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China tops world with 8,000 incubators for entrepreneurship

(People's Daily Online)    14:25, May 24, 2017
China tops world with 8,000 incubators for entrepreneurship
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China ranks ahead of most other countries in the world for entrepreneurship incubators, both in overall numbers and scale. Some 8,000 incubators are thriving across the nation, yet the industry is also plagued by problems of homogeneity in service and profit model.

The nation’s first incubator was established in 1987 in Wuhan, Hubei province. Ever since, the industry has been developing rapidly. By the end of 2016, more than 4,200 maker spaces were included in the Torch Program of the Torch High Technology Industry Development Center under the Ministry of Science and Technology. Incubators for scientific enterprises exceeded 3,200, while enterprise accelerators numbered more than 400, according to data from the center.

The past three years especially have witnessed rapid growth. Some 1,787 new incubators have opened, about one-half of all the incubators founded within the past three decades.

“Incubators and maker spaces basically cover all regions of China, including Tibet,” Sun Qixin, an official with Torch, revealed at a recent innovation and entrepreneurship summit. Sun noted that the incubator industry has become a key measure employed to upgrade local economies.

By 2016, some 400,000 startups had benefited from the Torch Program, which involves 2 million employees and 223,000 pieces of intellectual property.

Meanwhile, fierce market competition among entrepreneurs continues, as many provide similar services and use similar profit models. Some preemptively resort to mergers and acquisitions.

In March, co-working space provider WooSpace purchased Fourwork; in April, maker space operators HTnewspace and UrWork agreed on a strategic merger. Yet some companies have no alternative but to shut down. In April 2016, Shenzhen-based maker space Firebird Institution was forcibly demolished due to overdue rent payments, leading to the relocation of 60 startups working inside its former building. Six months later, another maker space company, Mad Space, announced bankruptcy, Economic Information reported.

Maker space operators in China usually require 70 percent of their space to be rented out in order to see profits, but even in Beijing’s Zhongguancun – the capital’s Silicon Valley - the percentage of rented working spaces is only about 60 percent of all those available. That percentage drops further in second- and third-tier cities, according to a UrWork report.

“It is unavoidable that the maker space industry will have to recalibrate one day. The market requires each operator to find its own featured service and operation model,” said Zhang Qian, head of Shenyang-based Miku 99.

UrWork founder Mao Daqing told Economic Information that China’s incubator industry will gradually divide into distinct operations, providing services that target specific fields such as AI or biomedicine, or offering a comprehensive business community for startups. 

(For the latest China news, Please follow People's Daily on Twitter and Facebook)(Web editor: Jiang Jie, Bianji)

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