China, long considered as the “factory of the world”, now aims to become the “laboratory of the world”, where technologies of tomorrow will emerge. Supported by major governmental programs, initiatives of open innovation pop out as illustrated by the high density of incubators and support structures in Beijing, Shanghai and Guangzhou. However, this strategy is still recent. According to Forbes magazine, less than half of the Chinese companies in the World Top 150 Biggest Companies, quoted open innovation initiatives in their annual reports between 2009 and 2013, excepted Lenovo and Haier. Let’s dive in some open innovation models in China…
Open innovation from startups
In 2010, Lenovo created its first investment funds, Lefund, with 100 million dollars. According to its website, Lefund’s portfolio is composed of 56 startups. Among them, iDreamsky, a Chinese videogame startup is now publicly listed, Face++ is an Israeli startup in facial recognition and Nok Nok is specialized in biometry. This first success encouraged Lenovo to create a second fund with 500 million dollars in 2016 in the hot topics of cloud computing, big data, artificial intelligence, robotics and Internet services. On the other hand, startups that are not supported by these funds can use Lenovo’s collaboration platform where Lenovo share its software and hardware resources to support collaboration. Three co-developed products have been put on the market in 2014: glasses (new glass), an air purifier (new air) and a wireless router (newifi).
Open innovation from users
The smart objects startup Xiaomi chose to develop the “suggestion box” based on ideas proposed by its loyal community of users, the “Mi Fans”. This community originated from the first users of the MIUI interface developed for smartphones, even before the launch of the first smartphone from the brand. New versions of MIUI integrating the suggestions of customers were released on fixed day and time every week until the launch of the first Xiaomi smartphone. This strategy helped the company to get an identity by creating expectation as well as a customer base of 300000 people. For example in India, Mi Fans listed choice options of voice menus of different services on Xiaomi’s dedicated forum. The company used this list to create a navigation menu so that Indian users can browse options directly from MIUI’s interface instead of waiting on the phone. The growing community of Mi Fans is a source of ideas that the brand uses to closely match its customers’ expectations. In 2016, this community was composed of 190 million users.
Open innovation from an ecosystem
Based on an even larger concept than community of users, the multinational in consumer goods and appliances Haier created a portal of exchanges of technologies and innovation. The HOPE (Haier Open Innovation Ecosystem) Platform connects companies and research centers specialized in Haier’s fields of interest. Users of this platform can post or answer technical or technological problems met in their activities, in order to develop a solution in collaboration. For example, in 2013, after a comment detected in a microblog, Haier’s R&D team posted a topic on conservation methods to keep spinach fresh for 7 days. Five technical suppliers, who were sometimes confronted to similar problems, offered solutions. Two of them were selected to develop a solution in collaboration with Haier’s R&D department. This one-year process resulted in a new fridge model.
Involvement of French multinationals
French multinationals located in China also launched initiatives of open innovation. In 2010, Air Liquide signed a cooperation agreement with Zhejiang University, one the best Chinese universities, in order to create a joint laboratory for the development of new combustion solutions. In 2015, Michelin invested in Luli, a carpool startup, in the framework of its incubation program. On the digital field, Axa Lab is located in Shanghai since 2016 to detect emerging trends for the group and its clients. More than 500 startups have been met in less than a year, resulting in signing some partnerships.
Since the end of 2018, Erdyn is developing an innovation and open innovation network in China. If you need support in scouting innovative companies or startups, feel free to contact us.