and they only see short term profit. They don’t show enough respect to researchers and developers, which generated great problems.

(Chinese Version)

Chinese enterprises focus more on profits instead of R&D

In the past three decades, China has achieved tremendous success in economic development and numerous great enterprises were born. Some of these enterprises now have a total profit of over tens of billions, some have made it to be listed on NYSE. Some of the companies’ founders are now the richest people in Asia. Many people now can even just host a virtual fashion show and make a considerable amount of money. Anyhow, China no doubt has lots of elite businessmen who have mastered the art of making profits. These successful businessmen are also well respected in the Chinese society.

It’s true though, that every company’s ultimate goal is to make profits and that material decides consciousness. Only when we have enough “food” to sustain ourselves will we be able to work. But the problem is, the business scene in China, which is all about money, makes money making the sole purpose of many enterprises. The worst part is, these enterprises are short-sighted and they only see short term profit. They don’t show enough respect to researchers and developers, which generated great problems.

It’s known to all that developing new technologies is never an easy job. Technological breakthroughs in any area require hard work and come with unimaginable setbacks and frequent failures. Usually researchers and developers need to spend years in the lab or in the field to make any progress. That’s why Einstein’s hair always looked so messy on pictures. He’s just too busy to care. Despite his appearance, no one can deny what he had done for the mankind. His theory of relativity has a ever-lasting impact on our society and it’s possible one of the most important theories through out history, whether it’s in the past or the future. His contribution is 50 times greater than that of all the businessmen in history combined.

As a matter of fact, businessmen weren’t well respected in the past either. In ancient China, businessmen were ranked as the last in the four classes, which were scholars, farmers, craftsmen, and businessmen. The rulers all thought that these businessmen only transported goods from the wild south to the north, and that they didn’t really contribute anything to the nation. Past Chinese rulers’ opinion about businessmen was indeed extreme, but still they had a point. Businessmen’s contribution to society could never be comparable to that of workers in agriculture, industry, and technology. The problem here is that businessmen know how capital works, and they know how to make money fast. It happens that many parts of China are still considered as poor and people long for becoming rich overnight. The longing for economic growth and quick money in this country has surpassed the curiosity for science and technology. Gradually Chinese enterprises and even the whole Chinese society now only see money as the only indicator to measure success.

Additionally, R&D is just too much hard work. It’s not something that young people will want for their career of life. Instead, they prefer to launch startup projects, which could probably get them rich overnight, giving others the impression that they have become extremely successful. It’s a shortcut towards wealth and respect. But of course, it could also be a dead end. And unfortunately, more and more Chinese enterprises are entering paths leading to a dead end. Even though they want to turn back now, it will be impossible for them to do so.

The phone industry in China is a grand game of capital

When we talk about combing capital with technology, we tend to think the cell phone industry would be the perfect example of a great combination. The reality is that only enterprises that have enough capital and technological capability can make good cell phones. Current phone giants all fit this characteristic. They all emphasizes a lot on R&D. As for making money, well, it’s more like a natural development for these companies. But Chinese phone makers are not paying enough attention to R&D. If we take a clear look at the accomplishment that Chinese phones have made and that of the western brands, we will understand that respecting science and technology will really be a game-changer.

Motorola is probably the very first phone maker in the field. It’s the earliest company that possessed GSM technology and the company that launched the first communication satellite. In the 80s, they had participated in almost every part of phone’ development, including designing their own phones, defining phone’s functions, designing and making chips, and even core communication components like base bands were designed and manufactured by themselves.

What’s more, Motorola also achieved industrial design, physical design, production and processing and wireless network testing etc. using its own system. Such development cycles usually last for 1~2 years. But since Motorola was the only company that had these crucial technologies, it just didn’t matter how long it would take for them to complete the R&D cycle. However, as other companies also got hands on relevant technologies and the competition in the market became fierce, the international division of labor and production of the phone industry started to take place. What will never change is that the dominating companies will always be those that have crucial and advanced technologies. No matter how much capital one company has, without cutting-edge technology it will still go down eventually.

Take the copycat wave in 2008 for example. Most capital that was poured into the market was fast and hot money. And a majority of CEOs at that time were actually celebrities, coal mine owners, and even usury givers etc. who generally had tons of money but didn’t really know about technologies, let alone predicting the future trend of smart phones. The only thing we can regard as technical is probably the assembly lines they had built. But as for more technical stuff such as chips, design, and patents etc., they just use money to buy them but never want to develop them on their own. So the copycat version of phones was not really a part of the phone industry, but rather just a grand game of capital. It’s pure business.

