Cloud technology will drive innovation in China over the next three years, while automotive technology and D&A are also among the top five in terms of importance, according to a recent technology survey by KPMG.
Cloud technology will drive innovation in China over the next three years, while automotive technology and data and analytics (D&A) are also among the top five in terms of importance, according to a recent technology survey by KPMG.
KPMG’s 2014 Global Technology Innovation Survey draws insights from 768 technology executives globally – including 106 from China – in order to identify disruptive technologies, innovation trends and new monetisation opportunities driven by emerging technologies.
Around one-fifth of China’s respondents said cloud technology will drive innovation over the next three years; one in ten highlighted automotive technology and another ten percent indicated D&A as top drivers for innovation. Meanwhile internet of things/machine-to-machine and nanotechnology also featured as options, compared to the overall top picks: which were cloud, mobile platforms and apps, 3D printing, biotech/digital health/healthcare IT, internet of things, D&A and artificial intelligence.
The survey also finds that the US and China continued to show the most promise for disruptive breakthroughs. Almost a quarter (24 percent, unchanged from last year) of global respondents chose China, while a declining number of respondents (30 percent vs 37 percent in 2013) highlighted the US.
Egidio Zarrella, Clients & Innovation Partner, KPMG China, says: “Chinese manufacturers are undergoing a shift in industrial production, from ‘made in China’ to ‘innovate in China for China’. Given the huge volumes, many companies are likely to focus on the Chinese market and design products that are tailored for China. We see increasing numbers of entrepreneurs, angel investors and venture capitalists establishing a presence in China and seeking out new innovative ideas and projects. Their actions are helping to create an eco-system similar to Silicon Valley, with Chinese characteristics.”
In terms of sectors, over one-fifth of China’s respondents highlighted technology (22 percent) and manufacturing (21 percent) as areas set to see greatest transformation in next three years, followed by automotive/transportation (11 percent) and consumer markets (10 percent). On the flipside however, respondents also indicated a number of challenges which need to be addressed in China: technology complexity (37 percent), security (31 percent) and risk management (27 percent). As the take-up of mobile devices and internet technology increases in China and consumers spend more, the report notes a rise of security and privacy concerns, in line with global trends.
Respondents in China indicated that innovative technologies will improve their business efficiencies and results in higher productivity. The survey finds that a growing number also highlighted the benefits of more effective R&D and increased market share.
Zarrella concludes: “The goal of both government and businesses is to continue to develop China into a global e-commerce player, in line with the country’s transition from an investment-heavy growth model, to a consumption-driven model. China’s online population is not only incredibly large, it is also highly diverse, in terms of consumer behaviour. China is not one market, every province and every city are different. Businesses should not assume that the China’s consumer market is homogeneous.”
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About the KPMG 2014 Global Technology Innovation Survey
In the July - September 2014 survey of 768 business executives globally whose organizations were focused on the technology space, 25 percent of the respondents were in the Americas, 47 percent in Asia Pacific, and 28 percent in Europe, Middle East and Africa. Seventeen percent of respondents were from the United States and 14 percent from China.
KPMG is a global network of professional firms providing Audit, Tax and Advisory services. We operate in 155 countries and have 155,000 people working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.
KPMG China has 16 offices in Beijing, Chengdu, Chongqing, Foshan, Fuzhou, Guangzhou, Hangzhou, Nanjing, Qingdao, Shanghai, Shenyang, Shenzhen, Tianjin, Xiamen, Hong Kong SAR and Macau SAR, with around 9,000 people.
KPMG China refers to the member firms of KPMG International in Mainland China, Hong Kong SAR and Macau SAR.