How do ceramic companies innovate and transform?
On the afternoon of January 11, at the "2020 National Ceramic People Conference and 2020 China Ceramic Brand Conference", President of the China Association of Listed Companies, President of the China Enterprise Reform and Development Research Association, and former director of China National Building Materials Group/Sinopharm Group Chang Song Zhiping (known as "China's Kazuo Inamori") gave a keynote speech on "Innovation and Transformation of Enterprises". Based on his personal experience of leading two "Fortune 500 companies", he shared the innovation and development of ceramic enterprises Strong core points.
Song Zhiping proposed:
1. Ceramic companies must have their own laboratories. Without laboratories, we can only produce, keep buying production lines, and keep repeating.
2. If a company does not pay attention to disruptive innovation, it will be easily disrupted.
3. Ceramics and building materials companies must take the road of intelligence and reduce employment.
4. Innovation is not just high technology, but also medium technology, low technology and zero technology. Zero technology refers to the innovation of business models.
5. Enterprises must not only pay attention to innovation, but also capital. Capital is the leverage entrepreneurs use to innovate. Enterprises cannot innovate without money.
6. Only when a company is listed can it run in the sky. If it is not listed, it can only run on the ground. What you see thousands of miles up in the sky is different from what you see on the ground.
The following is Song Zhiping’s speech (selected):
Ceramic companies must have their own laboratories
Innovation can be roughly divided into three modes: 1. Imitation innovation; 2. Integrated innovation; 3. Independent innovation.
When it comes to imitative innovation, the first thing that comes to mind is plagiarism, infringement of intellectual property rights, etc. In fact, imitative innovation is not a backward innovation model. Over the past 40 years of our reform and opening up, we initially started with imitative innovation. For example, today, most of Japan's entire industrial system and product companies adopt imitative innovation, so it has become the first country in the East to reach a developed level. The advantages of imitative innovation are short time, quick results and low cost, which is suitable for enterprises in late-developing economies.
However, with the development of the economy, we have changed from a follower to a parallel competitor, and some companies have even reached the leading position. Blind imitation is no longer enough. In addition, the US 301 Act, etc., has certain restrictions on patent rights and technology rights. Strict protection requirements, so we can no longer simply copy and imitate innovations. What to do? We rose toIntegrated innovation includes both reference and imitation, as well as our own originality. Combining them is called integrated innovation.
The term "integrated innovation" was invented and proposed by Americans in 1972. Today, the innovation model of most enterprises in our country is integrated innovation, such as electric vehicles. Tesla has it, BMW has it, China's BAIC has it, everyone has it. In fact, if you look at the structure of cars, they are all similar, but each has its own technology and differences. Combining various innovative elements to form something new of its own is called integrated innovation.
Another example is mobile phones. Each brand has its own characteristics and can learn from each other in terms of technology. Today, a large number of innovations are integrated innovations. Companies all over the world have to learn from each other, and it is impossible to close the door and do it all on their own. I think the same goes for making architectural ceramics. Companies have their own technologies, but there are also technologies that can be borrowed from each other, which is to combine various production factors to form new innovative attempts.
However, the problem we are encountering now is "stuck". Many advanced foreign technologies are "stuck" for us, so we must increase our efforts in independent innovation. Do you think China National Building Materials Co., Ltd. makes cement and glass? I said yes, cement and glass are the largest in the world, but I have also made many new things, such as carbon fiber, T800, and T1000, which are used in large aircraft as a reinforcing material in the fields of aerospace and aviation. In the past, We can't make these things, but now China National Building Materials has launched it, and it accounts for 70% of the supply in the Chinese market. There are also thin-film solar cells such as copper indium gallium selenide and electronic thin glass. In the past, the thin glass used in our LCD displays was all imported. Now China Building Materials can provide the glass for LCD displays and mobile phones.
Where did these technologies come from? This is because ten years ago, China National Building Materials established an international laboratory and had first-class investment. Such a laboratory provides R&D formulas and new technologies to support the R&D and production of electronic thin glass.
What I mean by giving this example is that architectural ceramics companies must have their own laboratories. Without laboratories, we can only produce, keep buying production lines, and keep repeating. Recently in Hefei, I saw an international-level cement research and development center, which is expected to be put into use this year. Our country is the world's largest cement producer. We sold 2.4 billion tons of cement last year. However, we do not have a decent international cement laboratory. This is our problem, so we must catch up. On the one hand, we must vigorously develop integrated innovation, and at the same time, we must seriously Carry out independent innovation.
