Shen­zhen aims to be global tech­nol­ogy in­no­va­tion hub

City ramp­ing up ef­forts to at­tract high-level skilled pro­fes­sion­als

China Daily European Weekly - - Business - By CHENG YU and LU HAOTING in Shen­zhen Con­tact the writ­ers at chengyu@chi­nadaily.com.cn

It was the night of May 6, 1979, when a group of more than 200 young­sters from the vil­lage of Nan­ling made a des­per­ate dash across the Shen­zhen River with the hope of be­gin­ning a new life in Hong Kong.

More than 500 vil­lagers from Nan­ling left their homes for Hong Kong be­tween 1956 and 1979, due to poverty. With per capita an­nual in­come of less than 100 yuan, they risked their lives to cross the river to Hong Kong, where peo­ple at the time earned more than 10,000 yuan a year.

But four decades later, in­stead of flee­ing, peo­ple are flock­ing in. Nan­ling has been ur­ban­ized and has emerged as one of the coun­try’s most af­flu­ent vil­lages. The vil­lagers col­lec­tively own an in­dus­trial park, which houses more than 40 en­ter­prises, in ad­di­tion to nu­mer­ous of­fice build­ings, shop­ping cen­ters and ho­tels. Each vil­lager, as a share­holder, earns an an­nual bonus of more than 150,000 yuan ($23,520; 20,053 euros; £17,558).

Sim­i­lar sto­ries can be seen in other farm­ing and fish­ing vil­lages in Shen­zhen, which bor­ders Hong Kong to the south. Their rags-to-riches trans­for­ma­tion came after the Chi­nese main­land an­nounced its re­form and open­ing-up poli­cies in 1978 and des­ig­nated Shen­zhen as the first of its special eco­nomic zones, which have en­joyed more mar­ket-ori­ented and flex­i­ble eco­nomic poli­cies to at­tract for­eign in­vest­ment.

As a front-run­ner in re­form and open­ing-up, the city used to rely on pro­cess­ing trade mainly for Hong Kong. After en­joy­ing a high eco­nomic growth rate of nearly 40 per­cent per year from the 1980s to the early 1990s, the city, due to limited land re­sources and ris­ing la­bor costs, grad­u­ally turned its fo­cus to de­vel­op­ing high value-added in­dus­tries such as in­for­ma­tion tech­nol­ogy, biotech­nol­ogy, new ma­te­ri­als and high-end equip­ment man­u­fac­tur­ing. Now it has be­come a mag­net for tech­nol­ogy star­tups and the head­quar­ters of fa­mous high-tech com­pa­nies such as Huawei Tech­nolo­gies Co Ltd, Ten­cent Hold­ings Ltd and one of the world’s largest drone mak­ers, DJI.

But how will Shen­zhen con­tinue to be the front-run­ner in the com­ing decades?

“When other places are also com­pet­ing to be­come the front-run­ner, you must think out­side the box,” says Wang Weizhong, Party sec­re­tary of Shen­zhen.

“We should not just pin our eyes on the 1,997 square kilo­me­ters of Shen­zhen. We must look at Shen­zhen from a broader view,” Wang says.

The lo­cal gov­ern­ment aims to build Shen­zhen into a core en­gine, in terms of both tech­nol­ogy in­no­va­tion and fi­nan­cial sup­port, driv­ing de­vel­op­ment of the Guang­dong-Hong Kong-Ma­cao Greater Bay Area and, by 2035, into a global tech­nol­ogy in­no­va­tion hub.

The Bay Area is part of the cen­tral gov­ern­ment’s mega-plan for co­or­di­nated re­gional de­vel­op­ment, along with the Bei­jing-Tian­jin-He­bei area and the Yangtze Eco­nomic Belt. The Bay Area, con­sist­ing of 11 cities and re­gions with a com­bined pop­u­la­tion of 67 mil­lion, gen­er­ated GDP of more than $1.5 tril­lion last year, sur­pass­ing that of the San Fran­cisco Bay Area and over­tak­ing that of Rus­sia.

The am­bi­tion of Shen­zhen also epit­o­mizes the coun­try’s trans­for­ma­tion from be­ing eco­nom­i­cally un­der­de­vel­oped four decades ago into the world’s sec­ond-largest econ­omy through its open­ing-up.

In or­der to stand at the front line of the tech­nol­ogy hub, Shen­zhen has been ramp­ing up ef­forts to at­tract high-level skilled pro­fes­sion­als from home and abroad and pro­vide fi­nan­cial sup­port for tech star­tups.

