'Samsung, LG double-edged sword for venture firms'

• Published May 1, 2016 4:29 PM KST
• Updated May 1, 2016 4:29 PM KST

By Lee Min-hyung

Korea’s technology ecosystem, dominated by Samsung and LG, may become a double-edged sword for the growth of the nation’s venture firms, said Liu Ruopeng, chairman of China’s emerging technology company Kuang-Chi Science.

“The two tech giants are leading global technology trends, and cast a massive influence on establishing not just the global technology ecosystem, but the local IT and cultural environment,” said the 33-year-old founder of the emerging tech firm, in an interview in downtown Seoul, last Tuesday.

He said this will limit opportunities for small companies to grow in size and expand their presence in the local economy, as Samsung and LG will keep searching for smaller, more specialized entities to find next revenue sources.

But the presence of such globally influential firms can also serve as a stepping stone for startups to grow bigger, once they establish a co-development ecosystem with the conglomerates.

“In China, no companies are as huge and influential as Samsung or LG, in terms of size and levels of technology,” he said. “It is very hard for small firms to grow into such conglomerates. But Samsung and LG have set a successful example in Korea. I think they need to form a mutual development ecosystem with small firms to mitigate Korea’s current tech environment that is heavily reliant on the two companies.”

Under the partnership model, Korean small firms will be able to learn invaluable lessons that their Chinese counterparts cannot do, he said.

Liu grew up obsessed with science, especially physics and space, studying electrical and computer engineering at Duke University in the United States.

Upon finishing his doctoral degree, Liu and a group of his fellows established Kuang-Chi Science in Shenzhen in southeastern China in 2010.

Under the dream of “dedication to innovation that changes the world,” the founding members have focused on developing new things that are highly innovative, such as a near-space vehicle, and flying cargo and smart surveillance airships.

Due to such outstanding feats, Kuang-Chi became the first company that Chinese President Xi Jinping inspected after he was elected in December 2012.

Chinese gov

’t’s massive support on tech ventures

Liu stressed each government holds a key to foster more startups, thereby creating venture booms.

“The Chinese government gives incentives of up to 100 million yuan ($15.4 million) to a researcher who has studied abroad and brought home some research achievements,” he said.

But the government subsidy is hugely different from venture capital investment, as venture capitalists or firms keep getting involved in how the invested firm does business. This will leave researchers less motivated to do research, according to him.

“The Chinese government, however, does not intervene in the research process, because they provide the incentives, guaranteeing freedom,” he said.

The Chinese government is also encouraging researchers to register more intellectual property, granting incentives on those who have patents, even if they have nothing to do with the Chinese market.

Global Community of Innovation (GCI)

Kuang-Chi is also committed to creating a global research environment by forming the Global Community of Innovation (GCI), a research and development (R&D) group hiring more than 1,300 scientists or researchers from 12 countries including China, the United States and Hong Kong.

In particular, the company plans to establish an R&D facility, the Asia Innovation Design Center, in Seoul this year.

“We have discussed in detail over building the Asia Innovation Design Center in Seoul since the second quarter of last year,” he said. “The official opening of the center will be around September or October.”

He visited Korea to join the “2016 China Week” which held for three days from Apr. 25 at the Four Seasons Hotel in central Seoul.

“My Seoul visit is part of an effort to raise the awareness of the opening of the R&D facility,” he said. “We are going to invest some $10 million in the project. Kuang-Chi will unveil more specific plans after signing a memorandum of understanding (MoU) with the Korea Trade-Investment Promotion Agency (KOTRA).”

The fundamental motto of the center is to make futuristic things into reality and turn them into a part of our daily lives, he said.

This is in line with Kuang-Chi’s company vision, which is well-reflected in its major products _ including the Martin Jetpack.

In December 2014, Kuang-Chi acquired a 52 percent stake in New Zealand-based jetpack manufacturer Martin Aircraft Company.

The world’s first manned jetpack can be widely used for rescue purpose, heavy transportation or even leisure needs from individuals, Kuang-Chi said.

But the company remained cautious over the timing of its commercialization, due to airspace regulations.

Another major product is the near-space vehicle, called “Traveler.”

Kuang-Chi partnered with the New Zealand government over the launch of the Traveler.

The company signed a deal to test the space ship in New Zealand. In June last year, Kuang-Chi succeeded in launching the Traveler from Ashburton, on South Island of the country.

This has allowed the company to open the possibility of space travel, accomplish tests on maritime surveillance, high-speed wireless communication and optical monitoring, the company said.

Through Traveler, Kuang-Chi hopes to generate more tangible achievements in broader areas such as geographical mapping, meteorological and agricultural big data collection, cosmic imaging and aerial transportation.

The company also boasts its hybrid cargo aircraft, Solarship, which enables trips to some hard-to-get-to places where it is hard for traditional aircraft to land.

The airship has a series of eco-friendly features including aerodynamic design and propulsion system, utilizing buoyancy force as a key lifting force. It can carry a maximum load of 30 tons, the company said.

Amid the rising importance of cloud platforms, the company decided to launch Kuang-Chi Cloud, an airborne, big data collecting and managing device.

The Cloud, flying at an altitude from 1,000 to 2,000 meters, provides satellite-level monitoring services for less than one hundredth the cost, Kuang-Chi said. The device came amid rising demands for extensive coverage for big data in radius coverage of more than 30 kilometers.

“All of such innovative devices came from our open-minded, creative attitude,” he said. “Even if Kuang-Chi is a China-based corporation, we started business targeting global markets.

“Startups or any entrepreneurs should not be bound by a certain market or country, but develop their ideas in a way to penetrate into wider markets.”