By Egidio Zarrella
As tech innovations unfold, China is quickly becoming one of the world’s leading tech epicenters. A recent KPMG survey of tech business leaders highlighted the country’s huge potential in developing disruptive technology breakthroughs that can bring about global impacts.
China’s transformation from an investment-intensive, export-led model of growth to one driven by consumption and innovation has spurred the growth of new industries, new institutions and new opportunities, and in particular within the tech and innovation space.
This view was prevalent among the more than 800 global tech leaders who responded to our tech innovation survey. When asked which cities are expected to be the top innovation hubs (outside Silicon Valley/San Francisco) over the next four years, Shanghai, Beijing, and Shenzhen were all among the top picks of global tech leaders.
A key to the positivity surrounding China as a driver of global innovation is down to its corporate sector, and those leading it. Many of the country’s tech titans and entrepreneurial leaders, for example, are highly respected globally as leading visionaries. As part of the survey, Alibaba founder Jack Ma came in third in our ranking of the world’s top tech innovation visionaries, while Alibaba was seventh on the list of companies driving global tech innovation.
Many Chinese companies such as Alibaba are following the lead of their CEOs in this rapidly evolving age of digitalization. Through the use of disruptive technologies such as cloud computing, the Internet of Things, smart industrial robotics, and enhanced automation, they are able to capture new business opportunities.
China is also a leader in fintech, where non-traditional financial institutions use technology and innovation to provide better financial services and risk management. The top fintech companies in China are proactively exploring and adopting advanced IT technologies (such as big data, risk modelling, cloud computing, and blockchain) to increase efficiency in financial services through disruptive innovation. They are relying on technology-driven solutions to develop major breakthroughs that can help solve some of the biggest issues facing the financial services sector.
These innovative companies are a key driving force behind China’s reform in the financial sector. In the consumer space, China is already ahead of the United States and United Kingdom in areas such as mobile commerce, which has grown exponentially in the past few years. Some 90.4 percent of Chinese consumers were found to have made one online purchase via their smartphones in the past 12 months, higher than the 74.7 percent of UK consumers and 74 percent of US consumers, according to a separate survey conducted by KPMG.
In terms of challenges, we believe technology complexity, funding, and risk management will continue to be top barriers for commercializing technology innovation. Access to capital remains one of the main constraints for companies seeking to innovate, while platform consolidation is most frequently identified by global tech leaders as a limitation.
However, China is likely to continue making rapid gains as the country moves from manufacturing to innovation led by its large base of mobile and digitally advanced consumers and enterprise foundation.
Chinese companies will continue to focus on growth, strengthening their capabilities, and readying their businesses for a very different future by means of transformation, advanced technology, and more specialized talent. A new ecology is taking shape and China will play an important role in driving disruptive technology breakthroughs.
To read the full report, “The Changing Landscape of Disruptive Technologies,” go to www.kpmg.com/cn
Egidio Zarella is the Head of Clients & Innovation at KPMG China