LocationsDeep Tech Series Vol. 7: Shenzhen’s Deep Tech Ecosystem - Driving Innovation and Sustainability
November 29, 2024
Deep tech, driven by disruptive innovations rooted in scientific discoveries and engineering breakthroughs, stands at the forefront of innovations, offering new solutions that extend beyond the scope of traditional development approaches. The latest Sustainable Development Goals (SDG) Progress Report reveals that only 17% of the SDG targets are on track. Furthermore, the Asia-Pacific region is not on course to meet any of the 17 SDGs by the agreed deadline, highlighting the urgent need for innovative approaches. Research suggests that 97% of deep tech innovations contribute to one or more SDGs, demonstrating their potential to accelerate progress. From advanced materials and biomimicry to biotechnology, deep tech holds promise in addressing global challenges such as water scarcity, sustainable energy, and climate change. In this blog, we explore Shenzhen’s approach to building a deep tech ecosystem, focusing on the insights it can offer to developing countries aiming to foster their own innovation-driven economies. In future editions, we will expand our perspective by exploring examples from other countries, offering a wider context through deep dives into inspiring approaches to building deep tech ecosystems.
Deep tech plays a role in China’s pursuit of its long-term sustainable development and innovation-driven economy, as highlighted in many high-level national strategic plans and regulations. This vision is articulated in the 14th Five-Year Plan, launched in 2021, which provides a policy framework and robust support for the advancement of deep tech. Furthermore, the 2021 Law of the People’s Republic of China on the Progress of Science and Technology underscores the government’s commitment to continuously fostering advanced science and technology innovations that drive industrial transformation. In alignment with these national priorities, a recent initiative, led by the Ministry of Industry and Information Technology alongside six other ministries, identified a series of “future industries” (未来产业) including quantum computing, 6G network, SpaceTech, and future materials. These industries are earmarked as key targets for enhancing the “new quality productive forces” (新质生产力), signaling a strategic focus on deep tech sectors that will define China’s innovation-driven economic landscape. Other countries aiming to strengthen their own deep tech sectors can draw from this strategic foresight that integrates deep tech into long-term planning to ensure a sustained pathway toward innovation-driven growth.
Driven by supportive policies and regulations, along with a conducive environment, China’s deep tech market is projected to grow at a compound annual growth rate (CAGR) of 19.2% through 2034. The investment landscape in China’s tech sector from 2017 to 2022 reveals a strategic pivot towards deep tech. In 2017, deep tech accounted for just 15% of total investments, but by 2022, it had surged to a commanding 71%. Key sectors like biotechnology and semiconductors have experienced significant growth, buoyed by specific regulatory support and increased interest from both local and global investors. Furthermore, China’s vast consumer market offers a unique potential for the deep tech industry. The high level of consumer acceptance of new technologies and innovations provides an ideal environment for firms developing breakthrough deep tech solutions. This example highlights how an enabling policy, legal, and regulatory framework, tailored to specific national strengths and needs, can accelerate a country’s strategic innovation trajectory.
Data as of 31 December 2022.
Shenzhen stands as a key hub within China’s deep tech landscape, renowned for its innovation and entrepreneurial activities. Shenzhen’s ecosystem is characterized by a dense concentration of high-tech companies, technology parks, research institutions, and venture capital firms. Shenzhen’s local government has crafted a set of policies aimed at fostering innovation and attracting talent. This includes generous tax incentives, subsidies for R&D, and financial support for startups in deep tech sectors. The city’s efforts are part of its broader strategy to transition from being a manufacturing powerhouse to an innovation-driven economy. Key initiatives include the “20+8” Industrial Clusters Strategy, which targets 20 strategic emerging industries and eight future industries, including biotechnology, next-generation information technology, and advanced manufacturing. These clusters are designed to foster synergies between businesses, research institutions, and investors, providing a supportive environment for deep tech development. For developing countries, Shenzhen’s experience illustrates the value of building a cohesive ecosystem that integrates government, private sector, and academia to accelerate deep tech development.
Shenzhen’s deep tech ecosystem is underpinned by a network of specialized, high-quality incubators and innovation hubs that provide crucial resources to startups across various sectors. As of 2024, the city hosts over 300 specialized incubators, according to the Shenzhen Science and Technology Innovation Commission. This ecosystem comprises both national and city-level incubators, with key institutions like Shenzhen Bay Entrepreneurship Plaza (深圳湾创业广场), the Research Institute of Tsinghua University in Shenzhen (RITS), and the Shenzhen Institute of Advanced Technology playing a pivotal role in the ecosystem. The incubators in Shenzhen are diversified, ranging from university-affiliated research parks, such as the Shenzhen University-Town Business Park, to cross-border collaborative hubs like the Hong Kong-Shenzhen Innovation and Technology Park. Specialized hubs, such as the Shenzhen Biomedicine Innovation Industrial Park, focus on specific industries, ensuring that deep tech startups receive tailored support and industry-specific resources to thrive. Other countries can draw inspiration from Shenzhen’s focus on nurturing early-stage innovation, where specialized incubation and tailored support play crucial roles in transforming ideas into impactful solutions.
Shenzhen has demonstrated a commitment to fostering public-private partnerships and university-industry collaborations, making these initiatives central to its deep tech innovation ecosystem. One of the examples of these efforts is the Shenzhen Virtual University Park (SZVUP), which brings together over 70 top universities from China and abroad to collaborate with industries on research and innovation. SZVUP has established a platform for knowledge exchange, R&D collaboration, and technology commercialization, with over 1,700 technology enterprises incubated so far. This initiative has contributed to the local economy by leveraging the collective expertise of academic institutions and their industry partners to create high tech startups. Another example is the Research Institute of Tsinghua University in Shenzhen (RITS), jointly established by the Shenzhen Municipal Government and Tsinghua University, which actively fosters cross-border collaborations with ecosystem players worldwide, particularly in knowledge exchange and talent development, including partnerships with countries like Saudi Arabia and Germany. The city has also introduced a policy package aimed at making Shenzhen an attractive destination for highly skilled professionals. A 30-point plan is designed to create an environment that appeals to top talent globally. This approach demonstrates the value of cultivating cross-border partnerships and establishing supportive policies to draw and retain talent essential for sustaining an innovation ecosystem.
Exploring the deep tech ecosystem in Shenzhen with key stakeholders back in August 2024, on the sidelines of the launch of the HUA HUB SDG Innovation Lab.
Shenzhen’s deep tech ecosystem offers valuable inspiration for other developing countries aspiring to build their own innovation-driven economies. Its government-led model demonstrates how organized scientific research and development (有组织科研) can provide a roadmap for industries to follow, ensuring that innovation is both strategic and aligned with national priorities. By prioritizing public support, fostering cross-sector partnerships, and creating a strong talent pipeline, Shenzhen has demonstrated how strategic focus can transform an economy. Developing countries can adopt similar approaches by tailoring policies to their unique development contexts, encouraging university-industry collaboration, and investing in specialized incubators that support startups. Moreover, international partnerships, such as those Shenzhen has formed, can further drive sustainable development and foster global knowledge and talent exchange. By embracing these strategies, developing countries can unlock the potential of deep tech to drive sustainable growth and foster innovation.
This is the seventh blog of the Deep Tech Series. Click here for the full list of blogs.