Wu Ying, the 47-year-old Chairman and CEO of UT Starcom China, started his company Starcom with another Chinese student studying in the United States in 1991, in New Jersey. The company merged with California-based Unitech, also founded by overseas Chinese students, in 1995 to form UT Starcom. As a successful returnee to China, Wu shared his views on innovation in an interview with Beijing Review on March 22:

The Chinese Government is encouraging innovation. Even the top leaders are advocating innovation and starting enterprises. The United States has never had such proposals coming from the government side. But China’s problem is that the implementation by the departments responsible or local governments is not adequate, although they’ve realized the importance of innovation. This needs to be improved.

Meanwhile, society as a whole should provide more support to innovative companies. Innovation is mainly realized by enterprises. Innovation often happens in small and medium-sized enterprises and start-ups. Such enterprises face the risk of failure. The social environment should be tolerant of this.

The legal and financial environment also needs to be improved. For example, in terms of financial services, in the United States, listing on the Nasdaq has lower requirements of start-ups. But on the Chinese mainland, there is no such stock market. So, we are hoping that the Central Government can provide a good environment for start-ups, including the legal, economic and policy environment. All universities should encourage students to pursue innovation. What is most important is for the enterprise itself to invest in R&D.

Wu also made suggestions on the setting up of an independent innovation system in the IT sector.

China can increase investment in basic research. Investments in company-sponsored research, which are also significant to the country’s development, will not only benefit the country, but also help the companies to improve.

To transform China from the world’s manufacturing center into R&D center, China can start setting up a national R&D group and include overseas returnees into the group. As many of them are proficient in IT and some are engaged in finance, combining them with local talents can make the group more powerful.

More support can be given to enterprises set up by overseas returnees, including investment, government procurement, international bidding and product promotion. During the 11th Five-Year Plan period (2006-10), the key areas of growth in the IT sector will be software, integrated circuits, digital TVs, 3G, RFID (Radio Frequency Identification) tag and information security. Many companies set up by overseas returnees are engaged in these areas. To give them support will facilitate “Created-in-China,” instead of “Made-in-China,” to make more breakthroughs in the IT sector.

Finally, as a method of encouraging independent innovation in enterprises, preferential policies in financing and tax can be used.