The Shenzhen market symbolizes true innovation. From its designation as China’s first Special Economic Zone in 1980, it has miraculously developed from being a small fishing village of 30,000 people into the technology and manufacturing hub of the world; a roaring metropolis of 14 million people, each hoping to find the Chinese dream.
It is a city often referred to as China’s Silicon Valley, due to its innovative reputation, although there are differences between the two. Silicon Valley attracts software programmers and coders whereas Shenzhen attracts those who make hardware, tinker with devices, and innovate at the intersection of technology and objects. It is these ‘makers’, as these companies are now often referred to, and the culture of tinkering and experimenting with new products that makes Shenzhen truly unique.
With large amounts of investment, from China and abroad, and with Shenzhen’s market already well developed manufacturing, design, and engineering infrastructure in place, it has only been a matter of time before we would start seeing ‘makers’ create new products and technologies in the city. In 2014 alone, the city saw more than $9 billion spent on research and development to drive this innovative culture and now many of the blossoming tech companies in the Shenzhen market are becoming world leaders in their field – hoping to continue doing so by focusing on research and innovation.
For example, DJI is a well-established camera drone designer accommodating both consumer and professional use. Their focus on R&D and the progress of their technology has made them significantly stand out from their competitors. Huawei and ZTE are telecommunications, mobile device, and enterprise technology companies that are quickly gaining ground with well-established, international competitors, such as Apple and Cisco. Again, this quick growth comes from a heavy focus on R&D, with ZTE committing 10% of its annual revenue to R&D and Huawei having almost half of its 170,000 strong workforce working in R&D. You can be forgiven for thinking, “But why haven’t I heard of these companies?” and that’s because in many ways, they are still young and currently lesser known in the west. However, the chances are that you will soon.
And it is not only new ‘makers’ that are booming in the Shenzhen market, but also the development of an entire sector: the Internet of Things (IoT). Shenzhen is quickly becoming known as the home of IoT products, with virtually all the world’s IoT products being produced in Shenzhen. The IoT is the internetworking of physical devices, vehicles, buildings and other items embedded with electronics and network connectivity that enable these objects to collect and exchange data. It is this combination of products and electronics that makes Shenzhen, with its design, engineering, and technology prowess, the perfect place for these products to be developed. Dan Harris writes, ‘for most hardware and for virtually all IoT products, Shenzhen seems to have become just about the ONLY place for manufacturing in China, and, to a large extent, in the world.’ According to a Business Insider report, $6 trillion will be spent on IoT solutions over the next five years, which means there is likely to be no slowing down of the speed-train that is Shenzhen’s innovation.
For a more detailed explanation of some of the innovative companies and ‘makers’ in Shenzhen, see the CSOFT’s Shenzhen 100 China Globalization Maturity Index Report, which rates many of Shenzhen’s top companies on their readiness for going global.