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A Spin-in Model of Nanomaterials Innovation in China

Li Tang a,1, Philip Shapira a,b, Yu Meng a,c

a. School of Public Policy, Georgia Institute of Technology, 685 Cherry St. N.W. Atlanta, GA 30318, USA

b. Manchester Institute of Innovation Research, Manchester Business School, Oxford Road

Manchester, M13 9PL, UK.

c. Fraunhofer ISI, Karlsruhe, 76139 Karlsruhe, Germany

Abstract While China has rapidly expanded scientific research on nanotechnology, the

development of entrepreneurial technology-oriented small nanotechnology companies

faces a series of challenges. While institutions and incentives for academic scholarship

are well-established in China, mechanisms to support technology-based

entrepreneurship are new and relatively fragile. New enterprises in the emerging area of

nanotechnology face problems of technology transfer and intellectual property

management, capital acquisition, market uncertainty, and constrained access to global

markets. This paper explores issues and trajectories of nanotechnology SME

commercialization, probing the particular characteristics of the Chinese context and the

ways in which innovation frameworks, institutions and business strategies are enmeshed.

We examine in detail the case of an innovative Chinese indigenous small firm engaged

in nano-fumed silica development, investigating the strategies and push- and pull-factors

underlying its innovation practices. We find that the technology is company-driven but

also highly connected to public R&D support which stimulates “spin-in” development as

this small firm embeds technology and business development strategies with host

institutions. We explore the proposition that the institutional relationships which are

1 Corresponding author :Li Tang, School of Public Policy, Georgia Institute of Technology, 685 Cherry St. N.W. Atlanta, GA 30318,

USA. Tel.:+1 678 896 3133; E-mail address: tang006@gmail.com

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formed to secure access to research expertise and aid business survival also influence

the ways in which technology is commercialized. Broader management and policy

implications are discussed.

Keywords: Nanomaterial innovation, Spin-in, SMEs, Nano-fumed silica, China

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A Spin-in Model of Nanomaterials Innovation in China

1. Introduction

Nano-fumed silica is a commercial nanopowder produced by high-temperature

gas phase processes via flame synthesis technology. Given its excellent reinforcing,

thickening and thixotropic features, it has promising applications in rubbers, adhesives,

inks, colloid storage batteries and composite insulators. Today the demand of nano-

fumed silica has soared over the last twenty years. According to a recent study released

by the Freedonia Group., the global fumed silica demand is forecast to expand 4.7%

annually to 2.1 million tons in 2015. In the US alone, a $1.65 billion market with a 5.4%

growth in specialty silica is anticipated in 2011. In sharp contrast to the huge demand,

very few multinational enterprises (MNEs) mastered the core technology to produce a

variety of types of nano-fumed silica products at a very large-scale. Large international

companies such as Evonik Degussa, Wacker Chemie AG, and Cabot dominate 85%

supplies of global fumed silica (Figure 1).

Aligning with its rapid economic growth, China’s demand for nano-fumed silica is

growing dramatically. At the same time, the backward technology makes domestic firms

lag far behind their international peers. By 2000 more than 80% of fumed silica was

imported from overseas (Figure 2). Concerned about the security of raw material

supplies, Chinese government has enacted a set of policy instruments to encourage

enterprise-centered indigenous innovation. Nanotechnology industry is given particular

support. In response to governmental incentives and market dynamics, many firms

entered or shifted to this promising field in 2000 but only a few survived. Guangzhou

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GBS High-Tech & Industry Co., Ltd., (hereinafter GBS) is a successful example among

the very few.

