If you have an innovation whose IP is trapped in a university, why not consider spinning it out in an investment-rich environment like China.
Assuming a fair trade between the IP you contribute and the capital China offers, and assuming a legitimate IP protection regime, what roadblocks still remain before Chen’s big idea has hopes of becoming reality?
The first problem is export restrictions that still exist between the United States and China. “We need to be mindful of that,” said Chen.
A bigger issue, however, could be a shortage of management skills. Chen said, “We need ‘cross-border’ entrepreneurs.” Because the money is in China and China expects the investment to be made there, China is unlikely to invest directly in U.S,-based startups. However, there are exceptions, said Chen, such as the Chinese investment in a UCLA incubator and an electric car battery company in the United States.
What’s badly needed is a “talent” who can track and follow the flow of Chinese money into the United States and manage it well, he explained. “We need someone who can cross the barriers of linguistic, legal and cultural differences, then connect the dots between the U.S. and China and be a hands-on project manager.”
Chen noted that Israel, for example, has successfully transferred technology to China in a number of different projects. One good example of Israeli IP and venture capital injected into Chinese technology companies is the China Wafer Level CSP Co. (WLCSP), Ltd. in SuZhou, China.
WLCSP established its fab in SuZhou in order to use a packaging technology licensed in 2004 from the Israeli packaging startup Shellcase.
Shellcase's technology can be used generally for integrated circuits but is associated primarily with packaging images sensors. Many chips packaged with this wafer-level method are used in cell phones, digital cameras, fax machines, digital scanners, CD/DVD portable units, linear sensors, bar code readers and toys.
After digesting the
Shellcase technology from Israel, WLCSP’s Chinese plant developed
several packaging process patents of its own, to help achieve a vision
of "China-created products” rather than just "China manufactured
Chen poses this as an ideal example of “an international startup,” which has succeeded in milking the China market.