Enterprises must pay attention to disruptive innovation
We should also pay attention to continuous innovation
In addition, it is necessary to combine sustainable innovation and disruptive innovation. 1997, Master of Innovation Theory, Harvard Business School, USAProfessor Clayton Christensen believes in his famous book "The Innovator's Dilemma" that if an enterprise relies solely on management, it will decline without innovation. At the same time, he believes that the most important thing about innovation is disruptive innovation. What is disruptive innovation? Digital cameras have subverted film, DVDs have subverted video recorders, and now electric cars are subverting gasoline cars...
If a company does not pay attention to disruptive innovation, it will be easily disrupted. An industry, an industry, and an industry often only have disruptive innovation once every 15 to 20 years, so I think everyone must be special before disruptive innovation comes. Pay attention to.
An enterprise must pay attention to both disruptive innovation and sustainable innovation. Nowadays, so many car manufacturers are making both gasoline and electric cars. Electric cars may not make much money. Gasoline cars mainly make money, because the number of gasoline cars in the world is 1.4 billion, while electric cars are less than 20 million. vehicles, but on the one hand, automobile manufacturers continue to innovate in gasoline vehicles, such as reducing their emissions, changing their styles, etc., on the other hand, they have invested in electric vehicles. Although electric vehicles and gasoline vehicles are both cars with four wheels, Open the hood and you'll find that their logic is completely different.
How to strike a balance between disruptive innovation and sustainable innovation? Christensen believes that disruptive innovation requires another group of people to start a new business, because disruptive innovation and sustainable innovation seem to be in the same industry, but in fact they are completely different ideas. It will be very difficult to use these sustainable innovations and old technical personnel to build this new technology. Sustainable innovation and disruptive innovation should be separated. If a company invests in disruptive innovation, it usually has to start from scratch.
Secondly, pay attention to the innovation of business models. Business model innovation was also proposed by Drucker in 1985. He believed that innovation is not just high technology, but also medium technology, low technology and zero technology. Zero technology refers to the innovation of business models. For example, KFC and McDonald's do not have much technology, but they create value through business models. This is business model innovation. Another example is our consumer Internet platform, Taobao, Pinduoduo, Didi Taxi, etc., all belong to business model innovation. , these are very important innovation models and deserve serious study. We must first choose innovation goals, and secondly, choose innovation models, so that we can innovate in a down-to-earth manner and succeed.
The ceramic industry must take the road of intelligence
Second, continuous three-dimensional development. The three dimensions are summarized as technology, Internet or digitalization, and capital. Technology is the first dimension. The survival of any enterprise depends on technology. Of course, technology is not necessarily high technology. Americans once counted that high technology only accounts for a quarter of the contribution to the entire society. Medium technology, low technology and zero technology Accounted for three-quarters.
YesFor enterprises, innovation is mainly at the technical level. Every enterprise must rely on technology to make products better, improve quality, and reduce production costs. To put it more broadly, focus on four things: 1. Clarify your core business; 2. Have your own core expertise and your own diamonds. If a company has no expertise and is still doing "bulk goods", it will definitely become more and more difficult. ;3. Where is the core market? When I was working in the cement industry at China National Building Materials Group, the transportation radius of cement was only 200 kilometers. China National Building Materials’ cement business accounted for 20% of the Chinese market, but this 20% was not evenly distributed, but had 45 core areas; 4. Core Who are the customers? Can you add value to these core customers?
Doing a business is complex and complicated, simple and very simple. You must have technology and your own core expertise. If it is just ordinary technology, how can you compete?
The second dimension is the Internet or big data and digitization. In the past 20 years, the consumer Internet has promoted the development of China's economy, so we cannot simply reject the Internet. We must either "Internet +" or actively "+ Internet". The biggest benefit of the Internet is "information disintermediation", which reduces the cost of the middleman. . In the past, due to information asymmetry, manufacturers did not know where their customers were, and customers did not know where their manufacturers were. This has been the case for thousands of years. However, the Internet has broken this problem. If a company is outside the Internet, it will not be able to survive today. of.
