13 Jun

Is China the next Silicon Valley?

As a European company with a strong international attitude, we keep a watchful eye on the evolution of global technology market. Silicon Valley in California, US, has always been in our radar, being the home to many of the world’s largest high-tech corporations and thousands of startup companies. It accounts for about one-third of all US venture capital investment, providing smart, innovative entrepreneurs with expertise, networking, capabilities and resources to kick off their businesses. Last year the Silicon Valley hub drove about 67 billion-dollar investments for about 2,900 transactions and projects, according to Bloomberg.

However, business analysts are now looking with peculiar interest at China. As reported by CNBC, venture capitalists in Silicon Valley are worried that China might overtake the US in areas such as artificial intelligence (AI) and autonomous vehicles. Chinese start-ups dealing with AI are already attracting more funding, since they received 48% of global AI funding versus 38% in the US.

With about 4.7 million young talents, China has the world record in the number of STEM (Science, Technology, Engineering and Mathematics) graduates, and the government is particularly keen on promoting R&D and streamlining regulation to encourage local startups and projects. But some experts argue this might not be enough to build a winning, globally influential ecosystem as Silicon Valley’s, as China still needs to solve some severe internal issues impacting on innovation governance.

What about Europe? Although London, Berlin and Paris are among the top 10 most attractive world cities for startups, the EU market is stuck to an intermediate maturity level. In 2017 hi-tech spending was back to pre-crisis levels, and the VentureEU program will make 2.1 billion euros available for venture capital investments in innovative start-ups and scale-up companies. This project is expected to trigger other 6.5 billion euros from private businesses and stakeholders, doubling the amount of venture capital currently available in Europe.

So, while monitoring what happens at the two extremes of the globe, Europe might try to play gooseberry and finally stand up for its wealth of talent, world-class researchers and skilled hi-tech entrepreneurs.

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