KPMG Survey: China to Become Global High-Tech Innovation Hub
The capacity to make ‘disruptive technological breakthroughs’ with global impact over the next 2-4 years will likely shift from the US to China, concludes a recent survey of business executives by KPMG US’s Technology, Media and Telecommunications practice. Between March and May, the Global Technology Innovation Survey elicited responses from 668 CEOs of start-ups, medium and large enterprises, venture capital firms, and angel investors around the world.
44% of the executives suggest the global high-tech innovation hub would shift from Silicon Valley to China over the next 4 years. Interestingly, more than half of Asia Pacific CEOs thought so as did 40% in Europe, the Middle East and Africa while only 28% of Americans agreed. On the other hand, only 39% of US respondents stood with America as the most promising land for innovation as opposed to 71% in China saying their country would be.
Interviewed by cellular-news.com, KPMG partner Gary Matuszak, who headed the study, remarked, “China’s anticipated parity with the US tech sector shows the significant challenge facing the US to retain its position as an innovation leader, as other key countries will continue to take steps to boost technology innovation and attract tech entrepreneurs as well.”
Egidio Zarrella, a partner at KPMG China, points out that under the central government’s 12th Five-Year Plan (2011-2015), massive investment is being fostered in shared services and outsourcing, mobile payments, and Cloud computing. Of these three areas, 30% of respondents viewed Cloud Software as a Service (SaaS) as representing the next stage in consumer technology by 2015. 22% mentioned Cloud Infrastructure as a Service (IaaS) followed closely by SaaS as exerting the greatest impact on the transformation of businesses going forward. Almost 30% added that Cloud would also transform smartphones, tablets, and other mobile gadgets.
Late last month, at a forum organized by storage giant EMC2, keynote speakers lauded China for taking the lead in cutting edge Cloud computing deployments. Noting that his mainland customers are more willing than their Hong Kong counterparts to adopt Cloud due to their less reliance on complex legacy systems, Denis Yip, EMC2 president for Greater China said, “China is leading the way, which is strange because this is normally what happens with the US and then China follows…They are leading because there is no burden (of extant systems)…”
Partnering with regional Chinese governments, EMC2 is involved in 5 major projects in Qingdao, Zhenjiang, and three other undisclosed cities. Some projects focus on energy and the environment and others on healthcare. EMC2’s customers demand the latest technologies based around the VMAX and VPLEX family of visualization and private Cloud products and VNX unified storage line-up technologies. The projects are being led by local governments in a top-down fashion with the intention of bringing together siloed departments.
“The old school idea was to get R & D done in China because it was cheaper, but now you actually get better R & D done there,” global marketing CTO Chuck Hollis told a UK based IT journal.
“The pace of technology innovations today is happening at unparalleled speed and China’s projected rapid rise to prominence as a technology leader would be another example of this”, added Mr Matuszak of KPMG.
According to the Battelle Memorial Institute and R & D Magazine, as a percentage of global R & D spending, the US takes up 34% and China 12.9% witnessing a dramatic rise in investments. India, by contrast, spends a paltry 3%. Total global R & D spending is projected to increase 3.6% to US$1.2 trillion.