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Innovate UK

Working with Shanghai and accessing the Chinese market

Posted by: , Posted on: - Categories: Funding, ISCF, Support

We will shortly be announcing the results and successful projects funded through our Industrial Challenge Programmes between the UK and Shanghai. Besides two national competitions we have previously run with China’s central government, and one upcoming on anti-microbial resistance, we are now collaborating on three competitions with three separate innovative provinces in China – Shanghai, Jiangsu and Guangdong.

So, this is by no means our first funding of UK/Chinese company collaborations. However, what particularly excited me about these projects are their innovative approaches to finding business models that benefit the company partners in both countries.  It’s these business models of collaboration that were forged in the proposal writing stage that I discuss below.

Why Shanghai?

Shanghai is considered a leading hub for R&D and innovation in China. It is a global financial centre, transport hub and the world’s busiest container port. With a population of 22.7 million and GDP of £320bn in 2016, it would be the 27th largest country in world by GDP, behind Nigeria if it were not a province within China.  Shanghai has grown astonishingly rapidly and has attracted many large UK companies in China including Astra Zeneca, GSK, Unilever, Jaguar Land Rover, Dyson, KPMG and Deloitte. Its population density is astonishing, over double that of Western Europe and includes high quality talent, an entrepreneurial approach and a willingness to innovate.

China smog and transport - people on cycles and motor cycles, some wearing masks crossing a road on a defined black and white crossing.

Who are we funding?

When I met Shanghai companies on brokering missions to the UK, they were searching for UK companies with good, innovative ideas that they could manufacture at scale rapidly. They talked about UK people being imaginative, able to think differently to vision a different future that Shanghai companies could help accelerate.

It’s very nice that we are seen as innovative, because we are, but what heartened me was meeting innovative Chinese companies, with CEOs who studied in the West, with perfect English and an ability to switch between Chinese and western cultures with ease. Their start-ups were like our start-ups, led by intelligent, imaginative people, with a large number of women innovators. They are willing to take risks and the opportunity of this competition was for UK companies to find good Chinese partners to work with where the benefits would come to both sides.

The competition with Shanghai was open in scope, meaning that any UK business, of any size, in any sector of the economy could apply. But, because of the high quality of applications we received, only the game changing ones have succeeded in getting funding.

Great business models

Business relationships matter everywhere, but even more so in China.  The collaborations we have approved for UK grant funding are building strong foundations for collaborative working over the long haul.  They are a chance for UK companies to partner with existing Chinese businesses to gain access the immense Chinese market.  What has impressed me is the quality of the business models being employed to make sure both business partners can benefit from the collaboration.

The most popular business model was for the UK and Chinese companies to work jointly to develop and demonstrate a UK technology in a new product tailored for applications specific to the Chinese market. This should help the UK partner gain access to the large Chinese market.

China motorways with a backdrop of high rise apartment buildings with trees and a river in the foreground.
Massive investment in infrastructure

For example, the Chinese market for building new infrastructure is vast and railways are vital for the development of a sustainable and clean transport system. InnoTec UK is working with the Shanghai Oriental Maritime Engineering Technology company to develop TrackBot, an advanced automated universal ultrasonic testing system to check the integrity of rails. Trackbot will reduce the number of skilled staff required to inspect the rail networks while at the same time reducing accidents and delays on rail networks.

Similarly, Helia Photonics Ltd and Orion Photonics Ltd are working with Shanghai based Jason Vacuum company on cutting edge optical coatings technologies.  With circa 90% of the worlds optical coatings produced in China, exciting new opportunities exist for future growth in both capital equipment and coated component sales into the Chinese market.

My favourite business model however, is a project funded with Lombard Medical in the UK and their Shanghai partner MicroPort Endovascular who are developing key stent graft technologies to treat aortic aneurysms. Each company is bringing innovative intellectual assets to address abdominal aortic aneurysms, which can be fatal if not treated with surgery. The beauty of this partnership is that the companies bring different technology strengths. It combines the clinical and medical implant skills of Lombard Medical with Microport's expertise in medical device manufacturing technology. They aim to develop a minimally invasive implant that will allow day surgery and rapid return home for patients, significantly faster than the current surgery experience. This will save money for healthcare systems world-wide and allow patients to return home and to a normal life as rapidly as possible. Both companies hope to come away with improved competitive advantage to increase their shares of the global market but for selling into their respective different sectors.

Many opportunities to work with China

Be reassured that we are opening up innovation opportunities across China, recognising the scale and extent of the opportunity there.  More details on other projects we are funding will be released later in the month.  I’ll be tweeting the winners, so follow me on Twitter.

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