From imitation to innovation: How China became a tech superpower

 

In late October 2017, when I went to visit Kai-Fu Lee, China’s premiere artificial intelligence (AI)-focused venture capitalist, I entered his office complex from the back side of the building. Mistakenly, I took a wrong elevator and, as if tripping through a wormhole, briefly found myself in the Beijing of the past century.

In the early 2000s, this corner of Zhongguancun – the area of northern Beijing now often referred to as China’s Silicon Valley – was mostly famous for its sprawling electronics markets. There were several high-rise buildings, in which you could roam vast open floors connected by narrow escalators and packed with stalls selling everything from cameras to TVs, DVD players to toasters, dancing Santas to neon dildos. Some items were made by major, household brands such as Samsung, Nokia, and Canon; many more of them were knock-off products, with names creatively similar to the “real” thing. Most of the time, the electronics were assembled in China; almost never were they invented in China. This image is still deeply ingrained in the western imagination – that of the industrious “copycat” nation.

But a few years ago, China’s leaders decided they wanted the country to be known for a new kind of electronics– not only “Made in China”, but “Designed in China”. The authorities can’t exactly whip up innovation by decree, but the local government can influence real estate – and through a series of incentives and edicts, it began swapping out tenants. Many of the cheap electronics vendors packed up their boxes, while new technology businesses moved into refurbished office spaces: startups, investors and even patent attorneys.

There are still some hold-outs here, and many of the lobbies remain under construction, so it’s easy to slip into an older lift, as I did, and find yourself unexpectedly surrounded by beige keyboards and LaserJet printers. But these juxtapositions also remind you of just how quickly China is changing. “Often, I meet people in Silicon Valley who still think all China can do is clone their ideas, but that’s backwards. Now I see more western companies copying China,” says Rui Ma, an early-stage investor who works between China and Silicon Valley.

For now, these worlds co-exist: China past and China future. But increasingly, the one the rest of the world will pay attention to is not the factory-and-warehouse-floor aspect of China, but the new entrepreneur-driven China that is poised to reshape at least some facets of our common global technology future – with growing strength in fields ranging from artificial intelligence to genomics to drones. And that’s why I went to meet with Kai-Fu Lee.

Lee, founder and CEO of Sinovation Ventures, is one of Zhongguancun’s most famous tenants. With a shock of thick black hair and rimless spectacles, the 56-year-old computer scientist is energetic, intense and affable. He is fluent in both Mandarin and English, and equally capable navigating both Chinese business culture and the PowerPoints of western offices. Today, his venture firm scouts, invests in and mentors several of China’s most promising technology startups – from driverless-car software designer Momenta to facial-recognition scanner Face++ to online-tutoring juggernaut VIPKID – but this isn’t the Taiwan-born investor’s first professional incarnation.

Lee’s career has roughly followed, and sometimes helped lead, global technology’s shifting centre of gravity. As a PhD student at Carnegie Mellon University in the 1980s, he honed early machine-learning programs for continuous speech recognition, long before corporate titans thought AI could have industrial relevance. Next, Lee laboured in Silicon Valley for Apple Computer, as a principal research scientist. He later worked in China for US tech giants – first Microsoft, then Google – before launching his own early-stage venture firm in Beijing in 2009, to concentrate on mentoring a new generation of Chinese entrepreneurs, particularly those focused on AI.

One of the world’s few truly bi-cultural rock-star technologists, Lee could choose to work anywhere in the world, but right now he sees the most possibilities in China – due to the vast scale of the market, new infusions of capital and the scrappy determination he admires among China’s current crop of startups: “The entrepreneurial spirit here is very fast-evolving, try-everything, move-quickly and with a lot of hunger – this will push the commercialisation of scientific research forward.” Read more…

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