Public-private alliance looks to a greener future

By Du Li (China Daily)
Updated: 2009-09-10 08:50

In little over a decade, Dalian's Software Park has delivered tremendous returns for the city and provided the spur for the radical reinvention of its economic landscape.

Sun Yinhuan is the chairman of Dalian Software Park Co Ltd (DLSP), the company that developed and manages the park. Sun started his own construction business, the Yida group, in 1984. Nowadays "Yida" is a very well known brand among China's real estate community. Much of its success has been attributed to the insight and hard work provided by Sun.

In 1997, the local government of Dalian advocated the development of a software park with a focus on the information industry. It was at this point that Sun stepped in and offered his services as the ideal conduit for making this dream a reality. Under his careful stewardship this innovative 'Government-assisted, private-managed" entity swiftly became a success.

Early in 1998, the Yida Group established the Dalian Software Park Development Co Ltd, a sister company that took responsibility for the infrastructure construction, environmental planning, trade and investment promotion, industry services, and general management of the project. The local government provided Yida with substantial support as it navigated its way through the knotty issues of policy development, legal guidance, funding and investments and systems implementation.

Today the Dalian Software Park is a multi-national, highly competitive state-level software park. It is home to some 470 IT firms, 43 percent of which are foreign-backed companies and 7.4 percent of which are among the world's top 500 businesses.

Driven by developments at the Dalian Software Park, the average annual growth rate of the city's software industry is now 68.2 percent. Its outsourcing-related software industry is now ranked as number one in China and top five globally. Considering the site's relative youth, these statistics are little short of miraculous.

So struck was Premier Wen Jiabao by its achievements that he commended it as likely to be "No 1 in China and in the world in the future."

It's pioneering public and private sector co-operation model is now seen as a blueprint for other such alliances. In a classic "win-win" scenario, the government gained considerable development capital and management experience from Yida, whilst Yida, in turn, benefited hugely from the flexible marketing mechanism and strong customer service base provided by the government. The combination of the two proved an irresistible competitive advantage for the park.

This remarkable innovation underlined the fact that, for a city to fulfill it full development potential, it needs people with vision, courage and determination. Sun hopes that the Yida Group can continue to make a long-term contribution to the city and also achieve its own smooth transition from being a purely real estate business to becoming a major information technology player, through its development of the Dalian Software Park.

Back in 1998, when work began on the first phase of the Dalian Software Park, the Yida Group approached Neusoft, the largest offshore software outsourcing service provider in China, with a view to forming a strategic partnership. In 2003, the Ascendas Group of Singapore and the Shui-On Group of Hong Kong were invited as partners in phase II of the development. Their participation led to the construction of the Dalian Ascendas IT Park, the Dalian Tiandi Software Hub and the Neusoft international software park. Yida itself supported the development of the 7.6 million sq m Dalian Service Outsourcing Base.

In order to make full use of its advanced management skills and its wealth of practical experience, DLSP has advanced the idea of "China service" and signed an agreement with the relevant local governments to operate the Wuhan Optical Valley Software Park, the Suzhou Software Technology Park and the Tianjin Binhai Service Outsourcing Industry Park.

In addition to its investment in the construction of the software park, Yida also supports several IT educational training and IT consulting initiatives. In June 2000, Yida, together with Neusoft, jointly invested in the launch of the Neusoft Information College, China's first dedicated IT training school. It now has 25 thousand students studying at one of the three campuses - Dalian, Changde or Hainan. The college is now China's largest software-oriented educational base.

In 2006, the Group launched the Yida Information Technology Co Ltd (YIDATEC), a company dedicated to providing total solutions for application software development, embedded software development, Business Process Outsourcing (BPO) and IT infrastructure outsourcing. In less than two years, YIDATEC has become one of the top five businesses in Dalian's software outsourcing industry, employing some 1,200 staff. In January 2009, YIDATEC acquired two Japanese outsourcing companies.

This year the international financial market underwent a period of unrest, creating formidable challenges to the world's economy and its environmental protection agencies. It is timely then that, this summer, the Davos Forum will return to Dalian with "green development" at the top of its agenda.

Dalian's Yida Group will continue to cooperate with the government's strategic planning representatives in the development of the city's service outsourcing industry, encourage more and more cities to become more environmentally responsible, whilst, at the same time, making China truly the 'world's office'.