WIM Committee Secretory Answers to Why We Need the World Innovators Meet?
The WIM Committee Secretary Huang Yuanpu said that it is time for China's enterprises to grow from "Big" to "Big and Strong". An international event is a bridge to eliminate the information asymmetry.
In April, an old friend of mine Mr. M came for a visit with me in Beijing. Mr. M just sold his startup under such gloomy time - slowing-down economic growth and pessimistic investment market. Quitting a business in a way like this was not bad at all, but Mr. M didn't seem to relieve. During the past year, seeking financing and selling the company sapped all his energy. He felt a bit pity because his company, once the iconic startup in the industry, failed to grasp the best chance and ended up with being sold.
Mr. M knew I had been busy with EqualOcean and he said, "Do you know that we got an innovation reward from a reputable American organization in 2017? Our investor recommended us for this prize. Our investor is dollar-fund based and most of its limited partners are from the U.S. Because of the award, I spent lots of time and even flew over to the coast across. If your event and awards are impactful worldwide and influential in the investment field, that will be remarkable. China is yet to have a tech innovation event and award nomination that can make an impact on the world..."
Does China have a world-known tech innovation event and award nomination? I have never seriously considered this question before and then I asked around - my peers in the same industry and startup founders - and I got the answer. Domestic innovation-related events will invite a lot of overseas guest speakers and then the organizer will call the event an international one with a name starting with "International" or "Global". But that is not how "international" works.
Once there were several global events originated from China but they were a flash in a pan. To be frank, though EO company holds numbers of events and conferences each year and has built a good reputation nationwide, we are not yet an international event organizer - our events' influence is limited within the border.
Several days after the meet with Mr. W, I had a cup of coffee with a unicorn company's founder Mr. L at a mall near EO company. He said to me at first sight, "The first in-depth analysis article about my company in English is written by EqualOcean, and I truly appreciate the work that you have done." I was delighted at the time and a little embarrassed. I know that what EqualOcean does is meaningful, but the in-depth article was not an insightful one since the analysis and interpretation of the company's business were not sharp enough.
Then, Mr. L said, "We have a world-known investor joined our last funding round, and they advised us to do global marketing and elevate brand awareness to attract future partners and overseas investors. We need to brand because the company will go public in the U.S.; we have global partners and we intend to extend our global partnership network; we aim to be an international brand but now we stuck at the starting point. If you google us, the first result is a totally-unrelated American company..."
His words revealed an embarrassing reality: in China, most unicorns are well-founded but have little global impact; the U.S. bourse listed Chinese companies are known by few overseas investors. In another word, Chinese companies have to cost much more than average to communicate with overseas investors and to prove themselves. Most public Chinese companies are out of global investors' sight and barely supported by them, which leads to a weak connection with global public market investors and reflects on the stock performance.
What is missing? Are overseas investors not interested in Chinese companies? Certainly yes. China has become one of the most important innovation centers in the world. Are global enterprises not interested in cooperating with Chinese companies? Apparently yes. Quite a number of the Belt and Road region's technology startups are learning from Chinese tech giants and unicorns. At a time of Globalization 4.0, the information asymmetry undermines the communication's foundation between China and other countries.
Mediators that can fill the information gap are too few to name. State-owned media institutes are influential in worldwide but their focuses are not in technological innovation; overseas media giants can only see Huawei, Alibaba, Tencent, and other Chinese giants while muddying the water with political issues. There indeed are no more than a handful number of tech media and research institutes studying Chinese technological innovation. But that is far from enough.
Indeed, China's hard power like economy and technological innovation capability is catching up with the U.S. In the 2019 Fortune 500 list published on July 22, it was the first time that China has more Fortune 500 enterprises companies than the U.S. The counts of China's tech companies and unicorns are close to the U.S. As to 5G and artificial intelligence technologies, China is the most forefront.
Back to what Mr. W said, China does not have a global innovation activity at this moment, not to even mention the third party with global influence eyeing on technological innovations. This situation only would be acceptable if we were in 2009. After a decade, we still do not have matched global influences and because of this, China's enterprises suffer from the high cost generated from information asymmetry.
Numbers of the new generation of Chinese startup founders have the overseas educational and occupational experience, which armed them with global perspectives. Startups founded by them inherently acquire the gene of globalization.
"EqualOcean will hold an event in Beijing for world innovators. Would you like to join?“, I asked more than 20 investors and startup founders with overseas experience and received many exciting "Yes". Not only a positive answer, they actively proposed that they could help to invite overseas guest speakers.
After receiving such warm feedbacks, we upgraded past EO Innovators Conference events (EIC) to World Innovators Meet (WIM). During the past four years, EIC had attracted thousands of innovators and influenced industries intensively and profoundly in China.
Innovators are a group of people and organizations that dare to create and make breakthroughs.
Innovators deliberately make efforts to make society better than yesterday. We hold WIM to gather these innovative minds from all over the world to a face-to-face meet. During the meet, they have chances to exchange opinions, share experience and build a further relationship with each other. An in-person meet values more than an online talk. WIM aims to be a place for world innovators to communicate and explore possibilities.
2019 World Innovator Meet (WIM2019) will be held in Beijing on December 6 - 8 and it will be a global event for technological innovation event. EqualOcean researched and analyzed regional startupship and investment trend to build connections with world innovators continuously; we are in the process of preparing global technological innovation rankings and reports in various industries. In this grand event, we will gather world outstanding innovators, entrepreneurs, and investors in Beijing and be a communication bridge for cooperation beyond borders.
