Whilst visiting a maker space in Shenzhen in January 2015, Chinese Premier Li Keqiang stressed that “Maker spaces fully demonstrate the vitality, entrepreneurship and innovation, which will be the driver of Chinese economy growth in the future.“
Chinese leadership has made the development of creative entrepreneurship a policy priority. As a result the country is now busy developing an ecosystem that is more business friendly for small creative companies as well as start-ups. It wants to encourage creative entrepreneurship in areas where China is already strong – information technology industries. In this process the concept of “maker space”(1) has gained rapid popularity.
Shenzhen – an ideal hotbed to encourage growth of creative entrepreneurship
Why choose Shenzhen for a maker space? The city established in 1979 is the fastest growing city in human history, evolving from a fishing village to a 14 million inhabitants megalopolis squeezed between Guangzhou and Hong Kong. It is also one of the wealthiest (from 1979 to 2011 its average annual growth rate of the GDP was a staggering 25%). Shenzhen epitomizes 39 years of uninterrupted economic growth in China. It was the first free trade economic zone to test the opening policy with the introduction of Chinese-style capitalism. The city hosts the largest market in the world for electronic components – Huaqiangbei. Shenzhen is central place for inexpensive electronic manufacturing capacities (circuit boards, drones, LED, liquid injection mould etc). In 2014 the city boasts € 10 billion invested in R and D, accounting for 4% of GDP, a figure matched only by South Korea and Israel(2).
In spite of its young age the city already ranks fourth in economic power on the Chinese mainland, and second in economic competitiveness. It is the high-tech and manufacturing hub of southern China, home to the world’s third-busiest container port, and the fourth-busiest airport on the Chinese mainland. In the ranking of global city competitiveness (the Economist -2012) Shenzhen ranks second on economic strength and 25th on financial maturity. It is home to leading high-tech companies such as Huawei, Xiaomi, Tencent or ZTE. The number of Shenzhen’s PCT (Patent Cooperation Treaty) applications has topped Chinese cities for 10 consecutive years. Shenzhen ranked fourth in Forbes’ 2013 list of innovative mainland cities.
China’s take on maker space
The maker space concept originated in the Silicon Valley in 2005. In California it started as a grass-roots movement shaped by ecological considerations and community works. Maker space aims to stimulate collaboration and empower individuals providing a co-working place to experiment, share and network. The use of the “Maker space”’s terminology is a reminder of the mesmerizing impact on those inspired by the Californian digital-tech ecosystem. The main advantage of maker spaces is the reduction of development costs by sharing the use of expensive hardware. The platform democratizes hardware innovation(3) empowering people contributing to innovation and creativity.
The maker movement is recent in China. As is often the case in China the priority is economic: support creative start-ups at an early stage to identify future business winners. China has over 7 million college graduates every year.
Maker spaces in Shenzhen are in effect large incubators (providing co-working space, mentoring, marketing and financial support) for young entrepreneurs with ideas. They concentrate on ICT hardware and software development (3-D printing, robots, drones, connected equipment, mobile apps and internet of things). Their development and funding is supported by holding companies active in real estate, finance, construction or logistics. Such companies can nurture creative entrepreneurs, provide business training, seed funding as well as investment capital at later development stage. In effect the strength of the Shenzhen‘s maker spaces lies in the integration of strong financial investment capacity to fund new businesses. This will make Shenzhen attractive to creative professionals worldwide looking for capital funding and affordable manufacturing. Shenzhen holds the second largest stock exchange of the country.
To survive in the economic transformation and remain competitive large holdings have an interest in teaming up with smaller companies and nurturing the emergence of creative SMEs. This strategy will give them the innovation edge they are lacking, provide new investment opportunities (albeit more risky) but also leverage real estate investment currently suffering from the demise of traditional “brick and mortar” commerce. Industrial companies also benefit from being associated with the new breed of modern and cool entrepreneurs, thus rejuvenating their image.
The business model of most maker spaces is based on the investment opportunities that future successful enterprises may generate. Space is made available to entrepreneurs at a low price (around 150 Euro/ month). Start-ups would be expected to pay for certain legal or marketing services provided. Social mingling and business cooperation will be encouraged through events and the unavoidable coffee bar that will provide a sense of fun and community feel. Creative entrepreneurs are close to a rich electronic manufacturing ecosystem.
In China, social considerations, which to a large extend triggered the maker movement in the USA or Europe are not the main driving force. 3wcoffee.com(4) started in 2010 as a social coffee place for IT buffs in Beijing later transforming into an incubator/maker space drawing upon a large number of investors (under a crowdfunding-type model) to support creative entrepreneurs across industry fields(5). The social aims of maker spaces characterized by stimulating interactions with communities and citizens to generate user-driven innovation or simply to empower non-technical people to make things , to co-create with fellow citizens, are not yet on the agenda. So far there is little attempt to create multidisciplinary teams beyond the technology sectors.
There are now more than 53 maker spaces in China (4 in Shenzhen). Their links with research centers and universities is developing fast. Shenzhen has been welcoming an international maker fair since 2013. Its 2015 edition was the largest in Asia.
Paving the way to a creative friendly ecosystem
Shenzhen is building strong education institutions and training facilities specialized in supporting creative entrepreneurship (Shenzhen University is opening its International business school in 2016). In addition the city’s is strengthening its cultural offer which is lagging behind neighboring cities. This is important to attract creative talents who will be looking for social amenities (restaurant, bars, music and art festivals) conducive to social interactions and fun (art and culture stimulate creativity).
A measure of public intervention could enable the city to take stock of the most promising initiatives, monitor and evaluate the impact of maker space on the economic fabric of the city, consider policies that would encourage maker space in taking a long term vision inspired by the need to create an ecosystem not solely reliant on short term profits. Public intervention will help to expand maker space’s role to encompass social innovation and harness creativity for social goals (environment or social cohesion). Essential soft infrastructure remains to be consolidated in the field of training (co-innovation; entrepreneurship skills, multidisciplinary collaboration) or in the field of law enforcement (to address ownership of invention and commercial exploitation or to ensure contract enforcement) allow creative entrepreneurs to benefit from their endeavors and skills.
1. A maker space is a community center that provides technology, manufacturing equipment and educational opportunities to the public to make things. Maker spaces allow community members to design, prototype and manufacture items using tools that would otherwise be inaccessible or unaffordable such as 3-D printers, digital fabrication machines and computer-aided design (CAD) software. (source: techtarget.com)
2. Despite the crash, the next Sillicon Valley is in China , Amol Sarva, 20.10.2015, Huffington Post.com
3. The Maker Movement Manifesto, Mark Hatch, Mc Graw Hill 2014
4. www.3wcoffee.com – 3W coffee was set up in 2010
5. 3W, an innovation service institute in Beijing’s Zhongguancun, and JD Finance, the finance business unit of China’s e-commerce giant JD.com, announced the establishment of 3W Incubator Management Co in April 2015.The company, with 100 million yuan ($15.99 million) investment from JD, is going to open ten flagship stores, enter 100 cities around the country and provide services for 1,000 incubators. In the next step, 3W plans to build China’s first complete entrepreneurial ecosystem by taking advantages of JD’s rich resources, and set up a college for incubation services.(Source: China Daily 2 April 2015)