Question

1. In your opinion, what are the pros and cons of the hardware capital of the world like Shenzhen when compared to Silicon Valley in the US?

Answer 1

Shenzhen becomes the popular choice for entrepreneurs.

In greater China, Shenzhen has overtaken Hong Kong and Taiwan as the most innovative cities, according to a survey conducted by the Chinese University, Hong Kong Baptist University, and some other Hong Kong universities. In the middle of 2016, 16 out of 100 adults in Shenzhen were entrepreneurs, two times more than 5% in 2009. The percentage of entrepreneurs in Israel and the United States was 11.3% and 12.6% respectively.

These French entrepreneurs all graduated from the engineering school in France but chose Shenzhen to start their hardware products. There are so many start-ups in Shenzhen like Japet, such as incubator HAX which as teams from more than 20 countries.

Shenzhen also attracts foreign companies

With the development of hardware, capital is also flowing into Shenzhen. After Shenzhen-Hong Kong stock connects opened, more global institutional capital flowed into Shenzhen. “Capital would be more interested in Shenzhen based on the mature ecosystem and hardware startups. And Shenzhen abuts Hong Kong, which is much easier to connect the world and make the foreign trade. ” Francis Ng, an intelligent wearable hardware investor, said in an interview.

Entrepreneurs and venture capital companies from the United States, France, and the Netherlands have already settled in the Nanshan Science and Technology Park west to the Huaqiang North and competed with each other to cultivate the second even the third enterprise like DJI.

Maybe the most appealing factor lies in the existence of an industry called “Plan Company.” Numerous factories that produce electronic parts and circuit boards are located in Shenzhen, and plan companies are well aware of the product information of almost every company, so they can provide assistance based on the needs of entrepreneurs. It is possible for entrepreneurs to launch the finished product to the market in a tight time based on just one idea, even though the entrepreneurs don’t own the factory, the design or R&D departments.

The rapid increase of start-ups is also due to the government’s support. Shenzhen government’s incentive policies for entrepreneurs are better than those of other cities in China, especially in regards to loans and taxes.

Why Shenzhen will be greater than Silicon Valley

To determine whether a district can become the new Silicon Valley, people look to three standards: Stanford (On Behalf of Technology), startup (Entrepreneurs), and Sandhillroad (Funds). Unfortunately, relying on these standards are limited. From the view of modern economic growth, a region’s prosperity is from the public’s participation in innovation. Hence, Shenzhen being another “Silicon Valley” depends highly on its ability to continue producing new knowledge, the resources and mechanism used in stimulating new knowledge production.

Culture factor

Shenzhen’s culture respects independent entrepreneurship and advocates personal efforts. In Shenzhen, people’s social status is determined by technological level and economic achievement instead of social relationships and family prestige. A young man in Beijing would fight for opportunities of entering central state-owned enterprises and a young man in Shanghai would fight for foreign-funded enterprises.

However, in Shenzhen, the youth look up to entrepreneurs who strive to innovate, take risks and obtain full returns. In Shenzhen, companies tend to encourage and tolerate employees’ inventions and entrepreneurship, even willing to invest in start-up companies established by employees. Such examples can easily be found in companies like Tencent and Huawei. It is this culture that provides Shenzhen with an ever-growing entrepreneurial soil that helps cultivate its innovative power.

Technical factor

From the perspective of technical factors, Shenzhen has a good circulatory system of technological innovation and transformation centers. It is reported that, in the past two years, 18109 Maker projects have successfully raised 274 million U.S. dollars on the crowd-funding site named Kickstarter, and 80% of the projects are carried out in factories in Shenzhen.

In 2013, Shenzhen became the world’s biggest consumer electronics manufacturing base. From a place of producing cheap articles to an optimal place of producing articles, Shenzhen is now the only place that makes innovations.

Currently, a large number of industrial elements, highly diversified and intertwined, are concentrated in Shenzhen, making it one of the largest high-tech industrial clusters in the world. Such cluster ecology, coupled with the spillover effect of human and knowledge capital, has formed a mature technology exchange network and diffusion mechanism in Shenzhen, creating a solid base for Shenzhen entrepreneurship.

Looking into the future, it is highly possible for Shenzhen to become greater than Silicon Valley under the condition that it overcomes the weaknesses of basic research and original innovation, and gives full play to its existing hardware and software advantages.