A New Kind of Outsourcing Model from China

I'm on a short visit to China, and spending as much time as I can visiting with companies in the field of high tech -- firms either creating it or providing services. In meetings with people in Beijing, I heard about an approach to setting up ventures in China that was new to me.

We were meeting with Savio Tang, the operations director for Facio Software. Facio develops software for the explosive China mobile market. Currently, the software allows users of certain devices to access their email. It's a start-up venture that was started by two people who worked at Intel, as did Tang.

Tang said one of the biggest challenges for any new business in China is finding qualified people. The schools may be graduating hundreds of thousands of students, but that doesn't easily translate to a workforce that can be quickly deployed on projects.

In the nine months he has been with the company, the group has grown from about eight to about 15 -- five of those engineers, and the remainder in sales, marketing and administrative roles. Most of the hires have come through referrals, not job sites or classified ads. The job sites will generate a stack of resumes, but, as Tang said, "The candidates are not that great." (That explains why at every business I've visited, I see many cubicles that are empty. Every company is waiting to find the right people to fill them.)

So, what's a business person to do if he or she expects to set up operations in China -- especially if the talent you need is in a specialized field, such as technology?

One suggestion Tang had was to make contacts within the major universities. For Beijing that consists of three schools: Beijing University, Tsinghua University and the lesser known Postal and Telecommunications University. In particular, he suggested making connections with professors, who are allowed to have ventures outside of their teaching and research duties.

The idea is that you set up a joint venture with a given professor, who can supply students to do the work as part of their studies; you supply the business opportunity. If the students "really think the model is going somewhere, they will stay," said Tang.

Granted, this is a slow-growth way to go -- hardly scalable. But anybody who ventures into China for business should plan on doing it for the long-term advantages.