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2011 HKICC Presentation


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Presentation at HKICC 2011 Plenary Session

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2011 HKICC Presentation

  1. 1. “New  Paradigm  in  Deepening     GD-­‐HK  CEPA  Coopera7on”   HKICC  2011  Plenary  Session:  “Deepening  of     the  ICT  Industry  CollaboraLon  in  the  PRD  Region”          Prepared  by:    Al  Kwok            Founder,  GD-­‐HK  InternaLonal  Science  Park  Alliance  Ltd.            Founder,  China  InternaLonal  Intellectual  Property  Services  Ltd.              Governor  &  Co-­‐founder,  Savantas  Policy  InsLtute              Former  VP  &  CIPO,  NetLogic  Microsystems  (“NETL”)   Guangdong-­‐Hong  Kong  (Guangzhou  Nansha)  Science  Park  Investment  Services  Ltd.   1   粤港(广州南沙)科技园投资服务有限公司  
  2. 2. Author’s  IT/IP  Business  Background     New  paradigm:  IP  are  crown  jewels  for  knowledge-­‐based  companies     Joined  Quality  Semi.  Inc.  in  1989  as  a  member  of  its  founding  team  licensing  &   transferring  CMOS  technology  &  products  to  Japanese  fab  (Foundry)  partners     Executed  IP  license  business  model,  transferring  engineering  know-­‐how  to  licensee   partners  and  bringing  up  foundry  capability  &  capacity  within  a  year     Joined  PMC-­‐Flash  in  1996  (as  VP  &  CIPO)  to  start  the  IP  license  business     Took  advantages  of  PMOS  flash  for  embedded  NVM  in  SOC  design     Managed  patent  por_olio  generaLon  for  comprehensive  IP  protecLon     Secured  license  (&  ODM)  agreements  with  top-­‐Ler  Japanese  firms  (>US$10M)     Joined  NMI  (“NETL”)  in  1998  (as  VP  &  CIPO)  to  iniLate  IP  por_olio  dev.  program     Set  up  a  system  to  ensure  con7nuous  innova7on  &  IP  genera7on     Set  up  top-­‐management  patent  commidee,  and  patent  generaLon  and  reward   programs     Promoted  and  implemented  patent  programs  to  all  engineering  staff     Building  an  impressive  patent  porLolio  since  1998     In-­‐house  patent  adorney  to  manage  IP  creaLon/development     Enabling  conLnuous  cugng-­‐edge  product  developments  including  knowledge-­‐ based  processors  and  “NETL7”  (Layer  7  switching)     CreaLng  significant  entry  barriers  against  compeLLons     Ensuring  NMI’s  long-­‐term  leadership  and  profitability  in  NSE  market   Guangdong-­‐Hong  Kong  (Guangzhou  Nansha)  Science  Park  Investment  Services  Ltd.   2   粤港(广州南沙)科技园投资服务有限公司  
  3. 3. Outline   “Delivering  Sustainable  Value     in  a  Knowledge  Economy  –     The  Challenge  for  Hong  Kong”     Product/Service  Focus  =>  Value  Engineering  Equa7ons     ⇒ End-­‐to-­‐end  Product  Lifecycle  Analyses   ⇒ Complete  Value-­‐Chain  Analyses  (focusing  on   Mission-­‐and-­‐Lme  CriLcal  Links  in  the  Chain)   ⇒ SCM  +  ApplicaLon-­‐Service  Chain  Management   ⇒ New  Applica7on/Service  PlaLorms  +  China   Market  Sustainability  &  Scalability  (Pilot  Site!?)   ⇒ GD-­‐HK  CEPA  Special-­‐policy  Zone  @  Nansha/GZ   Guangdong-­‐Hong  Kong  (Guangzhou  Nansha)  Science  Park  Investment  Services  Ltd.   3   粤港(广州南沙)科技园投资服务有限公司  
