After more than a year's preparation and an investment of more than RMB100 million Tencent recently inaugurated the Tencent Research Institute. Tencent has appointed Chief Architect Dr. Zheng Quanzhan to head the institute. As the developing platform for Tencent's core technologies the Tencent Research Institute will focus on developing a sound technological foundation for the next two to five years in order to fully take advantage of future innovations. The institute will work closely with China's top research organizations to nurture Chinese talents in the high technology industry.

Striking at the core: Six basic development areas

To ensure development and innovation leading international Internet brands such as Microsoft Google and leading national IT enterprises such as Lenovo often set up research institutes to maintain competitiveness. Tencent Research Institute is China's first Internet enterprise-funded research institute.

Tencent Research Institute has set up campuses in Beijing Shanghai and Shenzhen. At present the institute has set up six laboratories to develop the following areas: storage technology data analysis multimedia Chinese language processing distributed networks and wireless technology. By next year the institute hopes to have a staff in the number of tens. Each laboratory will select two to four topics for research. The data analysis laboratory for example will work on user classification which helps Tencent develop personalized services. The institute will work in joint laboratories with top national research organizations such as the Institute of Computing Technology at the Chinese Academy of Sciences Harbin Institute of Technology and Zhe Jiang University.

Head of Tencent Research Institute Zheng Quanzhan recommends that the research institute create an information sharing platform by strengthening communication between Tencent's and other development teams. Tencent Research Institute will ensure the smooth interaction among technicians researchers and product specialists internally. The institute will also set up regular interactive sessions externally with other enterprise research institutes and national research organizations where teams can worker together to raise the overall standard of Chinese Internet R&D and applications.

On the question of applying core technology to Tencent products Zheng Quanzhan reveals that Tencent has already built an express channel for application development. Tencent Inc. is governed by a pyramid structure that is divided into three levels: research institute innovation center and business units. The three research branches ensure that Chinese Internet users can always count on being served by the latest technology.

Tencent Co-Chief Technology Officer Xiong Minghua explains that most of China's Internet research was concentrated on developing applications. Chinese Internet enterprises often do not have a firm grasp on core technology. In the face of competition from abroad therefore Chinese enterprises often only get to play a following role. Tencent Research Institute will concentrate on strengthening base technology and rely on its own innovations to develop its core technology. The institute will also shorten the time it takes for new technology to reach regular users and let end users to experience the new technology earlyer.

Xiong Minghua reveals that Tencent Research Institute's next mission is to attract highly skilled technicians and strengthen the sharing of technology. The institute will set up an effective program to nurture new and existing talents and explore programs for Tencent Research Institute to work with other research organizations. The institute's technical knowledge and Tencent's large user base will help research teams find ways to turn theoretical knowledge into practical applications. The combination of product development human resource training and research will help promote innovations in China's Internet sector.

Driver of technology: Improving Internet enterprises' ability to innovate

Tencent has chosen a critical time to announce the inauguration of Tencent Research Institute. In the process of innovation there are two models: "climbing the north hill" and "climbing the south hill." Climbing the north hill means that an enterprise positions itself as an innovative technological force with an emphasis on research in the very beginning. This model is more straightforward but also riskier. Climbing the south hill means that an enterprise initially concentrates on production and application of products. Once the enterprise accumulates enough technology and earnings it repositions itself to an innovation-based enterprise. Climbing the south hill is slower but safer.

In the Internet business Chinese enterprises are often seen as copiers of American Internet technologies. Indeed one can pretty much see in Chinese Internet enterprises the modes of operation found in American-based companies. This is because China's Internet enterprises are still fairly young. Efforts to innovate are still only loosely organized. There exists no systematic ways to invest in innovations. International Internet enterprises such Microsoft and Google are able to succeed by through operating their own research institutes continuously sponsoring research and development and the training of human resources. This practice ensures that the brands will always remain innovative and contribute to long term local development.

"This mode of thinking is one of the drivers for us to push for setting up the Tencent Research Institute" says Mr. Xiong. "In terms of building up research we are the first Internet enterprise in China to do so. We hope to develop the most basic and practical Internet technologies to set the standard for and raise the competitiveness of core technologies used by Chinese enterprises. Through the development of the six core technologies we will bring more advanced and high quality services to China's users. In its eight-year history Tencent has already amassed a certain amount of human and material resources. The resources we have now allow us to invest more in improving the industry. Through our own efforts we hope to raise the industry's overall ability to innovate and produce a highly skilled talent pool. In the future Tencent Research Institute will make a long term commitment to pursue these aims. I also believe that our investment in technology will bring more innovations into the industry."

Nurturing top talents Building innovative culture

As the CEO of the first Chinese Internet enterprise to set up a research institute Mr. Ma Huateng vows that Tencent will build first class teams first class innovative environment and first class services. The realization of these "first class" goals must depend on attracting and nurturing talented staff.

"The research institute focuses on two groups of people. Well-known and influential experts in the field and graduates of top universities who show the potential to excel in research." As for attracting talented staff Mr. Zheng Zhanquan feels the pressure. "We will provide a liberal and relaxed working environment great opportunities for career development and salaries and benefits competitive to those offered by any top rate Internet enterprise. We are very confident about this." Presently the number of research personnel in Tencent makes up more than half of the enterprise's total staff. Tencent enjoys a solid human resource foundation and has accumulated a lot of experience in human resource assessment and management. Mr. Zheng thinks that this will give the institute a good starting point.

For those who would like to work for Tencent Mr. Zheng has listed four traits that Tencent is looking for. Prospective staff must be intelligent and have a high EQ self-motivated when it comes to finishing a project passionate about technology and good at innovation and ability to work in teams. To attract top talents CEO Ma Huateng has personally drafted a guideline for the culture of Tencent Research Institute: CPEI. The acronym stands for cooperation (among Tencent Research Institute and top universities) practicality (that emphasizes base technology) exploring (with the spirit of learning and research) and innovation (of technology and product application). Mr. Ma expects the institute to become one of the world's foremost Internet technology research institutes in a few years.