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How China's universities fuel tech growth

Students and academics are helping power the IT industry through extracurricular work--but it's still not straightforward.

Ten years ago, Cheng Peng arrived in Beijing to start an engineering degree at Tsinghua University, one of China's best technology academies.

At the end of this year, he will receive his doctorate. But his prospects did not always look so good.

"My home town mines one-third of China's coal," he said. "Twenty years ago, I remember my parents talking about how to get enough money for food and clothing. When I was young, their salary together was around 150 (yuan, or about $18) a month."

"My family got their first telephone 13 years ago," he added. "At that time, not many people had them. But the quality of life is getting better now--even my grandfather has a cell phone. And my brother and sister can afford to pay for my parents to travel or visit us in Beijing."

Cheng Peng
Credit: Dan Ilett
Tsinghua University Ph.D. student
Cheng Peng

Cheng himself is now part of the technology industry that is changing so much of China. His research is in software automation, and he loves it. But it's not all been easy.

"It takes longer to get a Ph.D. in China," he continued, in smooth-spoken English. "I've spent 6.5 years trying to get mine. For us engineering students, there are a lot of problems, because innovation is so poor here. I don't think we can get to Microsoft's or Intel's level within 20 years--they are so far away."

"We can earn a lot of money from doing things like coding and having our own businesses. But fundamentally, the IT economy is something we can't get yet, because we're not innovating," he said.

He said that is being partly addressed at universities, but added: "I think that Chinese people are not used to the rapid transformation of society. Most thinking people, including academics, are thinking of how to get rich. But there's a lack of real thinking. Everyone's trying to break into a market--they just can't do it without innovating."

Incubating IT
Universities are at the heart of the IT world in China, some would argue. Many of China's IT executives are alumni of prestigious universities, and a good proportion of companies are based close to college campuses to simplify human resources and research and development requirements. It is common for CEOs to have Ph.D.s, just as it's common for lecturers to have their own companies.

Tsinghua University is one of many in China with its own technology and science park. The likes of Sina.com, Sohu.com and foreign companies such as Google are just a few of the big names with bases there.

The park itself contains a number of large high-rise buildings, one of which is called the "incubator." The Chinese Ministry of Science and Technology provides up to $100,000 in funding for research and development for the 170 start-up companies housed there. They are given tax breaks, free office space and business grants of up to $12,000 per year. One condition: Getting a place is dependent on the entrepreneurs having studied abroad.

Jichang (James) Guang, an ex-academic who is Tsinghua's director of outsourcing, is also CEO of software outsourcing company Startech, which hires people from the start-up companies.

"With Tsinghua, we have a really prestigious university, so we can do some high-end outsourcing projects," he said. "We do things such as computer motherboard designs, manufacturing, thermoanalysis and software design. We already have one or two companies here about to IPO."

"All companies in the incubator are our human resource pool," he added.

School for business
Guang is one of many in the technology field who has worked in academia, at the Massachusetts Institute of Technology in the U.S. and back at Tsinghua. These days, his Beijing office is in the science park, so he is well-positioned to recruit some of the best-trained and most eager young IT people in China.

His son, who is also his business partner, is based in California and is focused on pulling in new customers. Guang senior has helped to form a company for each project, handpicking development teams from the huge resource pool he works next to.

"IBM in China uses this model," he said. "They go to a company and say: 'I need 10 of your engineers on a one-year contract. Whatever you pay, I don't care.'"

"But here at the incubator, we have an advantage--there are about 3,000 people working here. The companies based in the incubator like this model. They don't have responsibility for the project, and they earn money from (leasing out) their staff. Some people call this place 'the body shop,'" he said.

The notion of someone working both as an academic and a businessman is not unique to China. Years ago, Guang worked for his professor at MIT. But Tsinghua is starting to clamp down on the number of academics who are allowed to run their own companies and teach at the university.

Li Na
Credit: Dan Ilett
Zhejiang University Ph.D. student
Li Na

"You're now seeing a very different trend between the universities," Cheng said. "Tsinghua, for example, does not encourage professors to establish their own company anymore. That's because two years ago, professors founded their own companies and were living life with dual identities. They'd teach in the morning, be a CEO for a lunch, and (chief technology officer) in the evening in the labs."

"Some of them would earn more than 10,000 (yuan, about $1,250) a month. That's more than a teaching salary. Tsinghua thought that was not a good thing, so they said, 'You can start your own company, but you must resign.' But at Zhejiang University (a big university in Hangzhou province), they still encourage people to run their own business. But it's much bigger than Tsinghua," Cheng added.

Zhejiang University has 44,151 full-time students. In the information science faculty, there are 13 postdoctoral researchers, 329 Ph.D. students, 956 masters students and 2,887 full-time undergraduates.

One of those Ph.D. students is Li Na, who has been working as an intern at Microsoft's Research Center since 2004. "I'm a research assistant here," she said. "There's an agreement between Microsoft and universities, so we can extend the holidays and work longer."

Over the past five years, Microsoft has taken in 2,000 interns from some of the best universities in Asia, mostly in China. Internships are popular in China, as they work as a way for universities to strengthen their ties with industry.

Because of her efforts, Li Na was invited to for an annual Microsoft barbeque. She believes she wouldn't have had the same opportunities 10 years ago.

"There are many experts here from overseas," she said. "I can learn a lot from working with them or attending seminars."

She went on to underline the changes in technology in China in recent years, saying: "I entered university in 1997. At that time, there was no computer in our dormitory. We didn't know about the Internet. After one year, we had a computer and had a dial-up connection. Now we have broadband. But at that time, I couldn't imagine the current situation in China."

Dan Ilett reported from China for Silicon.com in London.