  4. 4. The  Value  Hierarchy  (Business  Models)   Presented  at  Intellectual  Property  Symposium  2002  in  Guangzhou  on  December  10,  2002       Brand Innovation Intellectual Property (IP) Values/Profit Margins 50% Applications (Mkt. & Standards) System Integration (Archit., …) Outsourcing 40% Trend Engineering (Design, ODM,..) 30% Manufacturing (Process, OEM) Consumer recognition Core competency Guangdong-­‐Hong  Kong  (Guangzhou  Nansha)  Science  Park  Investment  Services  Ltd.   Savantas  ConfidenLal   4   粤港(广州南沙)科技园投资服务有限公司  
  5. 5.  The  Value  Chain  (=>  DemandSupply  in  Alignment)   Great  end-­‐to-­‐end  push-­‐pull  effect  for  market  scaling  thru  lifecycles   For  Consumer  Electronics  Market  (Ecosystem)   Consumer  Markets  (End  Users)   Service Providers Various  Applica7ons/Services   System  Manuf.   Differen7ated  Applica7on  Designs   System  Integrators    System  Applica7on  PlaLorm(s)   Generic  Reference  Design  (w/ other chips)   IC  S/W  PlaLorm  (API,  drivers,  etc.)   IC  Design  houses   IC  H/W  PlaLorm   Guangdong-­‐Hong  Kong  (Guangzhou  Nansha)  Science  Park  Investment  Services  Ltd.   Savantas  ConfidenLal   5   粤港(广州南沙)科技园投资服务有限公司  
  6. 6. Raising  Values  of  a  Product  (IP  is  the  Core)   •  价格  =  给客户的价值  =>   Price  =  Values  to  Customers    价格  =  成本+服务+IP授权+品牌   (价格 = 给客户的价值) •  Pre-­‐sale  services  mean  design-­‐win   efforts  providing  soluLons  to  address   customers’  problems   Brand  RecogniLon   •  This  is  the  best  sources  of  innova7on   (品牌认知) and  ideas  for  the  next-­‐generaLon   Increasing Values (提高增值) products  (Product  &  Tech  Roadmaps)   •  Post-­‐sale  services  mean  reducing   Embedded  IP  Licensing   customers’  costs  of  ownership,   (隐含IP授权) extending  the  useful  lifeLme  of  the   product,  generaLng  recurring  sales  &   product  improvement  ideas   Pre-­‐  &  Post-­‐Sale  Services   •  Embedded  IP  licensing  means  the   (售前及售后的服务) customers  can  use  the  product  IP  for   their  own  product  uplioing  &   differenLaLons  -­‐  e.g.,  “Intel  Inside”   Manufacturing  Cost   •  Brand  recogni7on  means  the   (生产成本) customers  recognize  the  product  and   its  maker  for  superb  quality,   performance,  reliability  &  services   Guangdong-­‐Hong  Kong  (Guangzhou  Nansha)  Science  Park  Investment  Services  Ltd.   6   粤港(广州南沙)科技园投资服务有限公司  
  7. 7. IT  Business  Food-­‐chain     Hierarchy of IT Business (from “service to consumers” as the top of the food-chain with highest Gross Margin then down):   Service requirements drive H/W platform improvements       Service (to consumers) <=> Domestic market (localization) (China market is huge enough) Application (for service) <=> Domestic market (localization) (China centric standards & IPs) Network platform <=> Domestic stds. for local services/appl. International stds. (for global interface) System Integration <=> Domestic market (localization) vs. Int’l. mkt. (for applications) (China centric standards & IPs vs. Int’l. ones) S/W & F/W platform <=> Int’l and domestic stds. (global & local) H/W platform <=> International stds. (global IC supplies) Existing OEM/ODM business model breaks the IT Business Food Chain without positive feedback from Service to drive next product dev. cycle Guangdong-­‐Hong  Kong  (Guangzhou  Nansha)  Science  Park  Investment  Services  Ltd.   CIIPS  PresentaLon   7   粤港(广州南沙)科技园投资服务有限公司  
