Financials, Technology Author:WIM Committee , Irina Pavlenok Editor:Luke Sheehan Dec 23, 2020 02:40 PM (GMT+8)

One of WIM2020 first day’s speakers was Wei Li, who spoke as chairman and founder of Green Pine Capital Partners, about technology investment trends over the next decade.

Wei Li

Image credit“Original”

On December 9-12, EqualOcean was holding the World Innovators Meet (WIM) 2020. This year, the event's main topic was 'Technology and Innovation Connect the World.' WIM2020 gathered innovators from Asia, Africa, Europe and the Americas to share their knowledge and key achievements, promoting the concept of 'Tech for Equal.'

"Having been through the factor-driven stage and the investment-driven stage, China is on its way to an innovation-driven stage, which depends on concentrated talents, irreplaceable technology and healthy ecosystem," claimed Wei Li, who is also standing Committee of Shenzhen CPPCC and lead speaker for the Leadership Chapter.

During the World Innovators Meet, on 9-12th of December, innovators from all over the world met up online to discuss key achievements in 2020, marking out how breakthroughs are adding convenience to everyday life.  Wei Li, as one of the most influential investors, focused on new technology investment trends, which included production localization alternatives, new infrastructure and health care.

To start, Wei Li told the WIM2020 audience about one technology company that will soon be listed on the Shenzhen Growth Enterprise Market. The main business of this company now is the production of lubricating oil additives. Among the global lubricating oil additives companies, this company is one of the four largest companies, controlling 85% of the global additive market.

This company, called Richful, was established in 1996. First, it developed a test agent for carbon-free paper. Today, Richful has become the world's largest producer of carbonless paper detection agents. In 2004, Richful successfully researched and developed lubricating oil additives independently. By 2009, a series of products related to lubricating oil had been developed rapidly, which filled some gaps in the field of additives in China.

This example shows that technology and innovation can make China stronger than people could in the past, because the whole production process should be oriented by production factors, which determine the development trend of the country as a whole. After that, it enters an investment-oriented stage, and in the future, it will enter an innovation-oriented stage, when will people have their orientation towards wealth.

However, for different stages of the country we may see different orientations. Innovation has become the core driving force for continuous development, helping countries to avoid the middle-income trap and move to an innovation-oriented stage.

Nowadays, there are many high technical barriers for enough development and new growth of the good ecosystem, so there is a particular need to gather talents from all other the world. So Wei Li noted that the trend has changed from relying on resources in the past to relying on talents and ecology. This trend has been the focus of technology and innovation investment for many years. Technology and innovation will become the most important field for development in the future. The new pandemic of 2020 first broke out in China and then spread around the world. In this case, all countries were affected, and they had to adopt new different ways to take the situation under control. However, the pandemic has led to other breakthroughs in the healthcare field. For example, BGI has established the 'Fire's Eye' detection laboratory, developed in China's Wuhan to go around the world to support resistance to COVID-19, and Ginger Bio enterprises, which produce IBD and also developed many new virus detection boxes – at the early stage of the pandemic, detection played a major role. Investments in the AI and robotics solutions that the government sought provided people with contactless ways of delivery, reducing the risk of infection and other tools that we used during the pandemic.

In terms of China's technological and innovative development in the future, we often hear the phrase 'domestic batch manufacturing.' Developed countries, led by the USA, feel that China's development speed is too fast. Particularly, the USA has started a trade war with China that has gradually transitioned into technology and innovation war. However, China is eager to embrace globalization and continues to play an important role in the global value chain system.

Wei Li noted that China has several basic aspects of domestic substitution that can cover the losses arising from the government's restrictions. There are therefore some investment opportunities:

1. High production machine and industrial parts alternative

Only by mastering the localization of some key components can you make the  international community willing to cooperate with you. If you have domestic substitutes for some basic software and industrial software, it will be not easy to shut down this business. Most Chinese enterprises have domestic substitutes for their safety.

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2. The new generation of infrastructure is representative of the new generation of information technology 

Infrastructure investment will not only increase employment opportunities and stimulate GDP growth, but also provide a very good environment for promoting incubators, a new economy and a new industry.  China is starting a new stage of infrastructure, represented by information technology, which provides a huge opportunity for China's GDP growth and investments.

In the slide below you can see the technology and innovation enterprises that have been investing by the government. Sensetime is a leading AI platform in the world and plays a significant role in China's new infrastructure. The fourth paradigm is an AI company invested in by China's five major state-owned banks. It provides some core technologies for the financial system of these banks. For instance, RealAi technology strives to explore the next generation of saver AI technology. Ponyai is the world's leading platform technology for intelligent driving. It has cooperated with many international car manufacturers. BM technology is trying to do something about GPU so that GPU production will not stop in China.

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3. Healthcare and pension as the representatives of consumption demand

Consumption demand is also a very important aspect in the future because with the change of population structure and improving the level of education, health care and pension are also a very important part of good-quality life. For example, the government has invested in some medical technology enterprises, which will play a significant role in the future life of residents.

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What should we pay attention to investing in technology and innovation companies?  The trend of technology and innovation is often supported by platform technologies or revolutionary technologies, which may be affected by trends and software options. For example, in the beginning, a trend is found – as an investor, you should be looking for platform technology. But sometimes a platform is not what were you looking for. When you see the trends of technology and look for the technology to promote this trend, it is better to invest around this technology, and it will bring you good returns, and investments should be around the needs of the middle class. The demand of the middle class and the cost-performance ratio will be better, so we should invest around the demand of the middle class.

Wei Li reminds investors that they should invest in entrepreneurs. Scientists develop technology, but entrepreneurs transform technology into products and services, and finally into value. Scientists are uncompromising, while entrepreneurs are always compromising. So if you want to be an entrepreneur, you should know how to compromise.

Investors also should pay attention to an enterprise's performance. If you find a good project, you should invest in this enterprise based on your professional point of view.

Courage is to throw in something that dares to stick to the right choice, because sometimes it is very hard to stick to the right thing in the initial stages – it may not be recognized or understood by others.

When it comes to a specific enterprise, investors will focus on the enterprise from three angles, and one may use three different graphics to express it:

Innovation must have both a 'diamond and a horn'; the team is round, and the circle is characterized by the shortest circumference of the same area, and a good team involves gathering a group of people with minimum cost; the leader is horizontal and vertical, and the leader must have principles and, the bottom line, he should be tolerant, because the bigger the team, the more capable will be the people who join it, and capable people will have personality.

Finishing his speech, Wei Li shared four sentences that everyone who starts a business should keep in mind: "Some people can see only because they believe, some people can believe only when they see. The forerunners are destined to be lonely. We must believe in the power of faith."

About WIM

Hosted by EqualOcean, the World Innovators Meet (WIM) (click to watch the online event on December 9-11, 2020) is a global event for innovators. It provides limitless opportunities to learn from and connect with the most sought-after technology pioneers.

About WIA

The World Innovation Awards (WIA) are announced at WIM to recognize game-changers across various industries and geographies. Selected by a committee of distinguished experts, entrepreneurs and investors, WIA are designed to acknowledge technology disruptors striving to make a positive impact on a global scale.

See this year's WIA lists and download the research reports in English and Chinese on EqualOcean and 亿欧智库 respectively.