Guangzhou GBS High-Tech & Industry Co., Ltd. is engaged in the business of

manufacturing and marketing a series of nanopowders and nanocomposites including

nano-fumed silica. Its predecessor Baiyun Adhesive Co. Ltd., was a consumer of fumed

silica back till the late 1990s. Anticipating the promising market of nano-fumed silica,

GBS adjusted its development orientation and became a producer in 2001. Closely

collaborating with some high-profile universities, GBS rapidly upgraded the imported

technology transferred from the Institute of Surface Chemistry, Ukrainian Academy of

Science (UAS). Later under the three flags of “indigenous innovation”, “reduce core

technology dependence on foreign technology” and “environment friendly solution,” GBS

research teams successfully involved themselves in the “863” Program (also called State

High-Tech Development Project). These R&D funding from the national government and

independent Intellectual Property Rights (IPR) serve a good signal attracting angel

investment supporting further R&D investment and firm expansion. In 2005, co-designed

with China Rubber Group Carbon Black Research & Design Institute, GBS released

China’s first National Standard of Fumed Silica (GB/T20020-2005). Today, GBS has

become a leading company in Chinese nano-fumed silica industry.

The role of innovation in the performance of technology-based firms has found a

receptive audience among Chinese policy makers and the popular press. A variety of

policy measures have been implemented to foster enterprise innovation at different

administration levels. In spite of the general agreement on the effectiveness of Chinese

S&T policies on increasing firm R&D, facilitating technology dissemination, and

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stimulating innovation, innovative Chinese firms are rare. This is especially true for Small

and Medium Enterprises (hereafter SMEs) in emerging technologies. It is tempting to

assume that technology upgrading and a series of innovations contribute to GBS’ fast

growth. Yet the puzzle remains why many Chinese indigenous firms in nano industry

cannot take this promising path. The low number of SMEs committing to innovation

practices and the low survival rate of innovative firms suggest that in spite of the

increasing awareness of innovation as a “raison d'etre” for sustainable development, our

understanding about the process of innovation or the interaction of enabling and

constraining factors is still deficient (Oslo Manual, 1992; Abernathy & Clark, 1985).

Taking a microscopic view of an innovative Chinese indigenous firm in nano-fumed silica,

this study centers on the interplay of firm strategy and business environment and their

impacts on the innovation process in the nanomaterial industry. By delineating the

developing trajectory of a domestic Chinese company, we elaborate upon innovation

barriers that the investigated firm encountered and the strategies they adopt to make

innovations succeed.

The remainder of this work is organized as follows. First, we briefly discuss the

method. Then we profile the development trajectory of the investigated firm in four

phases. We next analyze the innovation practices of the investigated firm and how it

responds to business environment. The paper concludes with a discussion of

contributions and policy implications.

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2. Method

This project adopts a case study approach, whose importance has been

pinpointed for explorative research within real complex situation. Three types of data

utilized for this study are primary and secondary documentary data, in-depth interviews,

and direct observations. The investigation was divided into three phrases. Phase 1,

information on the investigated firm and government policy documents related to nano-

fumed silica were first collected from a variety of sources. The sources for this

information included internal and external reports of the firm, scholarly publications, and

patents. From these archival data, we developed semi-structured interview protocols for

each person whom we planned to interview. In order to validate data from different

sources, we asked three parties some of the same questions. This approach is expected

to reduce bias and create a more complete picture of the opinions of the involved parties.

After the Georgia Tech Institutional Review Board approved the protocols, we conducted

field observations and face-to-face interviews with firm managers, officials in funding and

regulatory agencies, and university collaborators in November of 2009. Relevant policy

documents such as national and provincial nanotechnology development guidelines

were also collected during the field work. To encourage involvement and reduce

potential suspicion, we promised all interviewees that we would do an accuracy check

before we would publish the results and that we would give each participant a study

report of our findings (Bryman 1997). Follow-up calls and emails were also carried out for

any needed clarifications.

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3. Company Profile

The case we selected for study is Guangzhou GBS High-Tech & Industry Co., Ltd.

