Why Shenzhen isn’t just a manufacturing hub?
Shenzhen is typically perceived as a manufacturing hub. In fact, what’s happening there is far more exciting than simply the making of products; the city is producing world-class innovation and modeling approaches that any business can learn from.
A brief history of computing
Early pioneers of computing, such as Bill Gates and Paul Allen, often saw manufacturing as a hobby, assembling components and building machines in their garages. Eventually, this experimentation led to the first personal computers. When the time came to bring computers to a mass market, these pioneers were in a position to order many interchangeable parts and put them together in a consistent way. This boosted the number they could build and reduced the price. For decades, making high quality products was a solid business model. Dell, HP, Lenovo, Samsung, Apple, and others all followed this blueprint successfully.
Over the past several years, however, cloud computing has shifted the landscape. By bringing many computers together, it’s possible now to generate almost unlimited processing power. As a result, the innovation focus has shifted to software, a shift that has both librated the process of change and radically shortened feedback cycles. Now, anyone with a computer and coding skills can build and test an app, with very little capital investment.
Shenzhen has taken that cycle to its logical next step, allowing people to build and test hardware at a speed comparable with software.
Fishing village to a technological metropolis
In 1979, Shenzhen was chosen to be China’s very first special economic zone. At the time, it was a fishing village with a population of fewer than 300,000 people. By 2020, it’s anticipated that the city will be home to an excess of 15 million people. In few decades, Shenzhen has been transformed to a degree that would be unimaginable in most cities.
The city has gaind a reputation as the world’s workshop, and there’s a reason for that. A staggering quantity of goods is manufactured there. Recently Shenzhen has evolved into a perfect storm of markets, workshops, and factories. This speed up the process of design, build, and test new hardware at an astonishing pace.
Like no other place in the world, Shenzhen contains the ingredients for building, testing, and refining prototypes of electronic products. Retailers, component suppliers, and factories coexist practically side-by-side. When Kickstarter projects are funded, their founders turn often to Shenzhen to build the products. When politicians ask why manufacturing cannot be relocated to the United States, Shenzhen is the answer.
A license to tinker
While the ease of manufacture in Shenzhen is exciting in itself, the real revolution stems from the ease of building and testing new products. Imagine that you have an idea for a new mobile phone. In Shenzhen, you could literally engage a factory to produce a few prototypes, then stand outside on the street, sell them to passersby, and request a feedback. When your buyers tell you what they like and what they don’t about the phone, you could adjust the design accordingly and manufacture another batch. Both large and small companies are collaborating to create a lightning-quick manufacturing cycle that invites entrepreneurs to receive a real-time feedback from their marketplaces.
What does this mean to you?
If you manufacture a product, Shenzhen offers an extraordinary opportunity. Shenzhen is home to more than 200 incubators, where people experiment with new ways of making products. For those with an idea for a new product or company, Shenzhen can provide you with an unparalleled speed of manufacture and feedback. It’s a place where you can refine your idea even before you take it into production.
By the same token, if you ignore what’s happening in Shenzhen, you may find that your business model becomes increasingly antiquated. Hardware innovation is no longer simply about making a product and selling it. It’s about listening to the market, receiving feedback, and making adjustments based on that feedback. Shenzhen leads the way in making this model a reality, and it’s an example that makers of products around the world can understand and use to their advantage.
In hardware innovation, all roads lead to Shenzhen
If you’re reading this post in the West, you may have been unaware of the enormous influence Shenzhen is exerting on the evolution of manufacturing. You may not realise, for example, that Shenzhen is the place where drone manufacturing first began at scale, and the home of the world’s largest drone company, DJI. Perhaps you’ve noticed the massive recent growth in the popularity of e-cigarettes. These, too, started in Shenzhen and have now spread across the globe.
Most powerfully of all is the influence of Shenzhen in the mobile phone industry. Apple has been a huge player in this field, however, it is seeing significant competition from Chinese competitors (Huawei, Xiaomi, Vivo, and Oppo). Companies based in Shenzhen are taking advantage of the city’s unique business environment and rapid feedback loops to out-innovate the global leader in the smartphone market.
Every innovator needs to visit Shenzhen
Shenzhen is an incredibly instructive example of a city, built from practically nothing, that has become a global leader in technological innovation. The old model of designing and shipping hardware products is slowly dying. The future lies in partnerships that allow rapid innovation and testing of prototypes. If you produce hardware, or you’re thinking of doing so, you may benefit considerably from visiting the city and testing your ideas. Even if you’re working at a scale that makes it uneconomical to actually travel there, you can still learn from the principles that enable companies in the city to innovate so rapidly.
The hardware innovation cycle is shrinking, and Shenzhen is at the vanguard of this movement. The process of listening to customer feedback, understanding what sells, and revising your designs based on that information, is critical to success in the digital era.
