Makers Towns emerge as space for innovation and entrepreneurship in China

Abstract : With the boom of innovation and entrepreneurship, various maker towns have emerged as a kind of characteristic town throughout China in recent two years. In these "special spaces", makers turn more ideas into production.

With the boom of innovation and entrepreneurship, various maker towns have emerged as a kind of characteristic town throughout China in recent two years.

According to "Development and Strategy Consulting Report on China Characteristic Town Construction During 2018-2022" complied by China Investment Consulting, one of China’s leading consulting institutes in industry strategy, the subject of makers town is high-end talent (as well as universities and research institutions which play a role of carrier) and innovative entrepreneurship talents.

Hangzhou Dream Town, officially opened in March 2015, had attracted nearly 1,000 entrepreneurs in a month. Many makers in the town are graduates of Zhejiang University or former employees of Alibaba with high professional levels.

Obviously, the characteristic makers town has become a "maker space" with a number of makers where “makers” with common interests, often in computers, machining, technology, science, digital art or electronic art, can meet, socialize and collaborate. In these spaces, “makers” can use open source hardware and the Internet to turn more ideas into products.

Makers in China are ushering in the development trend of mass innovation and entrepreneurship and the Internet+. From smart manufacturing to open source hardware, and from desktop workshops to cloud factories, the makers are reshaping China's emerging industries, and activating the endless possibilities of innovation for all.

Maker agglomeration naturally brings about transformation and upgrading of town economy and industry in terms of innovation and entrepreneurship, which has created a new point of economic growth.

Maker Town Operation Mode

“Maker space” helps “makers” realize their ideas, and it has developed different main business modes.

According to the report, there are six types of maker space modes that are popular on the market. They are enterprise platform, investment driving, media driving, vertical industry, open space and real estate thinking, listed as follows:

1.Enterprise platform

•Based on the existing technology, industry and other advantages of resources, to provide innovative business services for entrepreneurs;

•Without early pursuit of rental income, focusing on the exploration of potential shares in the incubator to help build new business model in the future;

•By looking for new technology for the upstream business, to find the profit points.

•Typical representatives: Baidu developer venture center, Tencent maker space, Microsoft venture capital accelerator, etc.

2.Investment driving

•Based on the construction of financing platform, to attract high-quality entrepreneurial projects;

•By providing financing services ahead of time, to share the growth dividend and improve the success rate of the entrepreneurial team.

•Typical representatives: Sinovation ventures, AngelCrunch, etc.

3.Media driving

•Through the spreading of business projects on a mature media platform in a very short period of time, to attract the attentions and to expand the user base;

•Based on docking with investors, to determine the interviews and investment between projects and capital party;

•Through shareholding, to collect the matching commission, data and consulting service profit.

•Typical representatives: 36 Kr, Entrepreneur, etc.

4.Vertical industry

•Targeted for a certain industry incubation, to provide advanced technology and incubation funds, and to help entrepreneurs to achieve technology landing and industrial development;

•Mainly for the realization of industrial clusters and industrial upgrading.

•Typical representatives: Zhongguancun Cloud Valley, E-Town Cloud Valley, Stone Valley Light Culture Industry Incubator Base, etc.,

5.Open space

•Providing the basic office spaces for entrepreneurs, while providing the shared office equipments, business mentor services, and financing matching services;

•Profit from lower rent, supply of financing and recruitment services.

•Typical representatives: 2W Coffees, YOU+ International Entrepreneural Community, Garage Coffee.

6.Real estate thinking

•Providing the basic office spaces for entrepreneurs, while providing the shared office equipments, business mentor services, investment and financing docking services;

•Profit from rental office, investment and financing docking, industrial and commercial registration, legal and other financial services.

•Typical representatives: SOHOQ3, URWORK.

In terms of operation mode for these categories of maker spaces, the profit is mainly achieved through the model of "one body and two wings", that is, rental income, value-added services (business registration, legal finance, entrepreneurship training, recruitment services, etc.) and equity investment.

However, due to the different objectives of the leader, the profit model also has its own characteristics. For example, the development of space-based media mainly relies on value-added services to make profit, while the enterprise platform-based and investment-driven mode attach more emphasis on equity investment returns, for example, real estate thinking will emphasize rent income and added value of real estate. (END)