Following this is the Industrial Internet. China’s market entities include 34 million companies and 93 million individual industrial and commercial households. These many market entities give our Industrial Internet a huge user base. In addition to the Internet, a very important impact of digital applications on enterprises is intelligence. After I became the president of the China Listed Companies Association, beyond my imagination, the intelligent development of listed companies' production has advanced by leaps and bounds in recent years.
The same goes for the building materials industry. In the early days of liberation, a cement factory with an annual output of 2 million tons required 12,000 workers. The Lunan Cement Factory 20 years ago required more than 2,000 workers for the same production capacity. A cement plant with an output of 2 million tons only requires 200 workers, and the latest smart factory only requires 50 people. With three shifts of more than a dozen people in each shift, it has actually become unmanned. This kind of intelligence is developing very fast.
Why should we promote intelligent development? Because labor costs have been reduced, labor costs are now getting higher and higher, affecting the competitiveness of enterprises. One of the reasons why the home appliance industry moved from Japan to Taiwan and South Korea, and then from Taiwan and South Korea to Dongguan and Kunshan was that labor costs increased. Back then, the labor cost in Dongguan was 600 yuan/month including food and accommodation. Now it is 6,000 yuan/month and no one is doing it, so the industry has begun to migrate.
On the one hand, we are migrating, but on the other hand, we cannot let goAbandon its global manufacturing position. Now the opportunity has come. Intelligence can protect our manufacturing industry from being plagued by labor costs. This was a problem that the Japanese did not solve back then. Now the Japanese regret it very much. It is very difficult to move the manufacturing industry back because the entire supporting industry has been transferred out.
Ceramic and building materials companies must take the road of intelligence and reduce employment. Since the Industrial Revolution, the goal of every technological revolution and innovation has been to reduce manual labor. Every revolution has brought new prosperity. The same goes for intelligence, which has solved the problems of high corporate costs and relocation of industries.
The most important thing for enterprise development is not capital, but capital!
The third dimension is capital. What is the most important thing in running a business? Many people say it's funds, but I say it's not funds, it's capital, because borrowed funds have to be repaid, and funds have costs. The key is capital. Have you obtained the capital?
I went to Hainan Island, and the leaders of Hainan told me that there are two things that are most lacking now: one is technology, and the other is capital. I said that's not true. I think what is lacking most is capital. Hainan's equity capital is underdeveloped. Hainan must first leverage the capital market.
Recently, I keep telling you about the "Hurun Unicorn Ranking". What is a "unicorn"? In ten years, if your company's valuation can reach 1 billion U.S. dollars, it will be called a "unicorn company." Valuation is not sales, profit, or market value. The market value is after the listing, but the value given by the capital market. Your valuation. Last year, Hurun's "Unicorn Ranking" had a total of 586 companies, 227 in China and 233 in the United States. There was only 6 companies between China and the United States. The two countries accounted for 80% of the world's unicorn companies.
China's "unicorn companies" are mainly concentrated in the four major cities of Beijing, Shanghai, Shenzhen and Hangzhou. The number of "unicorn companies" in these four cities accounts for 82% of the country's total. In other words, these places are hot spots for capital and innovation. Capital and innovation are highly integrated, so their economies are developed.
So, I think many places should not only pay attention to innovation and entrepreneurship, but the most important thing is to pay attention to capital. Schumpeter mentioned in "Economic Development Theory" in 1912 that capital is a lever used by entrepreneurs to innovate. Enterprises cannot innovate without money.
Why innovations in the United States are emerging in endlessly is because the United States has huge capital market support. Today our country is aware of this problem. We have the Science and Technology Innovation Board. Last year, the financing on the Science and Technology Innovation Board accounted for 50% of the entire A-share financing. Everyone All the money we have is put on the Science and Technology Innovation Board for innovation, so I think that in the process of running a business, we must not only pay attention to funds, but the most important thing is to pay attention to capital.Our technology, products and capital are connected.
At the end of last year, there were 130 listed companies worth hundreds of billions in our country. If we include listed companies in Hong Kong, we had 210 listed companies worth hundreds of billions. In 2018, we only had 60. In other words, in the past In two years, our high market value companies have more than doubled. This is China's capital market.