(hereafter GBS), a limited liability company located in Guangzhou, a city in Guangdong

Province in southern China. GBS is co-invested by Guangzhou Venture Capital Co., Ltd.

and individual shares. GBS is a private company specializing in manufacturing

nanomaterials. Since its establishment in 2001, GBS has developed three main series of

products: hydrophilic nano-fumed silica, hydrophobic nano-fumed silica, and organic

fluorine plastic products. Responding to market needs, GBS enterprise collaborated with

Sun Yat-sen University and engaged on a series of process innovations. A batch of

special fumed silica products were developed, including compression fumed silica (HL-

150P, HL-200P), high transparent fumed silica product (HL-150H), colloidal battery

fumed silica product (HL-200B), and hydrophobic fumed silica series products. GBS has

reached an annual mass production capacity of 6000 tons of nano-fumed silica with

diameter 7-40nanometers and specific surface area between 70--400m2/g. The smaller

particle size, larger surface area, and more activated surface lead to better properties of

reinforcement, thickening, transparency absorbing, and U-V blocking compared to the

products of domestic competitors. Today, GBS has developed into a leading

nanomaterial provider in China (Table 1).

4. Development Trajectory

The development of GBS went through four phases (Figure 3).

(Figure 3 insert here)

Stage 1: Entrance into the nano-fumed silica industry (1999-2001)

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The initial stage can be traced back to 1999, when Baiyun Adhesive Co. Ltd, the

predecessor of GBS, decided to enter the nanomaterial industry. Anticipating the

promising market of nano-fumed silica, GBS adjusted its development orientation and

transformed itself from a consumer of silica goods to a producer of nano-fumed silica.

Two factors triggered this transformation decision. One was the management’s ability to

sense the promising market demand for nano enabled products, and the other was the

observation of state and regional industrial policies which favored local firms in emerging

technology. After a thorough technological feasibility analysis, GBS sought an

appropriate technology transfer partner globally to work with on nano-fumed silica. In

December 1999, GBS finally obtained technology licensing and production line from the

Ukrainian Academy of Science after several rounds of negotiation at the price of USD

500,000. GBS R&D personnel, which consisted of a diverse body of senior and junior

engineers and technicians, started to improve and redesign the production line. After two

years of work, they finally built the first single fumed silica production line with an annual

output of 100 tons/year.

Stage 2: Fast development period (2001-2004)

In 2001, there were very few firms in China which could produce more than100

tons of nano-fumed silica per year. The first-mover-advantage and the market demand

allowed GBS to develop fast with a profit return rate as high as 100%, despite the fact

that their products were not of high quality. To overcome the technical problems of

quality, GBS management started to spin in local elite universities and develop

university-industry collaboration links. In 2004GBS collaborated with Sun Yat-sen

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University and filed its first invention with the State of Intellectual Property Office of China.

Different from the first stage, when market pull and government push were essential

factors, GBS then started to take a leading role in building up its UIG linkage and

directing R&D.

Stage 3: Strengthening of the comprehensive UIG link (2004-2007)

The third stage of growth began after 2004, when hundreds of Chinese nano firms

seemly overnight. This stage was marked by a turbulent environment and fierce market

competition. GBS’s struggle to survive and maintain prosperity was manifested in up and

down profits. In order to avoid competition via price cutting, GBS continued its strategy of

process innovation and expanded its collaboration with local elite universities. In addition

to its work with Sun Yat-Sen University, GBS also developed collaboration links with

South China Technology University and with Luoyang Iron Group in this period.

In an attempt to reverse declining profits GBS made a series of process

innovations to manufacture high-purity nano-fumed silica. These innovative processes

resulted in better products at a lower cost compared to other production methods

currently in use by competitors. In addition, by effectively utilizing CH3SiCl3, the by-

product of metallurgical processes used in the production of silicon and ferrosilicon alloys,

GBS started shift their R&D direction toward more environmentally friendly products.

Stage 4: Recovery and expansion (2008-present)

The competitive environment changed in 2008, when the financial crisis swept

through global economy. As the biggest manufacturing base in the world, Guangdong

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province saw thousands of factories close. Without exception the nanomaterial industry

also encountered a downturn. Many firms withdrew from the market, which left more

market share for some surviving innovative firms.

