Chinese Aim To Build The Next Silicon Valley

China has targeted the coastal city of Dalian as a high-tech innovation hub.
China has targeted the coastal city of Dalian as a high-tech innovation hub. AFP/Getty Images

China's leaders are pushing for a big change: They want their country's entrepreneurs to become innovators, too. The goal is to move away from mere manufacturing and on to the pioneering of cool tools like the iPad and establish global brands like IBM and Microsoft.

Many of the cool tools consumers crave, such as iPads, smart phones and laptops, were dreamed up in the United States. But when it came time to turn the inventors' ideas into real products, the manufacturing work was sent to China.

Now China's leaders are pushing for a big change: They want their country's entrepreneurs to become innovators, too. The goal is to move away from mere manufacturing and on to the development of patented products and global brands.

"The local companies, they are climbing up the value chain," Dalian Software Park Vice President Michael Ye said. "They will become more like self-innovation companies."

Since the 1980s, China has surged ahead as a manufacturing powerhouse, but lagged behind in the development of original software and high-tech products. Today, the country stands as the world's largest exporter, but still has no compelling global brand names, such as IBM, Dell, Microsoft or Apple.

That lack of innovation comes with a cost. For many products, from brand-name track shoes to mobile phones, Chinese manufacturers may get less than a nickel for every dollar spent by the U.S. consumer.

To help develop patented products for the global market, the Chinese government has set out to turn a portion of Dalian into a center of innovation.

Dalian is a coastal city in Northeast China, across the Yellow Sea from the Korean peninsula. Historically, it was known for its fishermen and farmers. Today, Dalian's 6 million residents are prospering from a boom in manufacturing, ship building, transportation, finance and tourism.

But the city's aim is even higher: Dalian also is striving to become a world-class generator of new ideas. In 1998, government officials spurred the creation of the Dalian Software Park, a sprawling campus that mixes academic pursuits with private business investments. The park covers several square miles and blends together university classrooms with office buildings, research facilities, apartments, bilingual grade schools, restaurants, recreation facilities and more. Hundreds of foreign companies already have set up operations there.

The software park's goal is to bring together large numbers of students, professors and engineers from around China and the world so that they can share ideas in a concentrated area. Many of the park's facilities already have been built, and more are under construction or in the planning phase. If the park achieves its mission, it will follow the lead of California's Stanford University, which spun off the high-tech cluster now known as Silicon Valley.

"I think Dalian has big potential to be successful," Ye said.

NOTE: NPR's senior business editor Marilyn Geewax recently visited Dalian with a group of U.S. journalists. They participated in a study tour sponsored by the nonprofit organization China-United States Exchange Foundation.

Copyright 2010 National Public Radio. To see more, visit http://www.npr.org/.

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