  8. 8. High-­‐end  vs.  Low-­‐end  Example    China  e-­‐book  as  a  low-­‐end  example     “Shanzhai”  business  model  (山寨型商业模式)     Copy  others’  design  concepts     Add  more  common  (proven)  applicaLons     Aim  for  low-­‐cost  and  low-­‐price  (~US$250)     Lidle  post-­‐sale  on-­‐going  services     Lidle  connecLon  to  on-­‐going  e-­‐commerce  service     Lidle  customer  feedback,  no  learning  and  no  product  innovaLon    Apple’s  iPad  as  a  high-­‐end  example     Designed  as  an  e-­‐commerce  CRM  tool  (Led  to  iTunes  e-­‐commerce   pla_orm)  -­‐  one-­‐stop  e-­‐commerce  business  ecosystem     More  recurring  business  from  post-­‐sale  of  iPad  (hardware)     Aim  for  high-­‐value  and  affordable  price  (~US$600)     Complete  the  “H/W  plaLorm  to  Service”  end-­‐to-­‐end  cycle  for  next-­‐ genera7on  product  innova7on   Guangdong-­‐Hong  Kong  (Guangzhou  Nansha)  Science  Park  Investment  Services  Ltd.   CIIPS  PresentaLon   8   粤港(广州南沙)科技园投资服务有限公司  
  9. 9. Market  Posi7oning  -­‐  Product  Focus   ecosystem:    Industrial  market  by   Under-­‐developed   Too  Far-­‐out:   nature  with  higher  (50-­‐>70%)   Building  infrastructure  &   Not  ready,   hype,  bubble   Ecosystem   Future  Growth:   Future  Growth:   Long-­‐term   Longest-­‐term   profit  margins     Future  Growth:   Well-­‐developed   Short-­‐term   Cut-­‐throat   Well-­‐developed  infrastructure:   Compe77on   consumer  market  by  nature  with   (me  too!)   lower  (30-­‐>50%)  profit  margins     Mature  (must  have)   FuturisLc  (nice  to  have)   Applica7on   Guangdong-­‐Hong  Kong  (Guangzhou  Nansha)  Science  Park  Investment  Services  Ltd.   CIIPS  PresentaLon   9   粤港(广州南沙)科技园投资服务有限公司  
  10. 10. Types  &  Ranking  of  Innova7on   In  the  order  of  lasLng  value  impact  to  society  (from  most  to  least):     New  business  model  (global  producLvity  jump)  -­‐  great  lasLng  value  impact     E.g.:  e-­‐Commerce  (internet),  pure-­‐play  foundry  business  model,  carbon  trading…     New  business  process  (global  producLvity  jump)  -­‐  great  lasLng  value  impact     E.g.:  Window/Office  (new  work  environment),  outsourcing,  TQM,  ERP…     New  applicaLon/market  (for  exist.  prod.  or  tech.)  -­‐  great  value  impact       E.g.:  GPS,  RFID,  radar  guiding…  -­‐  from  military  to  commercial  applicaLons     New  technology  (for  exisLng  product)  -­‐  great  value  impact  someLmes     E.g.:  High-­‐speed  CMOS  (over  NMOS)  for  power  reducLon  and  device  scaling     New  product/service  (for  exisLng  market)  -­‐  medium  value  impact     E.g.:  On-­‐line  shopping/trading,  SMS  (China),  digital  broadcast…     New  combinaLon  of  package  of  technologies,  products  and  services     E.g.:    Apple’s  iPhone  and  iPod,  Blackberry,  solar,  clean  tech…     New  design  (implementaLon  or  appearance)  -­‐  limited  value  impact     New  system  architectures:    e.g.,  the  Sandisk  “338”  patent  for  flash-­‐memory  card     New  subsystem/circuitry   Guangdong-­‐Hong  Kong  (Guangzhou  Nansha)  Science  Park  Investment  Services  Ltd.   CIIPS  PresentaLon   10   粤港(广州南沙)科技园投资服务有限公司  
