ABB Group CEO suggests Shanghai deploy innovation in productivity growth

Shanghai, November 1, 2015 - At the 27th annual meeting of the International Business Leaders Advisory Council (IBLAC) for the Mayor of Shanghai themed with Accelerating Shanghai's Development into a Center of Innovation in Science and Technology with global Influence, the CEO of ABB, the world's leading power and automation technology group, Dr. Ulrich Spiesshofer, delivered a speech titled "Innovation in the service of productivity growth" to share ABB's global experience with Shanghai and make recommendations on how Shanghai can tap the great potential of its manufacturing industry through innovation.

Dr. Ulrich Spiesshofer said that for a manufacturing-based economy like China, it is essential to enhance the productivity of the manufacturing industry. In May this year, the Chinese government announced the "Made in China 2025" plan to promote the Chinese manufacturing industry to evolve from big to strong and enhance its global competitiveness. Dr. Ulrich Spiesshofer noted that in order to realize the transformation and upgrading of its manufacturing industry, China needs to focus on innovation that drives productivity growth by lowering costs, increasing efficiency and better meeting customers' and end users' needs. This requires an approach that not only encourages new ideas but also translates those ideas into tangible products, processes, services and organizational models that add value.

In the development of innovation-led economy, Shanghai has been pioneering scientific and technological innovation in China. At present, the number of R&D centers settled by multi-national corporations in Shanghai accounts for nearly a quarter of the total number in the country. The proportion of Shanghai's investment in R&D in its GDP also rose from 2.8% in 2010 to 3.6% in 2014, reaching the level of developed countries. Building Shanghai into a scientific and technological innovation center with global influence has become one of the important development goals of the city.

"While investment in R&D is leading to more innovation and patents, the Shanghai government can ensure that these have a significant impact on productivity by continuing to strengthen the protection of intellectual property, encouraging universities and research institutions to establish closer ties with enterprises to improve the conversion rate of high-tech achievements, and making more efforts from the aspects of citizenship policy, entrepreneurial environment and the urban environment to attract more innovative talents." Dr. Ulrich Spiesshofer suggested.

Dr. Ulrich Spiesshofer emphasized that it was very important for local enterprises, especially small and medium-sized enterprises, to understand and leverage automation and digital technologies to realize the goal of "Made in China 2025", while continuing to strengthen cooperation with multi-national corporations to establish a mutually dependent, mutually supporting innovative economic ecosystem composed of companies with professional skills. Take a local supplier of ABB for example. A pressure sensor jointly developed by this supplier and ABB Robotics has broken the long-time monopoly of a foreign company in the product market, with the price only half the foreign company's quote. Now, this pressure sensor is about to be installed on ABB robots to serve computer, communications and consumer electronics (3C) industries.

The government plays an important role in the process of promoting innovation to be transformed into productivity. Dr. Ulrich Spiesshofer took Sweden's Robotdalen, or Robot Valley project, which ABB had the privilege to be involved in, as an example to illustrate. The Swedish government's innovation agency started funding Robotdalen in 2003. After understanding the needs of various stakeholders, Robotdalen brought them together. Through incentives, it mobilized the enthusiasm of all parties to explore cooperation projects. Till now, Robotdalen has gradually formed a regional innovation system composed of robot manufacturers, sub-contractors, investment companies, intermediaries, public agencies and universities, with a focus on commercial applications. As of 2015, Robotdalen has given birth to 28 new companies and 32 new products and has attracted many international companies related to the robot industry chain to settle.

Based on the experience of Robotdalen, Dr. Ulrich Spiesshofer made the following recommendations for Shanghai:

Adhere to market-oriented research and development to ensure innovation in the service of productivity
Make full use of the city's existing advantages
Make clear the main challenges which facing Shanghai, focus support policies on measures that can address the challenges, and develop specific plans and solutions
Fully understand the differences in the behavior patterns of private enterprises, academia, the public and other participating parties to ensure that the incentive policies meets their respective needs
Ensure that the agency which leads innovation and development projects is composed of really competent persons
Support educational activities in related fields, extensively publicize the projects and opportunities brought by the projects, and ensure the reserve of talents and skills

As a member of IBLAC for the Mayor of Shanghai, Dr. Ulrich Spiesshofer was also invited to attend the "2015 IBLAC Business Leaders in Shanghai Jiao Tong University" event on October 31 to discuss with university teachers and students what quality innovative talents should possess and how to cultivate innovative talents through university-enterprise cooperation.

Shanghai is an important base for the development of ABB in China. In 1994, ABB set up its first joint venture in Shanghai. Today, ABB has more than 4,800 employees, 1 branch and 6 local enterprises in Shanghai, including ABB Engineering (Shanghai) Co. Ltd., ABB Shanghai Transformer Co., Ltd., ABB Shanghai Motors Co., Ltd., ABB Electrical Machines Ltd., ABB Shanghai Power Transmission Co., Ltd. and ABB Shanghai Free Trade Zone Industrial Co., Ltd. In addition, ABB has subsequently set up 10 global business centers in Shanghai, including ABB Robotics Global R&D Center and ABB global manufacturing base for its marine propulsion system, providing comprehensive support for the development of ABB global businesses.

ABB is a Global 500 company and a leader in power and automation technologies that enable utility, industry, and transport and infrastructure customers to improve performance while lowering environmental impact. The ABB Group of companies operates in around 100 countries and employs about 140,000 people. ABB has a full range of business activities in China, including R&D, manufacturing, sales and services, with 19,000 employees, 39 local companies, and an extensive sales and service network across 126 cities.

For more information on ABB, please visit http://new.abb.com/cn, Sina Weibo: @ABB China, Official WeChat Account: abb_in_china, Official WeChat QR Code: