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| Interview with Zhang Yaqin, managing director of Microsoft Research Asia |
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Y (Yang Fuqing): Hello and welcome to Dialogue. I am Yang Fuqing. Zhongguancun in the northwestern part of Beijing is dubbed China’s Silicon Valley. It is home to more than 10,000 hi-tech companies and the largest hi-tech center in China. But can it live up to its reputation as China’s Silicon Valley? What are the challenges Zhongguancun are facing? To discuss these and other issues, we’re joined by Zhang Yaqin, managing director of Microsoft Research Asia. Thank you for joining us, Doctor Zhang.
Microsoft Research Asia is one of the only two overseas research centers of Microsoft. So why does Microsoft choose Beijing?
Z (Zhang Yaqin, managing director of Microsoft Research Asia): You know Microsoft Research Asia is the basic research center of Microsoft in Asia-Pacific region. So we are one of the three global research centers for the company, and one of the two overseas research centers. Back three years ago, we were looking at why to cite this basic research facility in Asia. We really looked at a number of countries. We looked at Japan, India and Korea. And eventually we chose Beijing. In fact, Bill Gates visited a number of countries and universities. He was quite impressed with the quality and talents of the students, the enthusiasm and passion of people here. Obviously, China is one of the most dynamic places in the world in terms of its economy and velocity of growth. But it’s really the quality and talents that captured the mind of Bill Gates and made sure we had Beijing as the place for R&D.
Y: Does this also show that Microsoft has very much confidence in Zhongguancun’s development environment?
Z: Absolutely. If you look at the talents we have, you’ll see about 20% of them come from other countries or once educated in the US, Japan and Europe. But 80% people are from Beida, Tsinghua or other top universities of China. That’s really the most valuable aspect of this place - the high concentration of smart people. I think that will continue to be the greatest strength of Zhongguancun. It is a place to attract the best and collect the brightest.
Y: Is Zhongguancun the right place to start up with for overseas Chinese talents like you?
Z: Absolutely. If you want to do business or trade, it might not be the best place. But if you are serious about doing research and technological innovation and want to build a hi-tech start-up, this is the right place. It has a lot of talents, a large amount of available capital and communication infrastructure. And also the most important is the entrepreneur spirit that attracts all kinds of people coming to this place.
Y: Zhongguancun is called the Silicon Valley of China - at least that’s what Zhongguancun wants to be - but there is quite a lot criticism and skepticism about Zhongguancun’s role as the Silicon Valley of China. And many accused that Zhongguancun is nothing but a place for a very small peddler setting. So how things have improved over the years?
Z: Indeed, back 20 years when we started, things were … But things have really completely changed over the past ten years. If you look at Zhongguancun today, it’s really a symbol and icon of hi-tech center for China. In fact, it also received tremendous recognition from all over the world. When I travel to Japan and the US, people talk about Zhongguancun, talk about Zhongguancun phenomenon. The key development over the past few years is the concentration of talents. It is not only a place to produce a large amount of top-notch students and IT professionals, it is also a place attracting a lot of people from all over the world.
Y: But is there a brain drain happening in Zhongguancun? There are a lot of talents working for small and medium sized companies tend to work for big companies like Microsoft.
Z: Well, if you look at the overall flow of talents, it has to be both-way. On the one hand, you see a lot of people go to the US, join international companies. On the other hand, you see a lot of people coming back from other countries and people once worked for international companies start their own companies. I think this is the very essence of technology center. It’s a place where you see a tremendous flow of people.
Y: So Zhongguancun needs this flow of talents and we needn’t be afraid of this.
Z: Yes. I think we should encourage this kind of flow and change. And I believe that over years you’ll see the benefits and strength coming from this kind of flow.
Y: Should Zhongguancun copy the model of the US Silicon Valley?
Z: Silicon Valley is obviously a fascinating story of success, not only in terms of the technological innovation, but also in terms of the move from technology to marketplace. But there are also a number of problems, like the dot-com crash, the traffic jams, and the greed for short-term success. But overall, Silicon Valley has been extremely successful and Zhongguancun should learn from its experience and also take lessons.
Y: For example, the lessons?
Z: I am very much against a model to stimulate high growth at the expense of people’s quality of life.
Y: For Zhongguancun, if it wants to be really successful, there are still a lot of challenges. So what are the challenges Zhongguancun is facing now?
Z: If we look at the whole infrastructure, the people, the whole environment and the capital, I think Zhongguancun has a long way to go. For example, the capital flows. It’s important for the venture capital to get the access into Zhongguancun. I serve in board of directors for a number of companies. On the one hand, the company has a lot of money and doesn’t know where to invest. On the other hand, small companies in Zhongguancun have difficulties in finding capitals. There is no clear communication between two parties.
Y: You mean Zhongguancun lacks some kind of mechanism to attract venture capital.
Z: That’s right. I think the environment here needs to be improved. I received over one hundred business plans last year. And only two or three of them were reasonable. Most of the plans were very dispersed, talking about things even not relevant. I am sure these plans are all very good technologies, but the way to present them is not good. And the other thing is that the companies we have, especially small companies, lack a transparent system for accounting, capital flow and revenue planning. So if you want to receive venture capital, you need a system that is consistent with the international standard in every aspect, and a clear strategy. If I am a venture capitalist, I want to see a clear path for my capital to be cashed out.
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