In recent weeks, the Trump administration has been focused on domestically made products, as is evident in the “Made in America” campaign. But, meanwhile, many people in the tech industry remain actively focused on the booming business scene in Mainland China and Hong Kong – the booming tech business, that is.
It seems that when it comes to future-proofing companies using technology, this area of the world is creating a hub that some predict will cause a gradual shift from Silicon Valley and in a powerful manner. The rumors of this major shift come in part from innovations being driven from Asia that could soon move on to impact the entire world. Consumer attitudes and the surrounding business factors create a harbor for growing companies – and those such as Alibaba and WeChat are just the beginning.
What has led up to this point?
In 2010, China’s Internet economy stood at 3.3 percent of its GDP. Then, by 2013, the GDP had reached 4.4 percent shifting the country into the ranks of the global leaders. Thanks to the growing Internet economy, the country could see 7 to 22 percent of the total increase in their GDP from 2013 to 2025, according to the consulting firm McKinsey.
Overall, the country’s charming collaboration, development, and innovation stem from the population’s beliefs, passions, and attitudes around technology. Now, China has moved from being known for their inexpensive production and labor to a true leader in the area of innovation.
Where are we headed?
In the past, major Chinese companies have slightly altered the business model from Western start-ups and went on to dominate the market. However, recent start-ups are not following in their forefather’s steps…
The most recent wave of fast-growing tech companies in China has begun experimenting with a new business model – one that has no analog in the Western society.
Chinese authorities have begun to show an overwhelming – and surprising – tolerance for business model innovation. Their open-mindedness is allowing young companies to grow free of regulatory pushback, as opposed to in other countries.
For example, consider China’s booming bike sharing industry with companies like Mobike. Bike sharing is not a new idea – similar systems are being installed all around New York and several other major states. However, China has given the idea a new direction…
Users of the Chinese bike sharing system use apps on GPS-capable phones which enables them to find the nearest GPS-enabled bike regardless of where they might be parked around the city – not just at bike sharing kiosks like DecoBike in California.
According to Mark Varnas, the founder of a SQL service business called Red 9 Consulting, “As China starts to copy less and innovate more, it is necessary that they continue to adapt the technologies that they build their business on alongside the business models themselves. If they do this, I see a bright future for programmers, Database Administrators (DBAs), and co-founders throughout the country.”
The Speed Addicts
In addition to the new tolerance for business model innovation, China is also known for its rapid pace of innovation and relentless spirit of experimentation. Their thirst for freshness and unconventionality has turned China into the biggest competitor for the U.S. tech hub, Silicon Valley.
Their addiction to speed has also led them to develop a “9-9-6” work schedule – meaning staff works 12 hours a day, six days a week.
According to Business Insider, China is now the leading country for consumer adoption of fintech services and products. They remain the largest smartphone market in the world and account for a third of the global virtual reality headset sales in 2017 alone.
The numbers don’t lie –
But, in the country’s fast evolving startup scene and investing ecosystem, trends and big hits emerge on a weekly basis, keeping the competition fierce. Future tech startups should keep a keen look on China as local entrepreneurs are developing new ideas daily that will not only serve China’s 1.4 billion people but the rest of the world as well.
The Chinese government’s overall lax in regulations regarding business model innovations leaves a major opportunity open for the future of tech startups in China. Startup owners will have the ability and the freedom to transform their ideas and take their businesses is various alternate routes, which might not have been an option previously.
Overall, China appears to be a solid location for tech startups in the upcoming future, but it needs an open internet to flourish. That is a topic for another article, but in spite of the innovations now occurring on the ground in China, the fact that China’s internet is essentially a “walled garden” makes innovation difficult for local and foreign entrepreneurs alike.
Michael Michelini is host of the GlobalFromAsia.com podcast, an online radio show to help business owners grow their companies in Asia and around the world.
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