Why win in the capital market? CATL has a market capitalization of 900 billion yuan. For CATL, just issuing a small amount of stock can lead to a big project. In the past, we worked on a big project and invested several billion or tens of billions of yuan. Where did the money come from and did the government support it? Can bank loans support it? Now all the social capital has gathered to support you, and your career will start.
For the capital market, billions of yuan or tens of billions of yuan are nothing. If there was no capital market, could such a large project be possible? Therefore, the capital market is very important for innovation. Without capital, it is useless. I hope everyone will not forget capital when running a business.
"Only when a company is listed can it fly in the sky"
Just now, I mobilized Chairman Li (Li Zhilin) of Jianyi Marble Tile to promote the listing of the company. Only when a company is listed can it run in the sky. If it is not listed, it can only run on the ground. What you see thousands of miles above the ground is different from what you see on the ground. Only by integrating with the capital market can it develop rapidly. Of course, there are also some requirements in the capital market, and not everyone can fly if they want to.
About the current situation of China’s capital market. By the end of 2020, our capital market will only be 30 years old, while the stock market in Amsterdam, the Netherlands, has been in existence for more than 400 years, and the stock market in the United States has been in existence for more than 200 years since the signing of the Sycamore Agreement. In the past 30 years, despite twists and turns, our capital market has developed very well.
There are now 4,145 listed companies in our A-share market. The total market value at the end of last year was nearly 80 trillion yuan. The total operating income created accounted for 50% of the national GDP, and the profits created accounted for 50% of the national corporate profits. That is to say , these listed companies are our "half of the country", and the dividends are also good, especially in the past few years, more than 1 trillion yuan in dividends have been paid every year, which has increased investors' sense of gain. This is the current situation of our capital market, which is developing rapidly.
During the "14th Five-Year Plan" period, my country's capital market will enter a period of stable development. It is very important for the capital market to do four things well. First, the fundamentals of the economy. The fundamentals of our entire economy are stable and improving. Among all the major economies in the world, we are the only one with positive growth in 2020. Recently, our product exports in the single month of November wereThe trade surplus has reached 75 billion U.S. dollars, and it is difficult to find a box of exports. China's manufacturing industry is supplying the world and supporting economic development during the global epidemic. This is the current situation.
The second is the level of supervision. What is our level of supervision? Taking "customized system, non-intervention, zero tolerance" as the guiding principle, this actually reflects marketization and legalization. The capital market is a very sensitive market and requires strict systems. However, it is a market itself and should follow the laws of the market without intervening too much.
The third is the quality of listed companies. Listed companies are the main body and cornerstone of the capital market. Quality is very important. How to ensure the quality of these listed companies? In October last year, the State Council issued the "Opinions on Further Improving the Quality of Listed Companies," proposing that listed companies should improve their governance levels, improve information disclosure levels, and become better and stronger listed companies. The quality of listed companies in the capital market is gradually improving.
The fourth is investor ecology. There are a total of 176 million investors in our country, of which 175.7 million are natural person accounts and only 412,200 institutional investors. This structure is different from the United States and Europe, which are basically institutions. In order to have a good relationship between the capital market and the investor ecosystem, on the one hand, we are now vigorously developing institutional investment. At the same time, retail investors buy funds from institutions, and the funds help them invest. This is a good change. There are many small investors in China. The key is to guide them correctly, not to let them go astray, and to have high-level people help them manage their finances.
China is a big saving country, with total savings accounting for more than 40% of GDP. There are about 25,000 private equity fund managers in China, with an investment amount of only 15.8 trillion yuan. The total market value of A-shares is about 85 trillion yuan, accounting for about 80% of GDP, while the total market value of U.S. stocks is about 365 trillion yuan, which is 2.6 times its GDP. This just shows that China's capital market has huge potential, and there is room and funds to increase the proportion of direct financing. If part of the savings funds are converted into investment funds, the entire capital market can be prosperous.
Compared with the United States, China's capital market has a lot of space and potential. This is the confidence of our capital market. Therefore, the capital market is very important for China's next economic development. Doing a good job in the capital market is also very important for the development of enterprises. Therefore, if we can see clearly these four aspects, if the fundamentals are good, the regulatory level will be improved, the quality of listed companies will be improved, and the investment ecology will be improved, our capital market will be able to enter a period of stable development.
(This article is reproduced from Ceramic Information)
