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1、The Innovation Ecosystem in ChinaWe help you in every step of your innovation journeyPartnering with the largest organizations worldwide gives us a line of sight to identify the main pain points affecting each industry.We then focus on sourcing the best startups that can provide the best solutions t
2、o these challenges.By collaborating with startups,corporations increase operational efficiencies,decrease costs,find new product lines,and become more innovative from the core.500+Corporate Partners50+Offices Worldwide50,000+Carefully curated international startups in our networkGlobal ReachOne of o
3、ur greatest ambitions is to make our ecosystem accessible wherever you are.With offices across the world,were proud to be the worlds largest innovation platform by geographic reach.$12bn Plug and Plays startup community has raised$12bn in venture funding JOIN THE PLATFORM PNPTC.COM/JOINWe connectthe
4、 best technology startups and the worlds largest corporations.MunichParisAmsterdamBeijingTokyoClevelandValenciaFrankfurtStuttgartSingaporeJakartaAbu DhabiNanjingShanghaiMadridMilanNorthwest ArkansasBangkokKyotoSo PauloDetroitNorth DakotaBen GuerirGenevaViennaTopekaOsakaJohannesburgSeoulTorontoZhengz
5、houChicagoShenzhenBarcelonaIstanbulWuhanWuxiHamburgAntwerpCairoAlbertaSilicon Valley HeadquartersNur-SultanRiyadhHyderabadSavannahBaselModenaUzbekistanUnited KingdomIndexCorporate Innovation in ChinaInternal InnovationIntroductionExternal InnovationCollaborative InnovationCross-Industry Innovation47
6、891013The Innovation Ecosystem in China3Startup Acceleration14City Innovation19An Introduction to the Innovation Landscape in ChinaIn 2020,while the COVID-19 pandemic changed everyones life,we were surprised to see innovative companies that continued achieving new milestones.The audit speed of the c
7、apital market registration system has accelerated the process of enterprise listings there are 535 domestic companies listed,a year-on-year increase of over 60%.The 2021 Global Investment Trends Monitoring report released by the United Nations Conference on Trade and Development(UNCTAD)shows that gl
8、obal foreign direct investment(FDI)has fallen sharply by 42%,but Chinas absorption of foreign capital in 2020 will rise against the trend,surpassing the United States to become the worlds largest foreign capital inflow country.As of the end of 2020,a total of 7,559 investments took place in the dome
9、stic equity investment market,slightly less than in 2019,yet the amount invested reached 8,871.49bn yuan($1,358.22 bn),which represents an annual increase of 14%.In terms of corporate venture capital,according to CB Insights and a 2020 Global CVC Report,the number of global CVC investments accounted
10、 for 24%of the overall venture capital investments.In China,CVC investments have developed more rapidly.In 2020,there were 390 investments in which CVCs participated,amounting to$1bn,an annual increase of 68%.The Innovation Ecosystem in China4Chinas absorption of foreign capital in 2020 will rise ag
11、ainst the trend,surpassing the United States to become the worlds largest foreign capital inflow country.“At the same time,according to the statistics compiled by CB Insights and reviewed by the Institute of Innovation Ecosystems(IIE)of Plug and Play China,there are 568 unicorn companies in the worl
12、d with a total value of approximately$1.8bn.The total value of Chinese unicorn companies reached over$800bn.2021 marks Plug and Plays fifth anniversary in China.Over the past five years,weve worked to bring our innovation platform from Silicon Valley to China and adapt it to this countrys landscape.
