Engine of Innovation:

BEIJING and SHANGHAI: you do not have to look very far to see the evidence of the rise of emerging companies in the Chinese capital. On almost all major thoroughfares, hundreds of bright yellow or orange bicycles are lined up along the sidewalk, where pedestrians stop to unlock them with their smartphones.



Bicycles are a ubiquitous feature of many of China's big cities, where bicycle sharing exploded in the mainstream overnight and a wave of emerging companies flooded the market. While initially chaotic, damaged bicycles were thrown randomly on the sidewalk and even on the street, a kind of order arose as companies had developed loyalty programs that rewarded users for leaving bicycles in designated areas.

"China had an oversupply problem last year," says Angela Cai, the world leader in public relations for the new bicycle exchange company. "There were between 20 and 30 industry players that suddenly emerged in six months."

The rapid growth of the bicycle sharing industry reflects the technology sector of Beijing and China in general. In just one decade, the country has gone from being the global factory that produces cheap products for the West to a country that is about to be a world leader in technology. For this, he has to usurp Silicon Valley. After all, from the computers we use to the social media platforms we communicate with, our lives have revolved around the technology Silicon Valley has made possible. If the Chinese technological scene gets its way, at some point in the not so distant future those ideas will come from China.

In recent years, a large amount of venture capital funds, the migration of talent and the support of the government have led to a wave of new companies in Beijing. Last November, the entrepreneurial resource company Expert Market named the Zhongguancun district of Beijing (where the headquarters are located) the main technological center of the world, even ahead of Silicon Valley. Evidence of the Beijing home culture is easy to find beyond the stacks of bicycles. It would be very difficult to set foot anywhere in this city of 21 million people without being on a subway trip away from a shared workspace full of programmers and designers, or an office that houses a new technology company.

"The West has a really wrong idea of what is happening in China," says Helena Javitte, director of the DayDayUp innovation program. "They think China is copying Western technology and trying to take over the world."

DayDayUp offers joint workspaces, as well as accelerator programs for new companies and large companies seeking to innovate. Javits, who is originally from France, works with both Chinese companies and global firms from countries such as France and Israel that are eager to tap local talent or gain a foothold in the Chinese market.

Javits is headquartered in the company's office in Sanlitun, a modern suburb of Beijing where high-end Western retail stores such as Adidas and Apple have opened flagship stores in nearby new shopping centers. The area is popular with locals and foreigners, and it is not uncommon to find people like Javits who have come from outside of China to be part of the technological scene here.

Emerging technologies define startups in Beijing:

Many of China's new technology companies and companies focus on emerging technologies such as artificial intelligence and the driving cars, which makes the country a world leader in these spaces.

Chinese companies are benefiting from the global talent that wants to work in cities such as Beijing and Shanghai."Sometimes, it's not even because we [companies in China] have the highest salary, but we have the most exciting challenges," said Le Shen, a spokesperson for Ant Financial. Ant Financial is currently the most valuable private technology company in the world, with a recent round of financing valued at 150 billion dollars, even more than Uber. It is best known for Alipay, a ubiquitous mobile payment system in China that allows users to make payments with their smartphones. Shen points to Singles Day as an example of one of the challenges that make China a unique market. It's a Chinese holiday similar to Valentine's Day, but the size of the Chinese national market means that a lot of users are heading online to buy the holiday. Alipay broke records in 2017 when it handled 256,000 transactions per second, a number that eclipsed even Black Friday and Cyber Monday in the US.
Ant Financial, like many technology companies in China, has also begun to implement significant resources in artificial intelligence, seeing that the number of users accelerates rapidly. Your AlphaRisk system, for example, is an unattended AI that can detect emerging fraud patterns and respond accordingly, without human intervention. It is all these challenges and projects that help attract global talent to Ant Financial, says Shen.

Obstacles to Global Ambitions:

Of course, where China still has to catch up with Silicon Valley is the international success. China's national economy is so large (its population is equal to that of Europe and North America combined) that many companies simply do not have the need to expand beyond their borders. Chinese companies may also be perceived negatively outside the country. Cai of-of says that his company found this when it came time to expand internationally. The representations of food in the Western media have focused on the stacks of bicycles that have accumulated on Chinese streets. The Toronto media were no different: several media ran with the "bike stack" angle when OFO's communications chief in North America said earlier this year that Toronto was the "best option" for the next expansion of the company. There is also a prevailing fear that the Chinese government may use espionage or confiscate the data at the whim of Chinese companies. Chinese smartphone manufacturers Huawei and ZTE can not make US carriers sell their phones and have also been accused of espionage against United States citizens by the heads of the FBI and the CIA. To date, however, no evidence has been presented to support the espionage allegations. For those in the Beijing home scene, that's all noise. The ideas that come out of China and the speed at which they run make China's innovation take an unstoppable leap."China used to copy ideas because of the poor quality here," says Rae Liu, marketing manager at DayDayUp. "But poor quality is not so much a problem anymore."In a conversation at the DayDayUp offices, Liu and the team note that in some cases, Western companies are beginning to copy ideas from China. Chinese social media companies have for years integrated mobile payments through their applications, something that Western players, like WhatsApp, now also want to do.
"It feels like a real change," says Rei.