SUZHOU, China--(EON: Enhanced Online News)--Known as a center of scholarly excellence since the Ming Dynasty almost a thousand years ago, Suzhou sees its modern prosperity also owing a debt to knowledge – much of it in the realms of science and engineering.
“This is very critical for nanotech, especially for the transfer of technology to the final product. It will also help with commercialization. We will buy patents from universities and institutes and then operate the patent for some projects. It'll be very important for Nanopolis as a forward-thinking incubator”
At the core of this is the Suzhou Industrial Park (SIP), a joint program between China and Singapore, and in recent years it has undergone an impressive transformation.
The park initially focused on manufacturing, but its leaders knew well that the real gains were to be made in innovation rather than just making products designed elsewhere.
Furthermore, the development of China's own supply chain and education system – creating efficiencies and boosting the supply of well-educated graduates – along with the emergence of China itself as a booming market meant SIP could become what its leaders referred to as a “generation 2.5” industrial park that was moving away from manufacturing and into services and high-tech innovation.
The financial crisis, which hit export revenues particularly hard, accelerated this change.
SIP is pioneering a path that China as a whole hopes to emulate by shifting its economy away from low-end manufacturing and up the value chain.
"Innovation is increasingly becoming a critical element of international firms success in China," says experienced China watcher James R.F. Berkeley, founder of the London-based advisory firm Ellice Consulting. "But successful navigating the 'growth path' in China requires politicians and business leaders to immediately address four key growth environment issues: better social equality, build better infrastructure, encourage freedom, and preserve the environment."
These are principles that SIP has been able to follow since its inception in 1994 – alongside creating an infrastructure for manufacturing, it also focused on urban development.
It built attractive subsidized housing, shopping, arts and entertainment centers, landscaped areas such as Jinji Lake for leisure activities and even a ferris wheel, all to help attract the kind of talent that powers innovation.
SIP executives continue to travel to Singapore to study its urban management policies.
"What differentiates us? Mindset – we are pro-business, pro-people. We have also gained experience on how to develop through industrialization and into innovation," says SIP Chairman Yang Zhiping.
Having got the physical environment right, SIP is aiming to nurture new firms with fresh ideas.
SIP's BioBay project is one such initiative, with over 340 incubator start-ups looking to develop in areas such as life sciences, biotechnology and pharmaceuticals.
"We are trying to build a cluster and community so that the companies can prosper and benefit together," says Liu Yuwen, BioBay's CEO.
Many of BioBay's tenants have seen huge growth thanks to this approach.
"We've tremendously benefited from the cluster here and in BioBay alone we have over 30 patron companies -- and they are still on the rise," says Guanghui Hu, VP and Global Business Leader for gene synthesis company Genewiz.
High-level service companies such as Genewiz provide an even stronger environment for those companies looking to develop new drugs.
"SIP was a great choice for us because of the ability to access such a strong collection of related companies and facilities. This has allowed us to grow into one of the top antibody engineering companies in the world," says Peter Luo, CEO of BioBay tenant Adagene.
SIP also hosts the Cold Spring Harbor Asia Conferences, whose initial programs were launched by Nobel Laureate James Watson to showcase the latest research advances in life sciences.
"Through this we got to get to know people in fundamental research – this means a lot. There are many events where the best scientists participate. We get ideas and face-to-face interaction. As BioBay companies we are invited to participate and the best part is that we don't have to pay," says Luo.
The growing companies are in turn investing into the SIP hothouse.
"We are in the process of building the largest biotech manufacturing plant in China within BioBay, " says Kevin Yang, executive director at drug manufacturer Innovent.
"We find that the SIP success formula involves the availability of VCs, technical experts, and local government support. It's a all-round package."
The proactive approach is indeed allowing SIP to attract businesses on the cutting edge of new technology. It also means SIP can target the long-term benefits from such ventures. One emblematic center is Nanopolis -- which aims to develop into a global nanotech hub.
Launched in 2010, Nanopolis helps push forward nanotech innovations with, in its first five-year phase, a total investment of US$1 billion.
By the end of 2012, SIP had already attracted over 5,500 nanotech-related experts, entrepreneurs and engineers as well as accommodating the China-Finland Nanotech Innovation Center and the Netherlands SMEs China Center for Nanotech.
Meanwhile, 24 university centers in SIP provide a flow of talent, around 200 venture capital firms present in the Park scour its companies for opportunities, and events such as CHInano showcase the facilities to potential innovators and investors from outside. A shared exhibition facility called NANOhouse is planned.
"We are the only organization really focusing on nanotech in this way in China," says Jacky Wu, Executive Vice President of Nanopolis.
Nanopolis has also applied to become an 'IP operation trial zone', according to Wu.
"This is very critical for nanotech, especially for the transfer of technology to the final product. It will also help with commercialization. We will buy patents from universities and institutes and then operate the patent for some projects. It'll be very important for Nanopolis as a forward-thinking incubator," says Wu.
Legal experts agree. "The long-term benefits of protecting IP far outweigh the short-term benefits of taking unfair advantage of the know-how," says China litigation expert Malcolm S. McNeil of Fox Rothschild.
"With technology moving so much faster today than it has in the past, China has the opportunity to benefit immensely," McNeil adds. "Many companies still currently see China as a replicator rather than an innovator. In order to shed that image, measures have to be taken to ensure companies find it okay to bring in more highly refined manufacturing, moving from stuffed animals to silicon chips."
Contract bio-manufacturing (CMO) is an example of the kind of "refined manufacturing" that BioBay is targeting for the near future.
Manufacturing stage is often a bottleneck for high-tech bio-companies, argues Liu Yuwen. Of the 80+ drug discovery companies that have reached their manufacturing phase in BioBay, only one or two can currently afford manufacturing capabilities. By outsourcing their production to the BioBay CMO Base, firms have no need to undergo another round of investment or recruitment of engineers and construction teams.
"A science park should build the infrastructure and put in place the necessary elements for the tenants to thrive," says Liu. "We want them to come in and feel comfortable so they collaborate…and helping all these companies is our primary concern."
SIP boss Yang Zhiping agrees: "We offer strong support for SMEs. SIP is a one-stop shop for legal, financial, accounting, HR, research platform, and IP rights. We strive to be a talent-, capital- and knowledge-intensive innovation center."
Yang emphasizes that SIP cannot be thought of as just an industrial park.
"It is a city. Without this level of activity and synergy, we would not be able to attract the top-level innovators and talent that has made SIP such a success."