Comment: American inventions plus Chinese manufacturing plus the global market are the future trend

The inventor in our impression is someone like Edison, who not only has a rich imagination but also strong hands-on ability. In order to make a light bulb with moderate brightness, he tried one material after another. After the experiment was successful, he found partners and set up his own power plant. He also spent most of his life suing those who plagiarized his inventions.

But it is not like this today. The most dramatic example we know is the Austrian beauty Hedy Lamarr. She was the first porn star in the world to appear nude, and then she and composer George Antheil co-invented the core technologies of CDMA, WIFI and Bluetooth that are widely used in mobile devices today. Unfortunately, since there was no way to turn the technology into practical use, she could only choose to continue to be a porn star. Beautiful women are all the same, but wise women are different. The world has lost a Marie Curie, but gained a Marilyn Monroe.

In fact, there are millions of patents lying in the US Patent Office, but only a few percentage points can be truly transformed into practical use. This shows that commercial transformation is the biggest difficulty. The actual profit sharing ratio also confirms the importance of commercial transformation. In the products made with patents, the share of the patent inventor is generally only a few percentage points, and the rest of the contribution goes to the downstream. In the field of scientific and technological innovation, the era of inventors taking care of everything is over, and entrepreneurs must play a great role in transformation.

Another misunderstanding about innovation is that inventions and creations are random, unpredictable, and entirely dependent on the interests of scientists and inventors. Insights and inventions, as the name suggests, are unpredictable. Whenever scientists are asked why they engage in scientific research, they say it is because of curiosity and interest. The curiosity and interest of scientists should be spontaneous, unpredictable, appear with the same opportunities in any field, and uncontrollable, and scientists should not bow down to the pursuit of money.

The reality is not like this either. A specially treated white mouse for laboratory use (such as white mice for diabetes, obesity and Alzheimer's disease) costs about $3,500. The cost of raising mice in some laboratories can be as high as hundreds of thousands of dollars a year, and an ordinary laboratory consisting of a professor and 6-7 students cannot survive for a year without $600,000 to $700,000. Scientists are of course engaged in scientific research out of curiosity and interest, but this does not mean that their choices are not constrained by costs and driven by money. On the contrary, any decent scientific research today is like a Hollywood blockbuster, a process that is carefully screened and strictly monitored. The era of interest-driven has passed, and now is the era of market and capital guidance.

Today's innovation industry in the United States is composed of two interactive links. On the one hand, researchers in scientific research institutions have a strong spontaneous motivation to push inventions into commercial applications instead of letting them sleep in the patent office. One of the main reasons for this internal motivation is the Bayh-Dole Act passed in 1980. Before this, patents generated with federal government funding were owned by the federal government. Only large companies, after identifying their goals, can spend a lot of money to purchase and transform these patents. After the Bayh-Dole Act, scientific research institutions can have the right to commercially develop these patents, that is, the right to commercially use them, and the companies that purchase these patents can pay in installments according to the realized profits.

In this way, the financial and information thresholds for patent transformation were lowered, and many relatively small companies were also qualified to participate in commercial transformation. The contact between scientific research and business was expanded exponentially. In some well-known examples, some university professors were able to receive hundreds of millions of dollars in dividends from scientific research projects. Scientific research institutions have become a powerful engine of the US economy.

On the other hand, capitalists and entrepreneurs dominated technology transformation activities, completing important transformation links such as identification, financing, manufacturing and sales. Many researchers worked part-time in enterprises, solving problems for enterprises and bringing the problems back to scientific research institutions, which became the subject of research. As a result, capital also reshaped universities and research institutions.

Today, there is a spurt of innovation in the United States, covering energy, aerospace, robotics, electronics, medical care, education and other fields. We use "building block innovation" to describe these innovation processes, which contains two meanings.

The first is horizontal, which is a combination of elements required for innovation activities. An innovative product, such as a space shuttle, requires power design, appearance design, dashboard design, material design, financing model design, etc. These elements do not even constitute a product, but an ecosystem, each of which is the best, but very narrow. Combining them together to become a world-class product is the horizontal level of "building block innovation".

The second is vertical, which is a combination of decision-making power at each stage of development in innovation activities. From concept to technology, financing, manufacturing and sales, different roles provide different expertise and have different amounts of discretion. Scientists had greater discretion at first, followed by venture capitalists, and then manufacturers and distributors. In this progressive process, the scale of profits gradually became clear, and the distribution ratio of different roles was gradually determined. It is not that venture capitalists always occupy their positions and inventors resign to become entrepreneurs, but that each performs their duties and alternates harmoniously. This vertical level of "building block innovation", that is, the effective and orderly combination of corporate control rights, especially the corporate governance model and legal regulations behind them, is very worthy of our study.

Today, the complete chain of "invention → patent confirmation → capital screening → production and manufacturing → global marketing" has been opened up. The three-dimensional fine division of labor and seamless connection on this chain have formed a new pattern of "building block innovation". On this chain, where the Chinese stand and where they should break through is a strategic issue. At the moment when everyone is rushing to innovate and start businesses, it is even more worthy of our calm thinking.

In turn, introducing talents does not necessarily mean introducing technology, because their inventions are likely to be held by their original institutions. Compared with the United States, my country's investment in scientific research can only be described as a drop in the bucket, and the legal protection and capital recognition capabilities after inventions are still in the early stages. We do what the Americans do, and it is difficult to catch up with them head-on. But on the other hand, China's manufacturing industry - especially the open OEM manufacturing industry and experience - is already unique in the world. Its vertical variety coverage is wide, the depth of vertical integration is high, the industrial chain is complete, concentrated and flexible, and the comparative advantage of labor prices have provided a solid foundation for China to become the king of manufacturing in building block innovation.

Obviously, complementary advantages are the right way. Whether "American invention + Chinese manufacturing + global market" can become the basic trend of global building block innovation in the future, and what we should do to adapt to and promote this trend, increase the contact between American inventors and Chinese manufacturers, and reduce information asymmetry and distrust in cooperation, is a proposition that entrepreneurs, experts, scholars and government officials urgently need to discuss together.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.