From Lab to Market: How the 'XiGuang Model' Achieved Breakthroughs from 0 to 1 and Spawned Over 400 Startups

Xi’an bears many unique labels: ancient capital of six dynasties, world-renowned city, major hub for science and education, and capital of “hard tech.” From the Giant Wild Goose Pagoda to the High-Tech Zone, you can witness the city’s development, transformation, and rebirth as it evolves from a historic cultural center into an innovation powerhouse.

With 63 regular higher education institutions and more than 3,000 research organizations, Xi’an ranks among the leading cities in China in terms of scientific and technological strength and R&D capabilities. For many years, the Xi’an High-Tech Industries Development Zone has leveraged the ancient city’s robust scientific research resources to continuously drive reform and innovation, facilitating the translation of research achievements from the laboratory to the market. In this context, special mention must be made of the Xi’an Institute of Optics and Precision Mechanics, Chinese Academy of Sciences (hereinafter referred to as"Xi'an Institute of Optics and Precision Mechanics") and its innovative development strategies—"Xiguang Model"。

One of the founders of China's optical industry in 1962Gong ZutongHe led a group of key scientific and technical personnel from the Changchun Institute of Optics, Fine Mechanics and Physics to Xi’an, where they participated in the establishment of the Xi’an Institute of Optics and Precision Mechanics of the Chinese Academy of Sciences. After decades of arduous pioneering efforts, the Xi’an Institute has advanced to the international forefront in the field of high-speed photography research.

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Aiming at the global frontier, the Xi’an Institute of Optics and Precision Mechanics (XIOPM) has twice received the Photo-Sonics Award from the International Congress on High-Speed Photography and Photonics, which is regarded as the highest honor in the field of high-speed imaging.

▲ Photo-Sonics Award

Addressing major national needs, the Xi’an Institute of Optics and Precision Mechanics (XIOPM) successfully developed China’s first radiation-resistant optical glass, first optical fiber, first fiberoptic gastroscope, and first self-focusing microlens. From the “Two Bombs, One Satellite” program to the Chang’e lunar missions, XIOPM has made outstanding contributions to national defense security and scientific and technological progress, playing a visible role in major breakthroughs and key projects in China’s scientific endeavors.

Serving the main arena of the national economy, the Xi’an Institute of Optics and Precision Mechanics (XIOPM) continues to play a vital role. By promoting the integration of science and technology with the market, XIOPM closely aligns its research missions with market demands, incubating and operating a large number of highly innovative, hard-tech enterprises that address core market needs.

As of January 2023, leveraging the “Xiguang Model,” the industrial units of the Xi’an Institute of Optics and Precision Mechanics have cumulatively incubated and nurtured416homegrown “hard-tech” enterprises, initially forming three industrial clusters in photonic manufacturing, photonic information, and biophotonics, leaving a significant mark on Xi’an’s technological innovation and commercialization.

It is precisely because the “Xiguang Model” took the lead in breaking through traditional hospital management concepts and created a“Institutional Reform + Sci-Tech Finance + Sci-Tech Platforms + Sci-Tech Spaces + Sci-Tech Think Tanks”an integrated “hard tech” innovation and entrepreneurship ecosystem akin to a rainforest. This will enable the Xi’an Institute of Optics and Precision Mechanics to continue writing its legend in the era of technological innovation.

In the traditional model of technology transfer, the typical approach is to first develop research outcomes and then seek applications. The inherent mission of research institutes predisposes them to prioritize scientific research while overlooking commercialization. This has led to a disconnect between academia and industry, where even heavily funded research projects may ultimately address only niche market applications.

To address this persistent challenge, the Xi’an Institute of Optics and Precision Mechanics proposed in 2006“Dismantle the Walls, Open Up the Institute”philosophy. On one hand, it encourages the global outreach of achievements; on the other, it attracts more talented individuals to join.

“Going Global”, not only involves the opening up of high-quality scientific and technological resources such as research achievements, instruments and equipment, and experimental environments, but also entails the full release of research outcomes. It encourages research achievements to “go global,” effectively integrating technical results that might otherwise remain shelved within “ivory towers” with the market. And"Come in", it is to introduce excellent resources from outside the “walls,” bring enterprises into the research institute, and leverage its strengths by relying on the platform of Xi’an Institute of Optics and Precision Mechanics.

“The research institute can no longer indulge in self-admiration.” This is the core tenet of the open-institute strategy proposed by the Xi’an Institute of Optics and Precision Mechanics (XIOPM). Upon completion of research task acceptance, a substantial body of scientific and technological achievements accumulates within research institutes. Rather than letting these achievements remain shelved and unused within the institute, it is preferable to promote their external transfer and commercialization in the market, thereby driving innovation.