The unexpected aid of global recession has strengthened GBS’s determination to

continue with innovation-based growth. It has also made them more aware of the

importance of networking with suppliers and consumers in a tough economy. To

maximize regional and local preferential policies and resources, GBS has recently built

four manufacturing companies: Jilin Shuangji New Materials Co. Ltd, Guangzhou;

Dongjie Rubber Products Co. Ltd, Leshan; GBS Silicon Material Co. Ltd., Lianyungang;

and GBS Silicon Material Co. Ltd. To reduce market uncertainty, GBS integrated itself

into a critical linkage in China’s SiO2 industry chain by cofounding the South Nano-base

of China and the Guangzhou Baiyun Nano-powder Development and Application Center.

Today, GBS is becoming a leading nanotechnology company with an annual production

capacity of 6000 tons of nano-fumed silica and a variety of other nanomaterials. In the

current global downturn, GBS is still expanding its manufacturing bases in Sichuang,

Jiangsu, and Jilin province.

5. Innovation Barriers and GBS Strategy

The innovation trajectory of GBS has not been smooth at all. Like other Chinese

firms in the emerging technology, it has faced the three daunting challenges of

technology infeasibility, capital paucity and market uncertainty (Figure 4). Recall the

puzzle question that was raised in the beginning: why few domestic Chinese firms

manufacturing nano-fumed silica survived while others not under the same business

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environment. Or put the question in another way, what are the characteristics of those

survived NFS firm distinguishing them from the others? The successful way that GBS

has handled these challenges as illustrated in Figure 4 provides some insights to this

question.

(Figure 4 insert here)

The key approaches/strategies that GBS has used to achieve its current successful

market position can be generalized as follows:

1) Proactively spin into elite Chinese universities

Malsch and Oud (2004) suggest that a lack of highly qualified staff is foremost

challenge for technology-based firms (Malsch & Oud, 2004). GBS’ management was

aware of the problem of being short staffed with in-house R&D personnel from the very

beginning. After getting technology transfer from the Ukrainian Academy of Science,

GBS quickly selected Sun Yat-sen University as their first collaborator given their

existing network and spatial proximity. When asked why it chose Sun Yat-sen Univ, the

firm listed three reasons. It had expertise in the nano-fumed silica field with excellent

research infrastructure. It was easy to reach since it was in the same city as GBS. And

the reputation of Sun Yat-sen University serves as a signal of high-quality production in

domestic market. Following the principle of “Sending out, Invite in” GBS utilized various

cooperation mechanisms to cultivate and strengthen good relationships with Sun Yat-sen

university. For example, it provided free samples to university labs, offered internship

opportunities to recent graduates, and gave presentation and consultation to

collaborating universities on research frontier of leading nano-fume silica. During GBS’

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whole innovation process, its collaborations with universities were consistently

strengthened, even in tough times.

2) Actively participate in consortia building and industrial policy making

Learning from their previous experiences, GBS management has become aware

of how vital it is to developing horizontal and vertical network linkages to maintain

competitiveness. As noted by one GBS manager, “Ono sole firm possesses all

resources, capacity and power to incur innovation and make innovation sustainable.

Joint efforts among agents cross different sectors are necessary”. Serving as an

education base for graduate students of South China University of Technology, GBS has

developed close relationships and stable cooperation with elite Chinese universities to

tap into the public research infrastructure and knowledge base. As a key founder of

South Nano-base of China and Guangzhou Baiyun Nano-powder Development and

Application Center, GBS has formed alliances and consortia to acquire knowledge and

supply information by organizing its collaborators, suppliers, consumers, as well as local

industry regulators, or Guangdong New and High-Tech Bureau into networks. In 2009

GBS and Luoyang Iron Group co-proposed a project titled “Key Technologies Research

of By-product of Polysilicon", which was funded by National 863 Project, a prestigious

national program in China. In addition, GBS is one of the main companies charged with

drafting national standard GB/T20020-2005 for fumed silica, which makes GBS well

pronounced among China’s silica industry.

