Industrial incubators are playing a crucial role inside the economic growth pattern that is taking part all over China, especially in the municipality of Chongqing in the last few years. In fact, as we have already discussed in other previous issues, the theme of industrial and technological innovation has become a pivotal concept for the development of Chongqing.
Nowadays, the most important and concrete example of this new choice of economic growth in Chongqing can be detected in the recent development of the Liangjiang New Area. The area is the third national development and opening zone in China approved by the State Council (after Shanghai Pudong and Tianjin Binhai) and includes three administrative districs – Jiangbei, Beibei and Yubei, and covers an area of 1200 square kilometers. Liangjiang tends not only to serve the West China market, but also the global market, attracting international investment and opening up platform and incubators to establish and open a new industry system.
Alongside Liangjiang New area per se, the municipality of Chongqing hosts many realities of platforms and incubators. We have decided to explore and deepen the reality of some of the industrial incubators in the Municipality Chongqing, localized just inside the administrative districts included in Liangjiang area. Thanks to two PhD students of Chongqing University (CEBA) we got the chance to visit two modern incubators, specialized in medical and health field: Cosmo Work and Health Work.
2. First incubator: COSMO WORK 成长工场
Cosmo Work成长工场 was established in 2013 and is now located in Jiangbei district in Chongqing. It is property of a Real Estate company located in Beijing and Shanghai which owns 1 thousand million square meters, from where they gain 100 million RMB that they have re-invested in the incubator. It is set up as a cluster of entrepreneurial and employment incubator and provider of professional services to more than 250 small and medium enterprises. Among these, at least 78 of them operate in medical and health field and 8 of these are already on the market.
Mr Pan, the director of the structure – who led us in the visit of the complex – was determined to emphasize that their company is the only one whose platform is recognized at national level as an honorary platform. They are provided with an academic committee that chooses and bridges companies and universities. Mr Pan has stressed the importance of the marketizations as a final goal of the services, for this reason they are trying to reduce the importance of the 关系.
However, the interpersonal relations remain still a very important factor, especially at the earliest stages of the process. Mutual trust and honesty, in fact, remain at the basis of the building team process. Actually, one of the first services provided by the incubator is the networking process: seminars and meetings, trying to match common needs of their clients. What is interesting is that the incubator does not earn from the networking stage. So, how do they earn money?
The incubator follows its own business model, that Mr. Pan has minutely reported to us:
- Explore opportunity on the market
- Business Plan
- Building the team (both professional and business)
- Investment (direct from the incubator or they look for other investment)
- Financing It’s only at this stage that they also became shareholder, and that’s is how they gain money.
They operate at 3 levels:
- providing facilities (renting offices to the companies)
- providing facilities and financial support
- investing (money from the incubator)
Usually, during the first stages, the incubator uses private money. Mr. Pan asserted that it is possible to attract other kind of capital (government funds + planning to attract foreign investment) only in the most advanced stages.
According to Mr Pan there are lots of challenges and difficulties: the trickiest part is exploring the market opportunities. Collecting information about the market demand takes time, from 9 to 12 months.
Another challenging part is the team building: meetings and seminars usually host more than 200 people. In this situation it is hard to find the right person (target), that shares the same value and the willing to follow the same business plan. What is very important, according to Mr. Pan, is the focus on the same goal, from where it is possible to gain share benefits.
That’s why guanxi 关系 are still important, at least at the stage of building team process. For these reasons, the incubator has a specialized professional judgment model (scale method).
Mr Pan introduced an example of one of the company that they have been incubating whose aim is to provide special medical services: “Micro Health” 微健康.
This company concentrates its attention on providing a “private medical service” avoiding all the problems that usually affect the public health system such as long waits.
In this specific case, the service is provided not directly to the customers, but to the members of the company: the purpose of Micro Health is to provide help to institutions in order to build and handle an intelligent health station system, merged with the ability of a group of specialist.
This service aims to provide an easier pattern of medical assistance to a big number of members of institutions, families and ordinary people.
What do they offer 1. Intellectual power 2. Health box material 3. Medical services
The Health Station System, as Mr. Pan as explained, aims to act as a medical consultation facility where each patient can meet through the internet with a doctor who is based in a top-level hospital. The doctor and the patient are able to communicate via webcam through an instant chatting platform.
The doctor can get all the patient’s data and information thanks to machine-operated devices on site. Through this system he can make a diagnosis and prescribe treatment to the patients, that can directly go to the drug store and buy what they need.
Another enterprise that is working through the help of Cosmo Work is “Sevenaryhope”塞文煜和”: this company is working with minerals, especially with graphene, applied to create health product such as hot compress eye patch.
Cosmo work only provide facilities (like offices) and equipment. Their R&D department is located in Henan where they have their own research centre. Funds came from their own company and banks.
3. Second incubator: Health Work重庆健康智谷
The second incubator we visited is Health Work重庆健康智谷 . They define themselves as the first domestic incubator, accelerator, joint office, industrial park, joint office, and healthy town.
It is located in one of the most convenient district of the municipality of Chongqing, 15min from the international airport, 15 minutes from the north train station, in Longshan Road, Yubei district. This is one of the newest area of the city, that was built only 2 years ago, in 2017.
Health work重庆健康智谷 is a comprehensive health sustainable platform: this platform is subordinated to one of the most important Chinese complex of medical industry, Tianyi Group (State owned Enterprise, based in Shanghai), and act as a young brother of one of the biggest physical examination enterprise, Health 100美年大健康.
Health Work, relying on the two-wheel drive of innovative medical technology plus innovative medical services, uses the Chinese health platforms to gather and incubate global innovation resources and form a global medical innovation technology.
Among the reasons why they choose to relocate in Chongqing there are the convenient transportation system and the favourable market. In fact, according to Shusen Li, the operation supervisor of Health work who led us into the visit, the incubator is born from the willing of the government to react at the financial crisis.
The connection with government is very important: it is their first financial source. Second source of financing are the big companies that decide to invest into them through meetings, networking, seminars. The third source of investment is based on their own money, they invest as shareholders of the companies that wants to be incubated (a common model of investment among incubators).
What is interesting is that Health Work does not pay the rent to Tianyi Group, but they must reach the goals that have been set. Heath Work offers services mostly to small and medium enterprises: accounting, property management, rent offices and they also work with private hospital. Health Work has different international contact, especially with ISRAEL: in fact, all the machineries are not Chinese.
It seems that Chinese industrial incubators are playing a key role not only for the economic growth but also for the increasing of the well-being of Chinese citizens.
The acceleration of the technological progress, especially in the field of information technology and connectivity, has ensured a push towards digitization also at the health level.
Our visit to the health incubators suggests that the digital innovation is definitely involved in the process of finding a solution to the problems that are currently affecting the Chinese sanitary public system and that the growth and the expansion of internet medical services in China could push towards a new direction for the future health care.
Article written by Fabiana Rita De Carlo (Programme Manager Confucius Institute of Pisa) and Antonio Crupi ( Post-doctoral researcher at the Scuola Superiore Sant’Anna in Pisa)