Chapter 98

After seeing off the delegation of mainland school principals, Li Xuan convened a closed-door meeting with several company presidents and vice presidents to discuss cooperation with mainland universities and research institutions.

"The overall level of the electronics industry on the mainland is relatively backward, but it has hundreds of universities, over a hundred research and design institutes, and more than 100,000 professional engineering and technical talents. If we can harness this force, it will undoubtedly greatly enhance our company's research and development competitiveness!" Li Xuan tapped the collected data with his fingers.

"Mr. Xuan, what you're saying is just data on paper, but we don't understand the actual situation on the mainland. Rushing into an investment could very well be a futile effort!"

Wang Ying, the vice president of administration, was the first to express opposition. She felt that Oriental Electronics' current R&D investment was already too aggressive. In her view, the foundation of Oriental Electronics was the arcade game industry, but the company was only developing five or six new arcade projects. Among them, only "Super Mario Bros." was making rapid progress and could be launched in the market within the year.

Even if we include the "Pac-Man" game recently acquired from Namco in Japan, the company would only have two new games to release in the second half of the year. This was far from matching the dozens of new games that competitor Sega could release annually.

"Hong Kong Blocks" and "Tank Battalion" could become instant hits, but that didn't guarantee that "Super Mario" would continue to achieve success. As for "Pac-Man," Wang Ying was not optimistic about its prospects. It had already been proven a failure in the Japanese market, and her boss had foolishly spent six million dollars to acquire its copyright.

Even with money, it shouldn't be spent recklessly. Although Oriental Electronics was currently very profitable and had ample cash, if the next new game, "Super Mario," didn't become as popular as expected, and the two old games, "Hong Kong Blocks" and "Tank Battalion," passed their peak sales period, the company's cash flow would dry up immediately.

In Wang Ying's view, Oriental Electronics was like a blazing fire, looking splendid on the surface but fraught with hidden dangers. While investing in handheld game consoles and home video game consoles could be seen as solidifying the company's foundation within the industry, investing in electronic laboratories and semiconductor laboratories was purely blind expansion.

Li Xuan shook his head with a slight bitter smile. He wasn't unaware of Wang Ying's concerns; she had expressed her views several times before. But Li Xuan couldn't tell her that "Super Mario" would achieve even greater success than "Hong Kong Blocks" and "Tank Battalion."

Even if he did, she might not believe him. He could only wait until "Pac-Man" was released in the U.S. next month and use the actual sales figures to reassure her and others in the company who shared her views.

"Annie's point is somewhat valid!" He Guoyuan said with a furrowed brow. Annie was Wang Ying's English name. "The political system on the mainland is completely different from Hong Kong, and there is no complete legal framework to rely on. Especially, the mainland government has not yet established laws to protect intellectual property. Even if we achieve research results through cooperation with mainland research institutions, we might be infringed upon and unable to gain real benefits!"

The first Patent Law in China was only expedited and enacted in 1984 due to the strong urging of the German side during negotiations to establish the Sino-German Volkswagen Automotive Company, to protect their intellectual property.

"Even if we are infringed upon by mainland enterprises, it doesn't matter. For a considerable period, our main market for Oriental Electronics will definitely be Europe, America, and Japan. As long as we can timely secure international patents for relevant research results, losing the mainland market is entirely acceptable!"

Li Xuan had never considered how much patent fees they could collect in China in the 1980s. Even with the enactment of the Patent Law, domestic enterprises would continue to infringe for a long time.

"How do you plan to cooperate with mainland institutions?" Han Peng, who had just returned from the UK and was still jet-lagged, asked, his fatigue evident on his face.

"Mainly in two aspects: talent exchange and project委托研发. For the first point, talent exchange, I hope to make it a long-term investment. We will rely on the semiconductor and electronics laboratories, providing a certain number of slots each year to universities and research institutes on the mainland.

We will invite some of their outstanding middle-aged and young scholars and professors to Hong Kong for academic exchanges lasting one to three years. This way, we can gradually build Oriental Electronics' reputation in the mainland and provide a continuous supply of excellent research talent to the two laboratories!"

Li Xuan paused and continued, "As for project委托研发, we can refer to our current cooperation model with the Chinese University of Hong Kong and the University of Hong Kong. The two laboratories will open research project applications to mainland partner universities. Projects that meet our requirements and pass the laboratory's review will sign a委托研发agreement with the project team.

We will allocate corresponding research funds and equipment based on the project plan and regularly review and supervise the use of funds and project progress. Finally, we will timely apply for overseas patents based on the research results!

This委托研发model is similar to the sample processing popular on the mainland. The only difference is that the raw material we invest is intellect, and the product we produce is technical patents!"

"What is the scale of the first phase of cooperation?" Han Peng asked.

"The scale can be large or small, and we can discuss it based on the actual situation. For the first batch of partner institutions, I am considering Tsinghua University, Rongcheng Telecommunications Engineering Institute, Shanghai Jiaotong University, and Yat-sen University in Guangzhou, as well as the Chinese Academy of Sciences in Beijing! I have had brief exchanges with the presidents of Rongcheng Telecommunications Engineering Institute and Shanghai Jiaotong University at a reception hosted by the Chinese University of Hong Kong, and they are very supportive of this model! We still need to communicate with the other two universities and the Chinese Academy of Sciences."

Li Xuan knew that everyone still had significant doubts and did not want to rush into it. He continued, "This is just an idea. To truly implement it, we need to first communicate with the Chinese University of Hong Kong and the University of Hong Kong and obtain their approval. After that, we can communicate with the mainland side under the name of the two laboratories, seeking approval from the central government and relevant ministries. So, this will be a long and complex process.

I also know that we need to take one step at a time and eat one bite at a time. But some preparatory work needs to be done in advance. Some within the company believe that we are taking too big a step, but I don't think so. Oriental Electronics is determined to be a research and development company, not a manufacturing company.

R&D requires foresight. By the time everyone can clearly see the promising application prospects of a technology, the industry giants will have already set up a dense network of technical barriers. If we wait until then to enter the market, we will only be able to be a low-end assembly factory!"