3) Commit to technological innovation and develop environmentally friendly products

In order to keep their competitiveness, GBS commits itself to serial innovations

and applied for independent intellectual property rights to each of their products. By the

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end of 2009, GBS had filed 22 patents with the State of Intellectual Property Office of

China with 14 being granted and 1 licensed. With 5 granted patents related to nano-

fumed silica, GBS stands out among the domestic industry as the top inventor in the field

of nano fumed silica (Table 2). GBS R&D researchers pay special attention to being

environmentally friendly by eliminating the environmental hazard of chlorosilane by-

products. Linking the upstream resources and the downstream products further enables

GBS into the Chinese silicon industry chain and dramatically reduces market uncertainty

for the company (Table 3). Under the flag of “green economy,” the governmental

regulations favoring environmentally friendly technology also make GBS process

innovation more likely to be offered with public funding, which helps attract venture

capital.

It is interesting to notice that in spite of rampant IPR violations in China, GBS is

enthusiastic to protect IPR via filing patents in the State of Intellectual Property Office

(SIPO). Our interview with the GBS indicates it as an effective defensive strategy against

international firms who are regarded as the main competitors by GBS and a signal for

attracting external funding. As explained by a GBS R&D manager. “...We are well aware

of the problem of weak protection of IPR in China. Not only foreign firms but also

Chinese domestic firms are the victims. For a variety of reasons, this cannot be changed

overnight. But, we still need to proactively file IPR at least in SIPO for competing with

MNEs in Chinese market.”

When asked about the question of the possibility of reverse engineering, GBS is

confident that given their leading status in Chinese market the partially disclosed method

in SIPO will be difficult for other Chinese nano-fumed silica to imitate within a short

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period, “Obefore they figure out the real formula, we are already push the innovation to

the next stage”, as noted by a GBS interviewee, “and more important for us, owning

independent intellectual property rights, we have more bargaining power to apply for

national funded program, which in return attracts venture capital for firm development”.

6. Conclusion

The puzzle of surviving NFS firms is a part of a more general debate concerning

the relations between public policy, business environment, innovation, and

entrepreneurship. Given the long chain of different gears from upgraded technology to

successful innovation, high variations among enterprises performance are expected

(Karlsson, Stough, & Johansson, 2009). Undoubtedly many factors contribute to the

success of GBS’ innovation-based growth. In addition to the firm’s strategies elaborated

above, the interviews highlight the role of business environment in which GBS operates.

These include governmental incentives for R&D, the sufficient supply of raw materials of

fumed silica in China, and the reduction of competitors due to the recent global economic

recession, etc. These factors all affect the firm’s strategies, leading to a complex chain of

events over an extended period of time (Figure 3). This development pattern, which

features a repeated cause-effect-cause-effect pattern, supports the logic model that

emphasizes the sequence of staged events (Yin, 2008).

The path from initial ideas to successful innovation that GBS has followed

demonstrates that technology upgrading alone is not sufficient for innovation driven

growth. It is critical for enterprise to understand the business environment in order to

realize the value of innovation and to sustain innovation. As a latecomer to the field of

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nano fumed silica (hereinafter NFS), GBS has demonstrated an innovation model

featured by industry lead-government facilitate, which highlights 1) the go-between role

of government in innovation; and 2) the dominating role of firm in UIG link.

There is no doubt that the science-driven nature of the nanotechnology industry

calls for the government to protect and facilitate the industry in its nascent stage. This is

especially true for SMEs in emerging technology where the firms simply lack sufficient

R&D resources. In the case of GBS, the proportion of R&D funded by government is as

high as 10% to 30% varying by years, which suggests government funding is not only a

plus but also a necessity. In addition to direct funding, another mechanism that the

government can use is to “nourish the supply side” (Martin & Nightingale, 2000) by acting

as a go-between and encouraging the interaction of current or potential producers and

users. As pointed by the funding officer, implicit preference for joint R&D from academia

and industry acts as a catalyst to enhance the university-industry collaboration.