Moreover, in the process of transforming research outcomes into enterprises, "de-administratization" also plays an important role. The Xi’an Institute of Optics and Precision Mechanics has always adhered to"The institute holds minority equity stakes without controlling interests, and incubates enterprises without directly operating them."the incubation philosophy of unleashing maximum vitality by encouraging enterprises to develop mixed-ownership structures.

Breaking through traditional hospital management concepts was merely the first step taken by the Xi’an Institute of Optics and Precision Mechanics (XIOPM). The introduction of this new philosophy provided a forward-looking direction for the institute’s innovation and commercialization efforts, while the development of its technology transfer system represents its proactive and concrete exploration in this domain.

Originating from the Xi’an Institute of Optics and Precision Mechanics of the Chinese Academy of Sciences, Xi’an Zhongke Guangji Investment Holding Co., Ltd. (hereinafter referred to as “Xi'an Jiaotong University Holdings”) has remained dedicated to the commercialization of hard-tech innovations, engaging in operational management of income-generating assets and investment incubation for high-tech enterprises, while also being recognized as a pioneer in the external translation of scientific research achievements and market expansion.

This is mainly because Xike Holdings has built “"Sci-Tech Finance + Sci-Tech Platform + Sci-Tech Services + Sci-Tech Space + Sci-Tech Think Tank"a technology transfer and commercialization system that tightly integrates suitable leading talents, mature innovative technologies, specialized early-stage capital, and tailored sci-tech innovation services.

▲ The image shows the technology transfer system of "Xi'an Science & Technology Holdings"

In a context where social capital was hesitant and unwilling to invest in the early-stage transformation of scientific and technological achievements, resulting in a severe gap in the “first mile” of industrializing such achievements, Xi’an Hi-Tech Holdings joined forces with the industrialization team of the Xi’an Institute of Optics and Precision Mechanics of the Chinese Academy of Sciences in January 2013 to establish China’s first investment and incubation platform dedicated to “hard technology”—Xi’an Zhongke Chuangxing Technology Incubator Co., Ltd. (hereinafter referred to as“Zhongke Star”). Currently, CAS Star manages several operational funds, including the Xike Angel Fund, the Qinchuangyuan Hard Technology Fund, the Shaanxi Optoelectronic Integration Fund, and the Beijing Hard Technology Venture Capital Fund, with a total cumulative scale ofRMB 7.4 billion。

Unlike the VC and PE firms that were still focused on mid-to-late-stage investments at that time, the fund teamIntervene in the incubation process at the early stage of project development, providing the initial round of funding for researchers to establish enterprises, effectively addressing the financial challenges associated with the commercialization of high-tech achievements. Meanwhile, the fund’s team also offers a suite of services to its portfolio companies, including standardized corporate governance and resource matchmaking, thereby providing comprehensive support to facilitate the rapid and healthy growth of high-tech enterprises.

As of the end of January 2023, CAS Star has invested in and incubated 398 homegrown hard-tech enterprises, cultivating champion companies in the hard-tech sector such as Yuanjie Technology, ZK Micro, Feitian Cloud, TankeBlue, Lightelligence, Bodong Medical, and ZK Precision.

In the early stages, startups often face significant resource constraints, which substantially impact their subsequent research and development as well as overall growth. Taking production and inspection equipment as an example, acquiring such equipment requires substantial capital investment, while setting up production lines is highly time-consuming.

To shorten the startup cycle for enterprises, Xi'an Hi-Tech Holdings began investing in and constructing public technology platforms required for the growth of hard-tech companies in 2015—Shaanxi Institute of Optoelectronics Pioneer Technology Co., Ltd. (hereinafter referred to as"VBInsight"). It is reported that the Pilot Institute has introduced over 500 units (sets) of key equipment for compound chip manufacturing, a complete process technology team, and cleanroom facilities classified at ISO Class 5 (Class 100), ISO Class 6 (Class 1,000), ISO Class 7 (Class 10,000), and ISO Class 8 (Class 100,000). A shared production line has been established, enabling companies to achieve delivery speeds that surpass those of their industry peers.

In addition, the Advanced Technology Institute places great emphasis on technological innovation. To this end, it has established an Innovative Platform for Advanced Photonic Devices Engineering. This platform features a flexible pilot-scale production line centered on 6-inch compound semiconductor chip processing capabilities, with GaAs and GaN as its primary material systems. It provides comprehensive technical services—including product R&D, pilot-scale manufacturing, and testing—for incubation projects in the photonic industry. By doing so, it effectively bridges the gap between laboratory-based innovations that lack engineering scalability and mature foundries that are ill-suited for low-volume production of innovative products, thereby resolving the dilemma faced by many emerging technologies.

Since 2016, Xike Holdings has been building“Curvature Engine”Hard-Tech Enterprise Community. To date, a total of three "Curvature Engine" hard-tech enterprise communities have been put into operation.

