Regional Innovation System in China: Regional comparison of technology, venture financing, and human capital focusing on Shenzhen

Author Name MOTOHASHI Kazuyuki (Faculty Fellow, RIETI)
Creation Date/NO. May 2018 18-P-011
Research Project Empirical Analysis of Innovation Ecosystems in Advancement of the Internet of Things (IoT)
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Shenzhen has become a hot spot of innovation in China. In this paper, we characterize Shenzhen innovation by comparing Beijing and Shanghai using patent and venture investment data.

First, the role of university and public research institutions is small in the Shenzhen innovation system, as compared to Beijing and Shanghai. In contrast, private high-tech firms such as Huawei, ZTE, and Tencent are leading the innovation scene in Shenzhen.

Second, it is found that high-tech startups are geographically concentrated in the Nanshan district, particularly Yuehai JieDao where national level high-tech zones are located. Recently, the number of startups have been increasing and local big firms such as ZTE provide human resources for such startup firms.

Third, inventor disambiguated information based on patent data allows us to look at inter organizational talents moves. It is found that such moves tend to occur within short distances, such as within the same district (e.g., Nanshan district).

To sum up, Shenzhen has truly become a hot spot of high-tech entrepreneurship and innovation, however, the dynamics are very much regionally bounded. Therefore, it is important to become a local player in order to take advantage of innovation movements in Shenzhen, by means of minority investment by corporate venture capital (CVC) into local startup firms.