In addition to the undisputable primacy of government intervention in the initial

stage, the case of GBS also sheds some light on the question of who should assume the

dominant role in industry-university collaboration. The case of GBS argues that it is

enterprises instead of universities that should take the leading and dominating role

during the process of innovation and university-industry cooperation. The logic behind

this position is simple: universities are not technology users, nor product consumers but

knowledge producers. In spite of their advanced science and technologies, most

universities lack market sensitivity and rarely bother try to understand new technological

opportunities as they relate to market need. Thus, effective technology transfer calls for

the manufacturing company to take the leading role because it is the party that most

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clearly understands what is the desired of the final products regarding its market

potential in sufficient detail.

The interview also discloses a dual impact of MNEs on GBS development: push

down firm profits and pull up indigenous innovation. As claimed by the GBS senior

manager, nano-fumed silica products of MNEs are sold at very high prices to Chinese

consumers. Without GBS and other Chinese domestic firms, the prices of nano-fumed

silica would have been prohibitively high. To keep monopoly profits, foreign firms would

not sell their technology to China. That is one reason GBS actually only resort to

technology licensing from the UAS rather than MNEs in Japan, USA or Germany. From

the technological perspective, GBS is still inferior to those of MNEs. But their high profits

create living space for domestic firms like GBS. As pointed by GBS, some MNEs have

entered China by setting up joint venture companies exploiting cheap sources in China,

which further press GBS and other Chinese domestic firms to speed up innovation and

file more patents as a defense for future competition with MNEs in China’s market.

7. Discussion

As stated in the Mid- and Long Term Plan of S&T Development (MLP), China is

committing itself to becoming an innovation-driven society by 2020. At different levels,

the government has been allocating more and more funds to some key technology

domains including nanotechnology. Nationally, the 863 Program alone has allocated

170million RMB (approximately USD 25 million) for nanotechnology development. In

Guangdong province, the government has been developing a more intentional

nanotechnology development strategy. As listed in Guangdong Strategy of

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Nanotechnology Industry, Guangdong gives priority to industries which can utilize the

novelty of nanotechnology to upgrade product quality in traditional industries.

Unfortunately, in sharp contrast with huge investment, the output, which is manifested by

the number of innovative firms are unsatisfying low. One puzzle that remains unsolved is

how SMEs could pursue innovation driven growth when confronted by the three barriers

of technology infeasibility, capital paucity and market uncertainty.

Since the seminal work of Etzkowitz and his colleagues (1997, 1998, 2001), the

triple-helix model, i.e. promoting enterprise innovation via the interaction of university-

industry-government (often called the UIG model in China) has been well received

among Chinese policy makers as an effective way to deal with the above three barriers.

The UIG model in China has been taking the pattern of “one head and two wings” (Hu &

Mathews, 2008). The government (the “head”) assumes the role of innovation organizer,

and coordinates the other two spheres, i.e. university and industry to achieve enterprise

innovation (Zhou, 2008). As noted one of the glaring drawbacks of China’s national

innovation system is the lack of a clear connection between science and technology, a

problem, which is a source of great concern for harvesting heavily invested science and

technology.

Apparently the traditional triple helix model system, which depends heavily on

scientific and technological progress, cannot solve this lack of connection and thus will

not fit into China’s innovation context. Based on a success story of one company that

produces of nano fumed silica, this paper illustrates how a small- and medium-size

enterprises (SME) can capitalize on government policies and the dynamics of an

emerging market to implement a series of process innovations. The development path of

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GBS, the company examined in this study highlights the interplay of business strategy

and business environment and its impact on firm’s development. The “spin-in” model

demonstrated by this case study emphasizes the leading role of enterprises, which is

different from traditional triple-helix model, where university plays a central role in

technology transfer, commercialization, and innovation. It should be noted that the

purpose of this paper is not intended to make a statistical generalization. However, this

spin-in model can be an effective approach for linking university-firm collaboration in

developing countries which have a highly developed science capability but whose

commercialization capability remains underdeveloped.

