European universities' expertise and ability to do theoretical research make them valuable associates

In 1984, China's Qingdao Refrigerator Co had a dismal reputation for defective products. Its newly appointed managing director, Zhang Ruimin, knew something had to change.

Zhang famously led his workers in destroying 76 faulty fridges with a sledgehammer. But he didn't just rely on this powerful symbol: He turned to Europe for practical help.

The company forged a partnership with Germany's Liebherr, renowned for its premium products.

QRC, rebranded as Haier, revolutionized its standards and built a first-class reputation - not only in fridges, but in TVs, smartphones and tablets. Today, its annual revenues exceed 200 billion yuan ($31 billion, 28 billion euros).

China's economy has been transformed alongside Haier. But the opportunities have changed. China's most ambitious firms don't need sledgehammers. Nor do they necessarily need German manufacturing know-how. What they need is innovation in research and development.

Arguably the most exciting source for that innovation remains in Europe: Within our world-class universities.

That's why China's smartest firms, like Huawei, CSR and AVIC, are pursuing collaborations with some of the world's great universities, including my own, Imperial College London.

They are attracted to Europe, and especially London, by its large network of high-performing universities, experienced in industrial partnerships and brimming with talent. London's outstanding workforce, cutting-edge tech companies, startup culture, early adopting consumers and access to markets, when combined with its universities, makes for a potent business proposition.

Universities add real value. Where industrial R&D can be constrained by the need to reduce uncertainty and produce short-term benefits, universities offer a longer-term perspective to tackle fundamental questions. From climate change to making big data work for society, from aircraft efficiency to personalized healthcare. The challenges are huge, but so are the potential rewards.

Universities are especially well placed to work on fundamental blue-skies research. We are used to working in areas where there are few established norms and where the results can lead to the creation of technologies for which there are no current established markets. They provide the crucible for completely new areas of science and technology to emerge, like biomedical engineering, data science and synthetic biology, all of which have established major new fundamental research centers at Imperial in the past few years.

The development in the UK of graphene - the revolutionary strong, light, translucent, heat and electricity conducting material - exemplifies this. Markets will be created, disrupted and transformed by graphene's applications in electronics, medicine, renewable energy and chemistry.

Naturally, not all firms wish to invest in such long-term, speculative propositions - at least not in-house. Many Chinese firms are finding success by approaching European universities in partnership to develop ideas that lead to the creation of new underpinning technologies, platforms and standards. Huawei's Data Science Innovation Lab at Imperial is on course to achieve precisely this.

Universities also offer stringent quality control processes and independent peer review systems that test results - qualities that can be harder to access in the private sector without academic collaboration. In the UK, we have a Research Excellence Framework that measures and compares the quality of each institution. It incentivizes academics to publish in the highest quality journals and compete for core research funding, which rigorously tests ideas, questions and research methods at the earliest stages of research design. This form of competition helps drive standards ever upward, while creating clusters of talent that are also able to collaborate on the next big ideas.

These are the building blocks for a university environment that is inquisitive, independent and international: all traits that attract ambitious Chinese companies looking to innovate.

Universities combine a depth of understanding in core academic disciplines with the ability to tackle multidisciplinary challenges. Ideas are challenged and questions asked in a different setting with a striking cultural mix; Imperial takes students from over 130 countries, including more than 2,000 from China. We think and work globally by default.

When I meet colleagues from Chinese businesses, they instantly grasp that universities have a mature, practical capability in working with corporate partners. Imperial has been working with companies like Shell, Rolls Royce, BP and IBM for many decades. We expect our collaborations with Chinese firms to take a similarly long-term approach.

Global corporations look to European university partners for network benefits, too. You can see this at Imperial Business Partners where major players like Shell, LG, BT, Huawei and GE get access to opinion formers, top academics and each other. This network effect is amplified within world cities like London, which has more top-performing universities and more international students than any other city in the world.

This collaborative network effect can be seen in smart cities through initiatives like the London DataStore. This mayor of London-led initiative lets anyone see the "pulse" of the capital - and utilize that data in countless ways. Social entrepreneurs, startups and academics are empowering Londoners by mapping tube delays, property prices, crime rates, pollution and health. UK companies like CityMapper are taking these innovations to other great cities. Students and academics collaborate with entrepreneurs and technology companies to create new businesses, opening new markets for products and services in health and well-being, city infrastructure and financial services.

Chinese companies have enormous potential for R&D-led growth. They do not yet invest as much in R&D as their US, European and Japanese rivals. They are transitioning from being fast followers of innovation to becoming innovation leaders. You can see this at Xiaomi, Tencent, Baidu and Alibaba. These firms and their peers will look to consolidate their lead through further partnerships with European universities. The Zhang Ruimins of tomorrow recognize that.

The author is vice-president of development and innovation at Imperial College London. The views do not necessarily reflect those of China Daily.

( China Daily European Weekly 09/05/2015 page9)