Guangdong Province was once known as the “world’s factory”, possessing a large-scale labour-intensive industry that produced everything from toys to electronics to be sold around the world.
Due to increasing labour costs and the financial crisis, in 2008 the "world’s factory" started transforming and upgrading its manufacturing sector from labour-intensive to technology-centric; especially when in 2012, the Guangdong Government launched its Innovation Driven Development Strategy.
After five-years of development, the innovation sector has begun to take shape in Guangdong with more than 20,000 high-tech enterprises laying claim to over 160,000 valid invention patents yearly, topping any other region in China.
A human hand-shaped robot arm is displayed in the exhibition held by the Foshan Robot Academy during the “Internet+” expo.
R&D input occupied 2.5% of Guangdong's GDP, and this share is even higher than that of the majority of other known centers for innovation.
With a 70% of the world’s drone design and manufacture being conducted in Guangdong, the the province is gradually becoming the world leading drone R&D center .
Ghost Drone, the first app controlled drone developed by EHang.(Source: Ehang)
Why has Guangdong been able to become an ideal environment for people looking to start their own business, especially within the innovation sector?
Derrick Xiong Yi-fang, co-founder and chief marketing officer of EHang Intelligent Technology Co., Ltd, a Guangdong-based company focusing on drone R&D, gave his answer during an exclusive interview with Newsgd.com.
Starting a business is my dream
“The word ‘startup’ always excites me,” said Derrick. “The feeling is ‘wow, this is my dream! It is so cool’.”
Derrick remained in high spirits when talking about starting a business throughout the interview, even though at that time he had just returned to Guangzhou a couple of days previous after having undertaken a business trip to the United States.
Although Derrick is only 28 years old, he is already an experienced entrepreneur in various fields.
Derrick was 30 under 30 Asia 2016, selected by Forbes. (Source: EHang)
“Our teacher required us to run a registered company with a sustainable business model when I was a first-year student at Nanyang Technological University,” said Derrick. “So, I opened a consulting company, which provided market research and advice for SMEs.”
This was but his first step, quickly going on to establish the first Chinese group purchasing website in Singapore, developing a dating app in the U.S. and so on. In his own words, he describes himself as a “young entrepreneur running around all over the world“.
After gaining his postgraduate degree from Duke University, he decided to return to China and founded EHang in 2014.
Different from other drone companies which chose Shenzhen as their base of operations, EHang chose Guangzhou, the capital of Guangdong.
“Choosing Guangzhou actually was pure coincidence,” Derrick told us. “But, after we settled down here, we found out the many benefits of Guangzhou.”
Zhujiang New Town, CBD of Guangzhou. (Guangzhou Tianhe Central Business District)
According to Derrick, Guangzhou has become a real talent magnet, because of its affordable cost of living, excellent educational resources and delicious food.
A survey released this year by ‘The Economic Going Global‘ (sic), shows that Guangzhou is the most affordable big city in China.
According to statistics, Guangzhou’s average housing price remains ar 16679 yuan/㎡, whereas average prices in Beijing and Shanghai have both now shot above 30000 yuan/㎡.
This relatively low cost of living have enticed some of the world’s innovation giants to settle in Guangzhou, such as Foxconn’s advanced display project, and AsianInfo’s headquarters.
The government also plays an important role in helping startups to grow.
“I am not a local resident, but the 'Talent Green Card' enables me to to gain 'local resident treatment' in the city,” Derrick indicated. "Furthermore, the government helped us to contact the best local law firm, patent office and trademark agency for IPR Protection."
Last year, Guangzhou launched its Green Card policy for both Chinese and foreign talent, enabling holders to enjoy equal treatment with other citizens in terms of purchasing property, vehicle license registration, children’s schooling, etc.
At the provincial level, the Guangdong Government has issued 16 measures to attract talented individuals to start business in Guangdong.
Moreover people who choose to establish their company in Guangdong can get a business license in just 20 days, a full 2 days faster than any other country or region can offer. In addition, in 2016 Guangdong‘s Government reduced taxes for high-tech enterprises and SMEs by more than ¥11 billion.
Breaking constraints is the DNA of EHang
“EHang 184 has been the motivation for me to enter the drone industry,” Derrick indicated. “I believe that EHang 184 could reconfigure transportation systems.”
EHang 184, the world's first drone capable of carrying a human passenger, amazed the world when it was unveiled at the Consumer Electronics Show in the U.S.A. in January last year.
"EHang 184 is an innovative, unique product. So far no one can compete with it," Derrick indicated. "What’s more, it is designed and manufactured by a Chinese company."
EHang 184, the world's first drone capable of carrying a human passenger. (Source: EHang)
Although EHang 184 won the Best of CES 2016, some people questioned whether EHang 184 meets the requisite safety standards. However, in Derrick‘s opinion, it is a necessary step in order for companies to progress towardnew things.
"We should not be afraid of breaking free of our l constraints, if we want to do something innovative," Derrick indicated. "Since EHang 184 is a brand new product, there are no relevant standards for it."
Derrick told us that they have been discussing with FAA and CAAC about the formulation of new regulations and safety standards for EHang 184.
"In fact, EHang is always the first person to test the water," Derrick told us. "We always do something that no one has tried before. For example, we developed the first app controlled drone and our drone formation flight broke Guinness World Records twice."
A drone formation flight show was performed this year in Guangzhou. (Source: EHang)
Derrick emphasized that EHang's DNA is about freeing itself from constraints and doing disruptive innovation, Not merely copying other drone companies. According to Derrick, the R&D budget occupies more than 50% of EHang‘s total expenditure.
"After thousands of tests EHang 184 can reliably perform a fixed-point flight stably," said Derrick. "We hope that EHang 184 would fly in front of Guangzhou's citizens later this year."
Going global is inevitable for Chinese companies
With the rapid economic and technological progress that China has made over recent years, especially regarding the development of Belt and Road Initiative, more and more Chinese businesses are proving their worth in the international arena with their core technology.
As far as Derrick is concerned, the increasing pace of going global for Chinese companies is also an inevitable trend.
“There are two advantages for startup businesses to go global,” Derrick indicated. “One is that China has a good environment for people to start a business or do technological innovation, while the other is cost advantages.”
Furthermore, the progress of the Belt and Road Initiative has enhanced mutual understanding between Chinese companies and western countries and resulted in more cooperation.
In July this year, EHang signed letter of intent with Limburg Province (Belgium), one of the sister provinces of Guangdong.
EHang signed a cooperation agreement with Lieven De Jonge of Made in Limburg in July this year.
“We went to Limburg twice in order to visit a valley in Hasselt, Limburg Province,” said Derrick. “We think that the drone valley not only represents a good place for testing EHang 184, but could also work as a hub for EHang 184 to enter European market in the future.”
Derrick told us the decision for the two to cooperate was decided in only two months.
“The Guangdong Government, Locate in Limburg and VOKA played an important role in the cooperation,” Derrick indicated. “Mutual trust will be gradually cultivated through official channels.”
Limburg is an important logistics hub in the heart of Europe. A canal directly connects Limburg with both the Port of Antwerp and the Port of Rotterdam, the two largest ports in Europe. Goods can be transported to these ports from Limburg and subsequently distributed to other European countries.
Derrick indicated that specific plans for further cooperation with Limburg would be launched step by step.
At present, EHang have already set up branches and agents in five continents, such as the U.S., Germany, Australia and Singapore.
“The drone market is still young,” Derrick told us. “What EHang is going to do is keep innovating. ”
Author: Steven Yuen & Abby Chen
Editor: Simon Haywood & Olivia Yang