Here, the hard-tech enterprise community primarily provides companies with physical space and infrastructure—including facilities for testing, production workshops, offices, and R&D—to help entrepreneurs reduce startup costs.

Furthermore, it provides enterprises with comprehensive services—including strategic consulting, tech-finance, policy advisory, brand marketing, industrial integration, organization & talent development, and entrepreneurship training—thereby eliminating unnecessary concerns and enabling healthy, rapid growth.

In response, Xingchuang Kefu was officially established in 2020. It has since built a professional service team of over 60 members, providing entrepreneurs with startup services that include equity financing and investment, corporate culture development, and talent pipeline construction.

From “Ancient Capital of Thirteen Dynasties” to “Capital of Hard Tech,” Xi’an Has Forged a New City Brand.

Since 2017, Xi’an has hosted the annual Global Hard Technology Innovation Conference, boldly championing its identity as the “Global Capital of Hard Technology” and becoming the first region in China to adopt the “hard technology” concept as a core driver of urban development. Meanwhile, the city continues to deepen its expertise in hard technology by leveraging its own resources, fostering mutual benefits in the process.

▲ Photo of the Hard Technology Innovation Conference

In terms of the policy environment, on November 4, 2017, the General Office of the Xi’an Municipal People’s Government officially released the “Ten Measures for Xi’an to Develop Its Hard Technology Industry.” One of these measures states: “Strengthen investment promotion for the ‘Eight Route Armies’ of hard technology industries.” The term “Eight Route Armies” refers to eight key hard technology sectors: aerospace, optoelectronic chips, information technology, artificial intelligence, new materials, new energy, intelligent manufacturing, and biomedicine. Investment promotion alone was not deemed sufficient; Xi’an also aimed to retain control over core technologies. Therefore, another measure was included: “Promote the independent ownership of intellectual property rights for key core technologies in the hard technology industry.”

Furthermore, Xi’an has even established a dedicated government agency named the “Xi’an Hard Tech Industry Development Service Center” to specifically support the development of hard tech.

In the fertile ground of scientific research, Xi’an is home to more than one-third of China’s research institutions, specialized talent, and production capacity in the aerospace and defense industries. It is the only region in China with complete industrial chains for both aviation and satellites. In addition to leveraging its profound technological accumulation, Xi’an High-Tech Industries Development Zone saw its R&D expenditure as a share of GDP rise to an estimated 7.5% in 2022, achieving 158 breakthroughs in key core technologies and original innovations, with 41,909 valid invention patents held.

A favorable environment alone is insufficient; talent is the key factor influencing a city’s competitiveness. To foster the innovation and commercialization of “hard tech,” in 2020,Xi’an Zhongke Hard Tech Innovation Research InstituteOfficially established to support academic research on the theoretical framework, catalog, and standards of hard technology, as well as to provide planning recommendations and facilitate experience exchange for the development of hard technology in high-tech zones.

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Nowadays, "hard technology" has become part of the national discourse and one of China's key policy priorities. Xi'an has precisely seized this historic opportunity, achieving rapid advancement in the field of hard technology. In 2022, Xi'an's total industrial output value surpassed the RMB 1 trillion mark, with six major hard-technology pillar industries—electronic information, automobiles, new materials and new energy, high-end equipment, aerospace, food, and biomedicine—collectively exceeding RMB 850 billion in scale.

Through this series of efforts and explorations, the Xi’an Institute of Optics and Precision Mechanics (XIOPM) has established a comprehensive entrepreneurial ecosystem for “hard technology,” streamlining the entire process of transforming scientific and technological achievements from “0 to 1.” Indeed, from the successful experience of the “Xi’an Optics Model,” it is evident that the translation of scientific research outcomes can never be separated fromPeople, Technology, Capital, and Servicesof close linkage.

Mature innovative technologies are a prerequisite for successful commercialization. On one hand, they feature clearly defined application scenarios and promising market prospects; on the other, they address unmet needs with strong practical utility. Suitable leading scientific researchers continuously provide innovative resources and generate breakthrough technologies. Early-stage funding serves as the most critical safeguard for entrepreneurial success, accelerating subsequent R&D and organizational development in startups. Meanwhile, technology transfer services support the entire journey of innovative technologies from “0” to “1,” offering both hardware and software solutions to reduce risks and costs for entrepreneurs.----------------

In 2020, Xi’an Science & Technology Holdings Group initiated equity restructuring, successively introducing high-quality capital from institutions such as China Development Bank Capital (under the China Development Bank), Guokai Sci-Tech Innovation, ABC Capital, Shaanxi Financial Investment Group, and Xi’an Finance & Capital. Meanwhile, by focusing on local innovation resources, the group has continuously made breakthroughs in its endeavor to establish the “Nation’s First Hard Tech Innovation Demonstration Zone,” enabling the “Xiguang Model” of scientific and technological achievement commercialization to originate in Shaanxi and serve the entire nation.-----------------------------