13、Weve built an open innovation ecosystem for large companies,both domestic and foreign;we also use Plug and Play open innovation methodology to explore Chinese innovation development,conduct in-depth discussions with startups,and introduce outstanding overseas entrepreneurial startups.Over the past s
14、ix years,Plug and Play China has accumulated many use cases and experiences in corporate innovation,startups,and city innovation through observation and practice.The Innovation Ecosystem in ChinaIn 2021,the Institute of Innovation Ecosystem of Plug and Play China found that,regarding the constructio
15、n of a corporate innovation ecosystem,local and foreign companies are embracing innovation more actively.Theyre experimenting with innovation from multiple perspectives:external innovation,collaborative innovation,and cross-border innovation.Companies are also joining and promoting the construction
16、and development of businesses more extensively and efficiently.This innovation ecosystem strategy is unsurprisingly deep-rooted in their hearts and minds.On a global scale,the model of tech innovation accelerators will further spread along with the development of the industry.In China,many internati
17、onal and local tech accelerators have already happened and will become important elements of the innovation ecosystem.Asian countries like China are actively deploying technological innovation industries in terms of policy promotion,R&D expenditure,and patent applications and are leading new regiona
18、l innovation trends.Research capacities in the fields of fuel cell technology research and development,manufacturing,and demonstration operations.The Innovation Ecosystem in China6Corporate Innovation in ChinaPlug and Play Chinas Institute of Innovation Ecosystem believes that,in the era of intellig
19、ent interconnection,the innovative strategy of corporations defines internal innovation,external innovation,collaborative innovation,and cross-border innovation.Internal Innovation Internal innovation is initiated by people with innovative or entrepreneurial goals within the company or organization.
20、This kind of strategy is exercised with the support of internal resources,incentive policies,and innovation systems.The Innovation Ecosystem in China7Internal InnovationUse Case:Internal Innovation at Dongfeng Motor Group Dongfeng Motor Group is a world-class automotive technology company with stron
21、g R&D capabilities.At present,it has formed an excellent internal innovation system located at the Dongfeng Technology Center and has established an overseas R&D base in Sweden.The company has innovated in different fields.In autonomous driving,theyve developed AV technology by leaps and bounds,and
22、its the first to realize the L4 demonstration operation(highly automated driving,which doesnt require driver intervention within the functional range and realizes commercial application).In new energy vehicles,theyve successfully released the new purely electric brand,“Voyah,”which is positioned as
23、a mid-to-high-end new energy vehicle.In fuel cells,Dongfeng has strong scientific research capacities in the fields of fuel cell technology research and development,manufacturing,and demonstration operations.The Innovation Ecosystem in China8External InnovationExternal innovation happens when enterp
24、rises address their innovation challenges by opening to external agents and ecosystems.Businesses incorporate external innovation entities into their own innovation processes.Use Case:Budweiser Chinas External Innovation Practices Budweiser China launched the Budweiser China Sustainable Innovation C
25、enter plan,and together with Plug and Play China,it seeks to find a solution to improve its value chain,focusing on the production,supply and transportation,storage,and retail links.The Innovation Ecosystem in China9Collaborative InnovationIn these kinds of strategies,enterprises unite,coordinate,an
26、d complement multiple entities both within the organization and outside of the organization.Nevertheless,the innovation activity is still focused on one goal.Use Case:SAIC Donghua Best Innovation Practice Shanghai Automotive Group Co.,Ltd.(SAIC),established in 1958,is currently the largest automobil
27、e group in China both in terms of production and sales;Donghua Automobile Industry Co.,Ltd.(Donghua),established in 2008,belongs to the automobile and service segment of SAIC.The Innovation Ecosystem in China10Plug and Play China x SAIC Donghua:Establish a new sub-brand-NXT NXT,a new sub-brand of Pl
28、ug and Play China,is an international innovation platform themed“Mobility+that was jointly established by Plug and Play China,SAIC,and Donghua.Plug and Play synergizes its high-quality resources and capabilities,such as a well-coordinated industry chain,cross-border innovation,capital innovation,and
29、 the linkage of international innovative resources,to empower the automobile industry of China.Plug and Play builds a collaborative platform of resources that shares innovative achievements,recent inspirations,innovative talent,and knowledge systems.Through value sharing and ecological empowerment,P