  11. 11. Business  Development  PlaLorm  in  GD-­‐HKISP  (Nansha)3  Industrial  value-­‐chain  developments  can  drive  professional  service  businesses     •  LogisLc  &  Supply-­‐chain  Management   Data  Special   •  3D  AnimaLon  ProducLon  &  ExhibiLon     Zone •  Intelligent  City  &  Smart  System  Designs     •  Professional    ICT  Services Three   •  Environment  Improvements   Industrial   •  Low-­‐carbon  Footprint  Management     Eco-­‐Tech •  New  Materials  &  Resource  Efficiency   Themes •  New  Business  Models:  Carbon-­‐Trade,  EMC   •  Solar  Photovoltaic   Renewable     •  DistribuLve  Power  GeneraLon  &  Storage   Energies •  Smart  Grid    &  Power    SCM   •  Green  Building  ,  Electric  Vehicle…   Strategic  Enabling  Pillar  PlaLorms  (All  Megatrend  Game-­‐Changers)   IP  ProtecLon   Data  Security  &     Carbon  ReducLon   &  Sharing Privacy  ProtecLon   &  Credit  Trade Guangdong-­‐Hong  Kong  (Guangzhou  Nansha)  Science  Park  Investment  Services  Ltd.   11   粤港(广州南沙)科技园投资服务有限公司  
  12. 12. Appl./Services  PlaLorms  for  Knowledge  Economy         InternaLonal  IP  Trading,  Professional  Services  for  IP   CommercializaLon;  IP  ValuaLon  System     Professional  Development  and  CerLficaLon  for   Intellectual  (&  CollaboraLve)  InnovaLon     InternaLonal  Data  Security  &  Privacy  ProtecLon  Services     InternaLonal  Food  Safety  End-­‐to-­‐end  Management  &   Tracking  Services     InternaLonal  End-­‐to-­‐End  LogisLc  Service  Management       InternaLonal  Carbon  Credit-­‐earning  &  Trading  Services     Smart-­‐city  ApplicaLons  &  InformaLon  Management     InternaLonal  Medical  Tourism,  e-­‐Medical  Global   Resource  Management  Services   Guangdong-­‐Hong  Kong  (Guangzhou  Nansha)  Science  Park  Investment  Services  Ltd.   12   粤港(广州南沙)科技园投资服务有限公司  
  13. 13. Success  Example:    GPS-­‐based  Services  (MyCard  Ltd.)   GPS/GPRS Logistics Service Platform - System Architecture Control Call Data Center / Center Center Access Platform GPRS Real-time Coordination, Data analyses / Bus. Location Security Checks Intel., Map Database & Tracking & Alerts User Web Portal Logistics Co. Customer- User Access Control & specified Call Portal Management Forwarding Services Logistics & Passenger Agents Map Database Mgmt. Security Senders & Monitoring & Receivers Alerts GUI & Templates Customs Emergency Data Storage & Insurance Alerts Archives Co./ Bank - Asset Mgt. Functions of Control/Call/Data Centers & Service Platform August 1, 2008 Guangdong-­‐Hong  Kong  (Guangzhou  Nansha)  Science  Park  Investment  Services  Ltd.   MyCard Confidential 913   粤港(广州南沙)科技园投资服务有限公司  
  14. 14. Success  Example:  GPS-­‐based  Service  (MyCard  Ltd.)     GPS/GPRS Logistics Service Platform - Network System MyCard capabilities: In Hong Kong In Mainland •Web ASP services •Map database •Data center PCCW China (Sunday) Telecom 10M lease line Wired & wireless Wired network network Internet MyCard Hutchison Sinotrans 4M+ Wireless network Wired network lease line China Mobile Wireless network Customers monitor vehicle activities on MyCard web-portal August 1, 2008 MyCard Confidential 10 Guangdong-­‐Hong  Kong  (Guangzhou  Nansha)  Science  Park  Investment  Services  Ltd.   14   粤港(广州南沙)科技园投资服务有限公司  
