The US and China are the most promising technology hubs for disruptive breakthroughs, according to a recent global survey by KPMG.
According to the survey results, China continued to secure two out of the five cities expected to become next leading tech hubs in addition to Silicon Valley. However, Shanghai saw its No. 1 position overtaken by Tokyo and New York, while Beijing slid one place to rank the fourth. Additionally, an increasing proportion of respondents (9 percent vs 6 percent in 2014) saw India as an emerging tech innovation leader.
The 2015 Global Technology Innovation Survey draws insights from 832 technology executives globally – including 93 from China – and identifies disruptive technologies, barriers to tech innovation adoption and monetization opportunities driven by emerging technologies.
When asked about which industry will see the greatest transformation due to emerging technologies, respondents in China rated the technology sector (30 percent), consumer markets (16%) and financial services (13%). Automotive/transportation was among the top three in 2014 findings.
Egidio Zarrella, Clients & Innovation Partner, KPMG China, says: “China’s tech-savvy consumer population has helped to drive significant technology advances. Chinese manufacturers, meanwhile, are undergoing a shift in industrial production, from ‘made in China’ to ‘innovate in China 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 ecosystem similar to Silicon Valley, but accentuated with unique Chinese characteristics.”
The survey also finds that cloud, mobile technology, internet of things (IoT) and Data & Analytics (D&A) are expected to drive innovation globally. Technology business executives in China see artificial intelligence (AI) and IoT are of growing importance in terms of technology disruption. One-third of China’s respondents saw consumer markets has the greatest potential to monetise from adopting IoT, while 26 percent said the adopting of AI will benefit the technology sector the most, finds the survey.
In China, nearly one-sixth of respondents said AI and cloud will be the most indispensable consumer technology over the next three years, while 9 percent of them highlighted IoT. Similar findings were found last year, however autotech was identified instead of AI. In terms of technologies that will drive business transformation, the top three are: IoT (14 percent), biometrics (12 percent), AI and cloud (both 9 percent). These compared to cloud (21 percent), D&A (13 percent) and autotech (13 percent) in 2014.
Irene Chu, Partner and Head of High Growth Technology & Innovation Group, KPMG China, says: “Bolstered by the government's focus on economic reforms and entrepreneurship to reposition the economy toward value-added products and services, Chinese companies have been adapting their business models and investing in new technologies to stay competitive and relevant.”
Separately, the survey found that cyber securities, tech complexities and risk management are the common top barriers to commercialise technology innovation, both in China and globally. Different factors, however, were identified as technology innovation inhibitors. Respondents globally highlighted the challenges are access to capital (20 percent), restrictive regulatory policies (18 percent) and lack of innovative corporate culture (15 percent); respondents in China named lack of innovative corporate cultures (24 percent), access to engineering talent (23 percent) and lack of agility – rapid iteration (23 percent) as top constraints.
Chu concludes: “China’s tech savvy consumers are helping to drive significant technology advances. Chinese companies are increasingly realizing the benefits of adopting emerging technologies and innovating to meet the rising and changing consumer demands. On the enterprise front, new technologies and disruptive business models are redefining value chains and new competitors are catching up to take away business from established companies. Companies cannot afford to stay still but to embrace a new normal and innovate. Fostering and commercializing innovation is top of mind for Chinese companies.”
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About the KPMG 2015 Global Technology Innovation Survey
In the August - September survey of 832 business executives globally whose organizations were focused on the technology space, 29 percent of the respondents were in the Americas, 42 percent in Asia Pacific, and 32 percent in Europe, Middle East and Africa. Sixteen percent of respondents were from the United States and 11 percent from China.
KPMG is a global network of professional firms providing Audit, Tax and Advisory services. We operate in 155 countries and have more than 162,000 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.
In 1992, KPMG became the first international accounting network to be granted a joint venture licence in mainland China. KPMG China was also the first among the Big Four in mainland China to convert from a joint venture to a special general partnership, as of 1 August 2012. Additionally, the Hong Kong office can trace its origins to 1945. This early commitment to the China market, together with an unwavering focus on quality, has been the foundation for accumulated industry experience, and is reflected in the Chinese member firm’s appointment by some of China’s most prestigious companies.
Today, KPMG China has around 10,000 professionals working in 17 offices: Beijing, Beijing Zhongguancun, Chengdu, Chongqing, Foshan, Fuzhou, Guangzhou, Hangzhou, Nanjing, Qingdao, Shanghai, Shenyang, Shenzhen, Tianjin, Xiamen, Hong Kong SAR and Macau SAR. With a single management structure across all these offices, KPMG China can deploy experienced professionals efficiently, wherever our client is located.
KPMG’s annual Technology Innovation publication, “The changing landscape of disruptive technologies” provides an outlook of emerging technology trends on a global scale, including insights from over 800 leading technology industry visionaries ranging from serial startup entrepreneurs to Fortune 100 tech industry leaders and venture capitalists.