30、lug and Play China and SAIC joined hands to embark on a new journey of transforming the automobile industry.To help Donghua with its digital transformation,Plug and Play China offered its tested innovation methodology to sort out technical concerns and business pain points through precise projects.P
31、lug and Play China provided a list of more than 200 startups and assisted in screening out the 50 best-matching high-quality projects.In Plug and Play China automobile teams acceleration camp Mobility+,10 startups were selected to participate from nearly 100 applicants.Four cornerstones of the camp
32、involved partnering with the startups,working together on in-depth innovation and cooperation,and covering multiple industries and markets.Plug and Play uses its advantages in corporate innovation to continuously promote the progress of PoC cooperation,which helped five startups and three major corp
33、orate cornerstone partners to formulate five PoC cooperation letters of intent.11The Innovation Ecosystem in ChinaCollaborative InnovationCross-Industry InnovationCross-industry innovation is when an enterprise incorporates knowledge and skillsets from other industries to carry out interdisciplinary
34、,innovative practices.By doing so,the enterprise increases its chance to enter new markets or achieve diversification.Use Case:Plug and Play x SPD Bank Shanghai Pudong Development Bank Co.,Ltd.(SPD Bank)was established in 1992,and it was listed on the Shanghai Stock Exchange in 1999.With its outstan
35、ding performance record and reputed integrity,SPD Bank has become a highly regarded listed company in the securities market of China.With the accumulation of AI,big data,machine learning,5G,and other underlying technologies,Plug and Play China set collaboration with SPD bank with full cycle,multi-ch
36、annels,and one-stop financial services.This collaboration was created to build an international industrial innovation community,an open,sharing,and mutually beneficial innovation community,and to promote the new development of digital transformation of head enterprises.In China,the innovation resour
37、ces commonly used by enterprises are:Scientific research projects in universities and laboratories Projects with startups Cross-industry startup enterprise projectsThe Innovation Ecosystem in ChinaCross-Industry InnovationThe open innovation cooperation between large companies and startups helps cor
38、porations reduce operating costs and unlock market potential.Large companies generally support cooperation with startups,especially in fields with great potentials,such as intelligentization and digitalization.Startups with strong core technologies,high technological development potential,and wide a
39、pplication scenarios are more likely to be favored by large enterprises.However,there are still challenges on the road to practicing open innovation.Specifically,some of the pain points in the innovation cooperation between large enterprises and small and medium-sized enterprises include:Lack of com
40、patibility between the startups technology and the business model of the corporations Startup companies dont fully understand the needs of large companies,which makes it difficult for them to provide customized technical solutions Different innovative concepts lead to high communication costs betwee
41、n the two parties13The Innovation Ecosystem in ChinaStartup AccelerationIn terms of enterprise acceleration,IIE has also found that,in the past few decades,governments,investment institutions,universities,and research institutions have launched various acceleration models to support startups surviva
42、l and development in the China market.In addition,many startups hope to become a unicorn through acceleration.Exploring the unicorn group is also one of the key elements in analyzing the development of the global innovation ecosystem.Based on the overall development of global unicorn companies,IIE f
43、ound that these have maintained stable growth.Weve also seen that some unicorn companies are struggling to go public in the capital market,and some have made their debut on the list but disappeared after a short period,while some other unicorns have leaped to the forefront due to technological break
44、throughs and rapid advances in market size.The Innovation Ecosystem in China14Startup AccelerationAccording to CB Insights,in terms of quantity,global unicorns are mainly concentrated in the fields of financial technology,software and services,and e-commerce,accounting for 42.43%of all unicorns.In a
45、ddition,the number of projects focusing on financial technology(82)accounted for the largest proportion,14.44%,of the total.In recent years,the integration of technological means and financial innovation has accelerated the development of financial technology.Unicorns have been established in a shor
46、t time,and their value has risen rapidly in a short period of time.Internet software and services and e-commerce unicorns benefited from the global popularity of the internet and huge market size.The market potential has increased the frequency of unicorn companies.The Innovation Ecosystem in China1