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Acknowledgement

This research received sponsorship from the Gore Innovation Project, Chemical Heritage

Foundation (CHF). Any opinions, finding, and conclusions are those of the authors and

do not necessarily reflect the views of the CHF.

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21

Figure 1 Fumed Sillica Global Market Share: 2006

Data source: Jefferies and Company, Inc. “Cabot Corporation.” February 28, 2007

22

Figure 2 Fumed Silica Market in China: 1999-2007

Data source: The Development of Fumed Silica in China, 2008

23

Figure 3 Development Path of GBS

• Spin-in elite university;

• Raw materials: silicon

tetrachloride->organic

silica byproducts

• Established ISOMIS/OA;

• DET NORSKE VERITAS

ISO9001/14001 certified

• Applied for the first

invention patent

Prior conditions

1. Massive

demand for

nano-fumed

silica;

2. State

preferential

policies on

nanomaterials

technology

transferGBS

recoverstage and expansion

fierce

competition

fast

development

1999 2001 2003 2005 2007 2009

Economic

recession

Intermediate

outcomes

• Mastered the key

technology about

the surface

treatment of fumed

silica;

• Drafted the

national fumed

silica

standardization

late outcomes

• ISO 9000:2000 and

ISO14001:2004

certified

• 1000 tons/year

• Manufacturing

expansion

Initial outcomes

• Obtained fumed

silica production

line from UAS;

• Improved and

redesign the

production line

into 100

tons/year

Entrance

demand side: Market

pull side: Resource(organic

silica industry;

govt policy

24

Figure 4: Innovation Barriers and GBS Innovation Stragety

Nano fumed

silica

consumer

Leading

producer of

nano-fumed

silica

University-industry

collaboration

Government pulled

Market

uncertainty

Technology

infeasibility

Capital

paucity

UAS Technology

transfer

Input

Signaling

effect

Output

Series of gradual process

innovation

Venture capital

National and

regional program

Reputation

signaling

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Table 1 Chronological Development of GBS

1999 Obtained fumed silica production line from UAS

2000 Improved and redesigned the imported production line

2001 Built the first set single fumed silica production line of annual output of 100 tons/year Applied for the first invention patent

2002 Increased the mass production capacity to 250 tons/year

2003

Collaborated with elite Chinese universities

Establish ISOMIS/OA office automation system to realize the management of informatization DET NORSKE VERITAS ISO9001/14001 Quality Environmental Management System Certification

2004

First patent was granted

New NFS production line with China National Petroleum Corporation , Jihua Branch HL-150, HL-20, and HL-380 Series Fumed Silica were rewarded as “New Products of Guangdong Province” and “National Key Products” Awarded “Guangzhou Hi-Tech Enterprise”, “Technology Innovative Enterprise”, “Guangdong Provincial Intellectual Property Enterprise”

2005

Mastered the key technology of surface treatment about fumed silica Participated drafting the national standardization GB/T20020-2005 for Fumed Silica

2006

Awarded “Guangzhou Outstanding Innovative Private Company”

2008 ISO 9000:2000 Certified (ID :CN08/30323) ISO14001:2004 Certified (ID:CN08/30705) Expanding three manufacturing bases in other provinces of China

2009 Manufacturing capacity developed into1000 tons/year

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Table 2 GBS Patents Filed in SIPO

Note: All GBS patents were filed in the State Intellectual Patenting Office of China (SIPO). The cutting line of the legal status of these

patents is March 1st, 2010.

Table 3 Process for combini

monome

27

ning nano fumed silica industry and organic silicon organic silicon