One day, Mr. W messaged me when he saw WIM2019's news, "How long do you think that WIM will become an event brand with profound global influence?"
"If you were to ask me in 2009, I would say a decade. Now is 2019. Five years will do", I said.
At 10 pm on July 21, 2019, a lot of my colleagues shared the same content in their social media account - a banner picture of Shanghai skyline with the text "EO Scien-tech Innovation Channel is On." That was not only for celebrating a new media channel but also warming up the SSE STAR stock market on the eve before the grand opening day.
Just 15 minutes after the banner sharing, some startup founders and VC investors friends of mine subsequently asked me: "Why does EO open a sector designated for scien-tech innovation? To attract eyeballs? What is your plan for the channel? Do you think the STAR will be the second NEEQ (National Equities Exchange and Quotations), which was sought-after at the beginning but no one cares for now? How will the STAR perform? Will the new bourse affect startups and investors' decision making?..."
For all these questions, I do not have concrete answers for most of them. Even if I strongly support a new channel named EO Scien-tech Innovation, I rely on a logic which is not absolutely rigorous: China will be the No.1 economy body in the world in 10 years; world No.1 demands an open financial market; the SSE STAR will become a world stock market with great chance; a world-class bourse will boost the development of the third-party service providers.
The starting point of the logic flow is whether China's economic power will be the No.1 in the world. The answer varies. Many international organizations (i.e. World Bank, ICF) hold a positive opinion while others hold the opposite. Different people have sensed differently regarding China's economic development climate. A considerable number of startup founders are not confident for this view and consequently, they will take corresponding actions. For me, the answer is positive and I am preparing for the time coming.
Will China's financial market open? If the answer is positive for the previous question, so is this one. The financial market might open earlier than we expect. The rating company Standard & Poor's entered China market; MSCI increased the weight of China's A Share stock market; bunches of international financial companies increased positions in Shanghai and Beijing. China is accelerating the globalization process. Though doing differently than it used to, China is being more open than ever.
Will the SSE STAR become a world-class stock exchange market? I will answer with a positive "Yes". It is just a matter of time to be open. There will be one day that companies from Southeast Asia, the Middle East, Africa, and other regions will go public on the SSE STAR bourse. It is not important whether the SSE STAR will be China's Nasdaq, but Shanghai will be a world financial center tieing with New York and London; the SSE and the STAR will be the top stock exchange markets.
Because of the open markets, top-class third-party service providers like Goldman Sachs, McKinsey & Co., Bloomberg, WSJ, BlackRock, etc. will bloom in China. Ten years ago, China was not strong enough; in 2019, just a decade later, China bred many third-party service providers with profound impacts. This is a chance given by time.
After the STAR's opening, the stock performance in the short term will not undermine the fact that China's financial market is getting more open. From an investment angle, the core technology has become a critical criterion for investors to evaluate a startup. In 3G and 4G's Internet era, China raised giants like Meituan Dianping, Bytedance, Xiaomi, Didi, Pinduoduo and alike companies with a market value of tens of billions of dollars. In the coming 5G+AI time, we can expect more super unicorns appear.
Bombarded by the news of the SSE STAR's 25 stocks' shiny performance, Fortune released the lastest Fortune 500 list on the same day. In the list, Greater China has 129 enterprises nominated and it is the first time that China surpassed the U.S. in this list.
Though Fortune 500 is not a perfect list since it nominates companies according to its revenue only. Revenue reflects how big the company is but not how strong it is. Indeed, China has the most Fortune 500 enterprises, but the majority of them are state-owned. The 11 listed China's banks accounted for 50% of all China's Fortune 500 enterprises' net profits, which reflected that the selection criteria of Fortune 500 were not ideal.
Nevertheless, the Fortune 500 list is globally accepted as a list to measure enterprises' power. Since its first publication in 60 years ago, the U.S. had long been the No.1 country that had the most Fortune 500 enterprises. The record was broken by China in 2019, which is the first time that a non-U.S. country takes the crown of Fortune 500. It is plausible to expect that China will have more Fortune 500 enterprises in the future.
Fortune 500 can only represent hard power, but a solid financial foundation is the basis of soft power's development. Most world-class third-party service providers originated from the U.K and the U.S. because they were once the strongest countries in the world. Enterprises are eager to grow and must learn from top players; countries want to be strong and they must learn from the strongest. The strongest country will breed the most giant companies in the world.
In the coming decade, there will be more China's enterprises squeezing in the World 500 list and becoming world-known. If China's economic growth supports local enterprises going big, then the STAR market is the opportunity for enterprises to think about how to be excel.
In 1942, the Economist opened the U.S. sector, and that was the time that Uncle Sam took over the place. 80 years later, the Economist opened China sector.
In March, I met a partner from a reputable venture capital (VC) company. I asked, "Your company inherited the name from the U.S. company, but it outperforms the sister company in the U.S. What is the secret?"
The gentleman humbly said, "We are truly lucky because the company was established at the best time and caught up with the startup tide in China - a real golden ten years for VC."
I followed, "But now many say that Southeast Asia, India, and other places will have more opportunities for startups there. What is the plan for your company regarding this?"
He answered, "We insist that China and the U.S. will be the most important innovation centers in the world and we will keep consolidating the market in China. By doing so, we will be the best VC soon or later."