China closes gap with US in hi-tech breakthroughs, KPMG finds
Shanghai ranks as the city to rival San Francisco as the world’s leading technology innovation hub
China is now closing the gap with the United States in leading the development of disruptive technology breakthroughs, according to a new survey by KPMG.
The consultancy’s latest annual global technology innovation survey, which polled 841 hi-tech industry executives around the world, also identified Shanghai as the city that will rival San Francisco, along with the rest of California’s Silicon Valley, as the world’s leading technology innovation hub over the next four years.
“The survey provides further evidence that the innovation economy in China is being energised by the technology disruptions that are occurring,” Tim Zanni, the global and US head of KPMG’s technology, media and telecommunications practice, said in an interview with the South China Morning Post. “What we’ve seen emerge over time is the result of countries and cities striving to replicate and build on Silicon Valley’s technology innovation blueprint, and their increasing degree of success.”
KPMG’s November poll showed a slight uptick for China – 25 per cent, compared with 23 per cent in 2016 – in the respondents’ perception of which country showed the most promise for disruptive technology breakthroughs with a global impact.
China’s 13th Five-Year Plan has identified innovation as one of the five new tenets of the country’s economic and social development.
A recent KPMG survey of China’s chief executives identified new product development, big data analysis capabilities, the Internet of Things, machine-to-machine communications and other internet-based technologies as the country’s top focus areas for further investment in the next three years.
While it continues to lead in the survey results, the US’s ranking has declined to 26 per cent from 29 per cent in the previous year.
Respondents also see India and Britain progressing to become leading global markets for disruptive technologies after China, with forecasts of 11 per cent and 10 per cent, respectively, according to KPMG.
“One can debate whether or not replicating Silicon Valley is possible, but the benefits of the effort are undeniable,” Zanni said.
In April last year, the State Council of the Chinese government approved a plan for Shanghai to promote comprehensive pilot programmes for innovation reform.
Shanghai, with a population of more than 24 million, is also home to about seven state-level development zones, like the Waigaoquiao Free Trade Zone, and 21 municipal-level development zones.
“The city is ranked first overall in the survey as a future technology leader with its strong regional leadership in financial markets and numerous hi-tech parks in Pudong,” said Egidio Zarrella, the head of clients and innovation at KPMG China. “Many venture capital and private equity firms head first to Shanghai because of the city’s very strong fintech start-up community.”
Zarrella said he expects Shenzhen to be ranked higher in future surveys as its top brands, such as Huawei Technologies and Tencent Holdings, raised global perception of the city.