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Business + Tech

Made in China 2.0

A handful of “maker spaces” are bringing creative energy to the Chinese economy.

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Hop on the new high-speed rail line in Guangzhou, China, and within 45 minutes you’ll arrive at the outskirts of Shenzhen. The city, made famous by its booming manufacturing industry — the engine of Chinese economic growth over the past few decades — is a sprawling region of plain, gated factory buildings and high-rise towers. Visitors often liken its colorful night skyline to a futuristic film set.

But set foot in OCT LOFT, the city’s ultra-chic arts-and-design district, and you’ll get a taste of a new and different economy. The hiss of latte machines and live jazz are the soundtrack here. Boutiques featuring handmade items fill repurposed industrial buildings, alongside bars and restaurants. Murals brighten the exterior walls, and eye-catching sculptures line the brick sidewalks.

On the second floor of Building A5, a cheerful, glass storefront with lime-green walls displays books, toys and curious electronic gadgets. This is Chaihuo, Shenzhen’s first “maker space.” It’s a sort of community center where members get together not to play basketball but to build robots, learn programming skills and dream up do-it-yourself (DIY) technology projects.

Chaihuo is one of about a dozen such places in China. The first, XinCheJian, appeared in Shanghai in 2010, followed shortly by others in Beijing, Hangzhou and other cities around the country. Several more new spaces are opening this year. What makes Chaihuo special, though, is its connection to both the broader maker movement and an ongoing shift in global manufacturing.

A maker space in a manufacturing mecca

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The toys and DIY electronics kits in the window display at Chaihuo were made by members. They’re all for sale, attracting passersby to play with the fun, hands-on offerings and browse the publications. Behind the retail front lies a collaborative workspace, for which members pay at least 128 RMB (US$20) per month to access. Dominating the workspace is a large wood table, used as a work surface for anything ranging from soldering to programming to socializing. Classes and events are held here as well.

Most maker spaces around the world put an emphasis on access to shared equipment, such as wood and metal lathes, drills, saws, and milling machines. The total number of maker spaces around the world is small — estimated by many to be in the hundreds, not thousands — but growing rapidly, with dozens of new shops opening across the United States, Europe, the Middle East and Africa over the past year or two. In most of these places, the maker movement is framed as a way of giving everyone the tools to turn an idea into reality.

The TechShop, a San Mateo, California-based network of maker spaces in the United States, compares its business model to a gym or fitness club; but instead of treadmills and personal trainers, it offers its 5,000 members access to fabrication equipment (such as laser cutters) and trained staff, which it calls “dream coaches.”

In Shenzhen, things are different because Chaihuo doesn’t offer many tools. In part, that’s because of the site’s proximity to the global supply chain for parts and pieces. Instead of learning to use the equipment themselves, many Chaihuo members turn to the thousands of custom suppliers around the Shenzhen area, who can turn out custom laser-cut designs, circuit boards and milled metal screws far more quickly and cheaply than the DIYers could themselves.

Rather than focus on tools, Chaihuo focuses on building community and encouraging collaboration. “For me,” says Jasen Wang, a Chaihuo member, “it’s about the people — [having] a place to share, a place to talk.”

A new economic engine

Indeed, Shenzhen is the beating heart of the world’s electronics supply chain. The city’s exuberant, if gritty, feel is largely due to the millions of young people who have flocked here from small towns across China, in a gold rush of employment. The country’s cautious economic opening to the West in the late 1970s began here and it continues today. Everything from tiny electronic components to high-end consumer devices is made in thousands of factories throughout the city.

But there’s one piece of the puzzle that many in the industry say China is missing: insight into the design and creative process.

Zach Smith, a former co-founder of MakerBot Industries, serves as program director for HAXLR8R, a Shenzhen-based startup accelerator. He thinks that product innovation is the No. 1 differentiator for U.S. companies today. If China’s won the manufacturing game, it’s still lagging behind the West when it comes to original creativity.

The impact of this gap is far-reaching for China. The country earns less than 5 cents on every dollar spent on the global consumer electronics that are manufactured within its borders. The rest is divided up among other companies in the value chain — especially those that hold the intellectual property and brand power.

As China begins to lose its cost advantage over other countries, it can no longer count on manufacturing’s traditional low-margin, high-volume economics. Because of this, both regional and national government agencies have begun to invest in efforts to build homegrown Chinese businesses and products that keep more of the wealth inside the country.

One strategy that politicians are trying is investment in makers. In late 2011, Shanghai proposed to fund 100 maker spaces (dubbed “innovation houses”) throughout the city, six of which had opened by March 2013. The network of maker spaces will include the usual mix of manufacturing equipment, classes and membership activities. The goal: to cultivate a creative spark among China’s entrepreneurial class.

Making room for fun — and funding

While it may seem counterintuitive as an economic strategy, the main way that maker spaces are teaching creativity is by pushing participants to stop thinking about “making” as work.

“Most Chinese people, if they do something, are always thinking, How do I turn this into a product and make money? They are not thinking, I am just doing this for fun,” says Min Lin Hsieh, a globetrotting software engineer who was born in Taiwan and worked in California’s Silicon Valley for several years before starting the first Chinese maker space, XinCheJian.

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Many in the Chinese maker community say the reason for this is simple: mortgages. In China, the pressure to own a home is immense, particularly for young men. “They are always talking about how much pressure they have,” Hsieh continues. “If they don’t have a house, they can’t find a wife. It’s money and time. They can’t just enjoy making.”

That’s slowly changing. Minimum wages have increased steadily over the past several years, doubling in Shenzhen between 2009 and 2011. These changes, paired with greater scrutiny of labor practices, have slashed overtime hours. The average workweek, as a result, has shortened from six days to five.

With more free time and rising wages, notes Eric Pan, founder of Chaihuo, there’s a growing class of educated technology workers who are starting to discover making as a hobby. He and others say that developing a culture where making can be fun is a key piece of the creative process that leads to commercial innovation.

Take the examples of Jasen Wang and Terry Ouyang. Wang’s DIY robotics kit, Makeblock, started as a personal project. The set of durable, machined aluminum mix-and-match parts for constructing your own robots caught on with other users at Chaihuo, and Wang soon quit his day job to focus on developing the product full time.

His campaign on the online fundraising platform Kickstarter brought in $185,000 — more than six times its initial goal. Makeblock now supports four full-time employees and is nearing completion of its first venture investment round.

Terry Ouyang, a software developer and long-time Chaihuo member, started out working with others on projects they found on DIY websites, but when it came to generating new projects, he froze. “I wanted to work on my own thing, but I didn’t have any ideas,” he says.

Through the Chaihuo community, though, he met a designer with an idea. The two began talking, and today they’re working on a personal health-monitoring device for iPhone users.

That’s precisely the kind of thing Pan wants to see more of. After all, Chaihuo takes its name from a Chinese expression: Zhòngrén shi chái huyàn go, which translates as “the fire burns high when everybody adds wood to it.”

As the name suggests, Pan is hoping that, by joining forces, the small twigs of China’s emerging maker culture can stoke a creative fire.

Celeste LeCompte is a freelance writer based in San Francisco and Guangzhou who writes about innovation and the environment. Living up to a New Year’s resolution to “say yes,” she accepted a short-notice invitation to China at the end of 2011 and fell in love with the country’s dynamic, changing culture (and its food).

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