The US has MIT and Stanford, universities that thrive as hubs of innovation and talent.
How ‘China’s MIT’ is driving tech dreams
Their counterpart in China’s free-wheeling tech world is Tsinghua University in Beijing.
When entrepreneur Wang Haili was facing the prospect of shutting down his semiconductor business, he approached a mentor at Tsinghua, where he completed a doctorate in computer science.
A group of alumni quickly gathered $780,000 to invest in his start-up, says Li Zhu, head of the 3,000-member Tsinghua Alumni TMT Association.
“I don’t think he need worry about a shortage of capital with the support of alumni,” Li says.
Li, an angel investor, set up the group in 2011 so that Tsinghua alumni in the technology, media and telecommunications industries can get together to network.
Such connections have helped establish the university as an influential kingmaker in China's tech sector.
Founded in 1911, Tsinghua has a leafy campus located in northwestern Beijing. The university was tasked to train engineers in 1952, a few years after the founding of the People's Republic, and is still most famous for its engineering and sciences programs.
Many members of the Chinese Academy of Sciences and the Chinese Academy of Engineering, the two state-level institutes devoted to spearheading science and technology research, are Tsinghua alumni or faculty.
Its graduates have founded billion dollar companies such as food delivery giant Meituan Dianping and social video app Kuaishou, as well as up and comers such as driverless vehicle startup Roadstar.ai. Among China’s universities, Tsinghua leads the way when it comes to start-up founders.
But in tech, it’s not just the ideas. It’s also the money. Tsinghua Holdings was set up as an in-house asset management company for the university’s subsidiaries and has since become a full-fledged venture capital firm backing investments in areas spanning mobile internet, cloud computing to nuclear energy, waste water treatment and medical services.
A separate alumni-backed fund for start-ups, Tsinghua Capital, raised $4.7 million in its first fundraising round in 2014 to back start-ups founded by students and alumni.
“The fund has had an everlasting impact on how Tsinghua trains talent,” said Chen Jining, who was president of the university at the time and now serves as mayor of Beijing. “I believe there will be more influential entrepreneur talents, like a Steve Jobs from Tsinghua.”
The role that China’s universities play in producing tech talent is taking on even more importance, as the country tries to exceed the US, the global tech leader, in areas such as artificial intelligence (AI) and robotics.
Under President Xi Jinping, China has put the development of advanced technologies, such as big data and AI, at the center of a national drive to reform the economy.
China’s State Council has laid out goals to build a domestic AI industry worth nearly $150 billion in the next few years, and to make the country an “innovation center for AI” by 2030.
Still, China trails the US in every driver of AI development, namely hardware, research and algorithm and the commercialization of the industry, according to a study by Oxford University. The biggest obstacle is likely to be the production of hardware like semiconductors, the study found.
China is also suffering from a serious shortage of qualified people to staff its ambitions to become a leader in AI. There is a global AI talent pool of about 300,000 people while the actual needs number in the millions, according to a Tencent Research Institute report.
Stability over risk
Tsinghua is the top university in China producing a pipeline of research talent in tech, as well as entrepreneurs.
Li, the alumni group president, says that unlike in the US, top talent in China may gravitate toward secure, government-sector jobs, rather than founding that next unicorn.
There is still a traditional view that “working for the government or big companies is the best choice for a career path and Tsinghua graduates always have a lot of such offers, while superstars in US universities start their own companies,” Li said.
The culture shift may not be in place just yet.