The “Pea­cock Ini­tia­tive”, for ex­am­ple, is a pro­gram launched in 2011 to at­tract high-level pro­fes­sion­als to the city. Un­der this ini­tia­tive, a max­i­mum 100 mil­lion yuan will be pro­vided for each team aim­ing to make sci­en­tific break­throughs.

Ear­lier this year, Shen­zhen vowed to build 10 labs led by No­bel Prizewin­ning sci­en­tists to make break­throughs in in­dus­tries such as chem­istry, medicine, photo-elec­tric­ity, graphene, micro-nano, ro­bot­ics and 5G telecom­mu­ni­ca­tion. The city has al­ready at­tracted No­bel lau­re­ates in­clud­ing Robert H. Grubbs, Shuji Naka­mura and Barry Mar­shall.

“The spirit of in­no­va­tion is deeply rooted in Shen­zhen. It is a vi­brant city where a sin­gle idea can be quickly formed and where you can just con­cen­trate on tech­nol­ogy in­no­va­tion it­self with­out wor­ry­ing too much about other things,” says Shen Jianbo, co-founder and ex­ec­u­tive di­rec­tor of Smart Dy­nam­ics Co Ltd, a startup fo­cus­ing on de­sign­ing and de­vel­op­ing ser­vice ro­bots.

Shen founded the com­pany in Shen­zhen in 2015 with a few friends.

“Be­sides fi­nan­cial sup­port, the lo­cal gov­ern­ment of­fered us, in­clud­ing our fam­ily mem­bers, in­cen­tives rang­ing from hous­ing to med­i­cal care. What else should we worry about?” Shen adds.

In ad­di­tion to at­tract­ing skilled pro­fes­sion­als, the city also is in­vest­ing heav­ily in in­no­va­tion by pro­mot­ing an­gel in­vest­ments, where fi­nance is pro­vided by an af­flu­ent bene­fac­tor.

“An im­por­tant rea­son Sil­i­con Val­ley in the US and Is­rael be­came world in­no­va­tion hubs is that they gath­ered a lot of an­gel in­vest­ments. How­ever, Shen­zhen lacks an­gel in­vest­ments, even though there are nearly 50,000 ven­ture cap­i­tal and pri­vate eq­uity com­pa­nies and in­sti­tutes here,” says Wang, the city’s Party chief.

To this end, the city gov­ern­ment es­tab­lished a “fund of funds” ear­lier this year of 5 bil­lion yuan, fo­cus­ing on an­gel in­vest­ments. A fund of funds is an in­vest­ment strat­egy of hold­ing a port­fo­lio of other in­vest­ment funds rather than in­vest­ing di­rectly in in­di­vid­ual se­cu­ri­ties.

“It takes a lot of pa­tience and in­vest­ment for orig­i­nal in­no­va­tion. It is not some­thing for which you can see im­me­di­ate re­turn. But you need to have a long-term view and take the first step. The sooner the bet­ter,” says Wang, who served as vice-min­is­ter of sci­ence and tech­nol­ogy be­tween 2010 and 2014.

Af­flu­ent Nan­ling vil­lage is ea­ger to jump on the band­wagon of de­vel­op­ing high-tech in­dus­tries.

From its col­lec­tive in­come, the vil­lage set up a fund of funds of 500 mil­lion yuan at the be­gin­ning of May to in­vest in strate­gic and emerg­ing in­dus­try star­tups in ar­eas such as 5G telecom­mu­ni­ca­tion, chip de­sign and man­u­fac­tur­ing, ar­ti­fi­cial in­tel­li­gence and life sci­ence.

“We have been think­ing about what would be our next op­por­tu­nity for de­vel­op­ment, given limited land re­sources and ris­ing la­bor costs. When ev­ery­one is in a rush for bet­ter de­vel­op­ment, how I wish I could take off my shoes to run even faster,” says Zhang Yu­biao, Party sec­re­tary and a na­tive of Nan­ling vil­lage.

“By nur­tur­ing startup com­pa­nies, I hope that one day I can bring my fel­low vil­lagers to ring the open­ing bell at a stock ex­change,” Zhang says.

“When other places are also com­pet­ing to be­come the fron­trun­ner, you must think out­side the box.” WANG WEIZHONG Party sec­re­tary of Shen­zhen

XINHUA

An artist shows how to make a paint­ing us­ing virtual re­al­ity tech­nol­ogy at the Global In­no­va­tor Con­fer­ence in Shen­zhen in Septem­ber 2017.

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