By Suwatchai Songwanich
Chief executive Officer,
Bangkok Bank (China)
As a result, some of the world’s most active investors are increasingly looking east.
Many believe Beijing is the only location capable of challenging Silicon Valley for the coveted global innovation crown over the next decade. Furthermore, Chinese start-ups typically grow faster than those from the Valley, while perceptions that Chinese tech companies copy their western counterparts have long gone.
While much of this activity takes place far from western eyes, China is also making substantial efforts to plant its flag on the global technology map.
China was the largest exhibitor after the US at CES 2017, the largest annual consumer electronics event which is held in Las Vegas.
Of course, the breakneck pace of development hasn’t happened by chance. State venture capital funds are providing local funding pipelines. Other government initiatives focus on catalysing local talent and building innovation infrastructure – Beijing has opened more than 1,600 high-tech incubators for startups since 2014.
China also plans to become an advanced manufacturing power. Homegrown technology leaders and start-ups are critical in stimulating the mass entrepreneurship and innovation needed to achieve this goal. This strategy seems to be getting results given the dynamic startup scene in China, with many exciting initiatives in areas such as biotech, fintech, drones, do-it-yourself robot kits, and virtual reality.
However, the “build it and they will come” approach cannot solve all problems overnight. Time is needed to develop the knowledge and skills base China needs to pass the tipping point in terms of becoming a hi-tech manufacturer. Until then, outside expertise will remain an essential ingredient for creating quality technological development. In fact, the global tech and start-up scenes are renowned for their multicultural and multinational composition. After all, breakthrough ideas can come from anywhere.
This is one area where China could improve its game. The government’s push to become an advanced manufacturing power is concerning European businesses. The EU Chamber of Commerce in Beijing recently released a 70-page critique of the policy, saying that European businesses are being pressured to turn over advanced technology in exchange for near-term market access.
The idea of handing over intellectual property just to gain access to a given market or build an expert team within it creates more than just technical barriers – it also creates significant psychological ones. Many innovators and investors would likely have second thoughts over entering any market where they think they might have to hand over their IP crown jewels somewhere down the line.
Nevertheless, I am confident, given the general pragmatic nature of the government, that these issues can be resolved. The greatest prize, after all, will be enshrining China as the epicentre of global technology innovation. Collaboration will be the bedrock for achieving this.