These copycats did allow many people to make mad money. But the thing is the very nature of this business determined that it wouldn’t last long. After the very first iPhone was launched, the whole copycat industry was devastated. These copying companies couldn’t even put up a fight before collapsing. In Shenzhen, the area that was once occupied by phone factories is now a deserted place, with grass growing high. The leading and once copying company MediaTek.Inc now is one of the top three smart phone processor providers in the world. And naturally, its main clients are from the Chinese mainland.

In the past two years, Chinese smart phone brands have been making significant progress and have received quite a reputation, becoming an emerging power besides Apple and Samsung. However, due to the lack of core technology patents and the capability to develop hardware, the phone industry in China is actually not as prominent as it seems to be. In reality, except for giants like Huawei, ZTE, and Lenovo etc. that really focus on developing new technologies and pour in a huge amount of investment in R&D, most Chinese phone makers’ sole purpose is to make money. The mentality here is that they are thinking as businessmen, but not innovators or developers who they are supposed to be.

MTK’s lowly priced products and Android’s open source allow phone industry’s thresholds to become lower and lower, which gives Chinese businessmen a great opportunity. Similar to the copycat wave in the past, capital pours in intensively. For instance, Internet giants in this country never waste any chance to be part of something that really makes money. Almost every Internet company has more or less participated in the phone industry but only very few of them can survive the fierce competition. They wanted to dominate the hardware to dominate the Internet entry points. But later the outcome was disappointing, then they turned to smart appliances such as refrigerators, televisions, and air conditions etc. The result however, was not satisfying enough either. These companies are no doubt the leading figures in their respective industry, but due to the lack of understanding of smart phone technologies, it’s not surprising that they failed in the end. It just seems that everyone wants to make something out of some lucrative industry but they just don’t understand the market at all, let alone the technologies behind it.

Respect technology, respect the future

In fact, besides the phone industry, many other industries in China are also suffering from continuous conflict of interest. When everybody is pursuing over money, it’s natural for the crowd to neglect scientists who are seemingly doing something great but won’t cash in in a short term. The 360 VS Tencent war 5 years ago was a complete joke worldwide and there were many more similar farces. For instance, we have witnessed the battle between PPS and PPTV in earlier time, and recently we have experienced the incredible subsidy war of Dididache and Kuaididache. On high-end forums for example, users mostly discuss topics about business and money. We seldom hear that some enterprises are fighting over a technology or something like that. It appears that money is all that matters.

However, industry leaders such as Apple, Google, and Microsoft etc. always put research and development as their priority before planning to cash in. For example, Apple gave up the chance to pull out some commercial stunt for the fact that GATA sapphire was not hard enough. Google and Microsoft both invest tons of money in supporting an R&D department of their own that dedicate to making science fiction a reality. The great dream of changing the world is something that Chinese enterprises have been short on. What we want to change is the deposit of our bank accounts.

Science and technology are the fundamental force that pushes the development of society. In a health corporal structure technology decides business interest. And business interest can actually push the development of technologies. For example, Huawei, the leading Chinese telecommunication company, has been conducting R&D on its own area and has attained many patents on telecommunication, which allow them to have great commercial success in telecom equipment industry and terminal network sector. The best part is that the company is willing to put 10% of its profit in supporting R&D.

To form a mentality on R&D like Apple and Huawei did is not an easy challenge. It requires generations of efforts and the right opportunities. However Chinese enterprises can start to change the corporal culture from now on and let technical workers and truly intelligent and innovative talents have the respect and salary they deserve. There are multiple ways to do so. For instance enterprises can establish a clear mechanism that encourages staff’s curiosity in order to empower their creativity instead of letting the old and rotten corporal system, endless business and even political conflict continue to plague the company and suppress innovation.

Furthermore, companies should never content with minor innovations but continue to advance. The so-called minor innovations are just some copied version of other innovations but with another name. If companies are still willing to drown in a sea of self-satisfaction, then they would never have a voice of their own. At last, I wish that society will grow to respect scientists more and we will see more dedicated researchers and scientists in fields that face consumers. I truly wish that one day, the general public will learn to admire scientists instead of celebrities. After all, at the end of the day, it’s science that drives our society forward.

[The article is published and edited with authorization from the author @Constantine, please note source and hyperlink when reproduce.]

Translated by Garrett Lee (Senior Translator at ECHO), working for TMTpost.




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