  15. 15. Knowledge-­‐based  Economic  Trend   Evolution of Intangible Assets – U.S. Companies 11/25/11 Guangdong-­‐Hong  Kong  (Guangzhou  Nansha)  Science  Park  Investment  Services  Ltd.   15   15 粤港(广州南沙)科技园投资服务有限公司  
  16. 16. Stage  of  Enterprise  Development:  China  vs.  US  Professional  Service  Opportuni7es  to  address  China’s  corporate  uplijing  needs   Human Primary Stage of Key asset / Domain Scalability resource capital development value driver knowledge factor development sources Family- Hands-on Agriculture Farmland Family Copy recipe training Factory- Low-cost Task Hands-on Family & Counterfeit & cluster era labor oriented training friends clone Industrial Automated Techno- Traditional Industrial Profit-driven mass-prod. logical investors, Standards, era training technology oriented govt. prog. trade assoc. Business (Business) On-job VC, Professional Post-industrial services/ Process professional Institution Standards, IP era know-how oriented development & license investors Knowledge “Open Business “Integrated “Learning “Knowledge based source intelligence system” ecosystem” sharing” economy platform” On  average,  US  SMEs  are  at  “Post-­‐industrial”  stage  of  development,  whereas  the   majority  of  China  SMEs  are  at  “Factory-­‐cluster”  stage  of  development.     Guangdong-­‐Hong  Kong  (Guangzhou  Nansha)  Science  Park  Investment  Services  Ltd.   16   粤港(广州南沙)科技园投资服务有限公司  
  17. 17. Conclusion     Knowledge  Economy  must  be  Prof.  Service/Applica7on  driven     Core  competency  in  professional  services  is  the  key  to  global  compe77veness     IBM’s  transformaLon  is  a  good  example  (from  H/W  to  Professional  Services)     Must  focus  on  “ True  Demand”  –  Mission/Time  Cri7cal  ones     Supply-­‐side  economics  (Reaganomics)  is  a  dead-­‐end  –  unsustainable     Real  economic  growth  must  come  from  “True  Demand”  –  not  unsustainable   Cheap-­‐Credit  Inflated  False  Demand  causing  conLnual  global  economic  crises     OEM/ODM,  SCM…  are  for  the  “Push  Effect”.    From  the  Demand  Side,  Services   and  ApplicaLons  based  on  standardized  services  provide  the  “Pull  Effect”  –  the   horse  (engine  providing  the  Pull  Effect)  should  be  in  front  of  the  cart  (economy)!     “Professional  Services”  is  the  Intrinsic  Source  of  Innova7on  &  IP     Valuable  IP  development  is  from  Pre-­‐  and  Post-­‐Sale  Professional  Services     Core  competency  development  requires  “ Technical,  Business  and  IP/Legal     Domain  ExperLse”  –  HK’s  educaLon  &  prof.  development  systems  have  to  adapt     Hong  Kong  &  the  whole  world  need  China  for  market  scalability     GD-­‐HK  Interna7onal  Science  Park  at  Nansha  (Guangzhou)  is  intended  to  be  the   CEPA  Special-­‐Policy  Pilot  (Landing)  Site  (for  product/service  localizaLon)     Guangdong-­‐Hong  Kong  (Guangzhou  Nansha)  Science  Park  Investment  Services  Ltd.   17   粤港(广州南沙)科技园投资服务有限公司  
  18. 18. Thank  You  Very  Much     For  Your  AdenLon!     al.kwok@ns-­‐  Guangdong-­‐Hong  Kong  (Guangzhou  Nansha)  Science  Park  Investment  Services  Ltd.   18   粤港(广州南沙)科技园投资服务有限公司