47、5Startup AccelerationIn terms of countries,as of Dec.31,2020,the United States had the largest number of unicorns,with 251,accounting for 44.19%of the total.The total number of unicorns in China is second only to the United States,with 176,accounting for 30.99%of the total.Unicorns in China and the
48、US have their advantages in specific industries.The US has the largest number of unicorns in the fields of software and services and financial technology.China has many unicorns in the edtech space,as well as in the hardware technology industry.To a certain extent,the higher total value of Chinese u
49、nicorns is influenced by the large share of financial technology unicorns.The Innovation Ecosystem in China16Startup AccelerationIn 2020,97 new unicorns were created globally,an increase of 18.95%from last year.Of these new unicorns,67 came from the US,accounting for nearly 70%.The number of new uni
50、corns in China,Britain,the European Union,India,and other countries and regions is between 5-7,mainly focusing on e-commerce,financial technology,software,and services.Among the global unicorns on the list in 2019,33 companies were listed in 2020,five of which were from the health field and four wer
51、e from the e-commerce field.The concentrated listing of big health unicorns and e-commerce unicorns in 2020 reflects the accelerated effect of the pandemic on these two markets.The Innovation Ecosystem in China17Startup AccelerationThe Innovation Ecosystem in China18Use Case:Plug and Play China x Au
52、toX After Plug and Play China invested in AutoX,the company was introduced to many mainstream automobile companies in the innovation ecosystem as partners.Ever since then,the company has grown and become a unicorn.AutoX was selected for Plug and Plays mobile travel acceleration camp in 2017.There,it
53、 was introduced to FAW,Daimler,Shanghai Automobile City,SAIC,Wuxi City Government,Nanjing Development Zone,and many other international companies and local entities supporting AutoXS development in China.City InnovationPlug and Play Chinas Institute of Innovation Ecosystem has sorted out the common
54、challenges of the worlds most innovative cities.These include the development of startup companies,patent application of professional technologies,support from equity investments,and the attraction of scientific and technological innovation talent.Engels once said,Once there is a technical need in s
55、ociety,this need will push science forward better than ten universities.For the development of regional economies and technology,finding and solving problems based on market demand is to deal with the actual problems from a more timely and profound perspective.Nowadays,its a prevalent pattern that u
56、rban innovations are driven by central cities.Such a pattern is clearly demonstrated,for example,by the coordinated development of Beijing-Tianjin-Hebei,the development of the Yangtze River Economic Belt,the construction of the Guangdong-Hong Kong-Macao Greater Bay Area,and the integrated developmen
57、t of the Yangtze River Delta.The Innovation Ecosystem in China19City InnovationThe key comparative advantages shape a new innovative geographical pattern and urban innovation ecosystem.The 14th Five-Year Plan also proposes to focus on areas with advantages in economic development,such as central cit
58、ies and urban agglomerations,to enhance the carrying capacity of the economy and population and promote the overall improvement of national economic efficiency.”Use Case:Plug and Play China x Wuhan x Dongfeng Motor Group On June 30,2020,Plug and Play China and Dongfeng Group funded a joint venture c
59、ompany in the Wuhan Economic Development Zone.Focusing on technological innovation in the automobile industry and targeting the megatrend of mobile travel,the venture links regional advantageous industries such as new energy,smart manufacturing,biomedicine,supply chain,and logistics and promotes cro
60、ss-industry innovation.Plug and Play China and Dongfeng Group aim to unlock the full potential of regional linkage,promote the coordinated development of the province,and build an international smart city ecosystem.”The Innovation Ecosystem in China20City InnovationCase Highlight Plug and Play China
61、,Dongfeng Group,and Wuhan Economic Development Zone jointly explore the regional collaborative innovation model of Industry+City+Technology.Together,they bring global innovation resources to build an international open platform to accelerate science and technology innovation.The platform allows the
62、advancements of the automobile industry to positively influence other major industries in the Wuhan Economic Development Zone,supporting Wuhan to become a scientific innovation center and a high-tech industrialization center in central China.The Innovation Ecosystem in China2122PNPCHINA.COMPlug and
63、Play is a global corporate innovation platform that helps to connect corporate partners to startups in order to help solve their greatest challenges.We also operate as a venture fund and startup ecosystem.To date,we have helped over 5,000 early-to-growth stage startups raise over$12 billion.Plug and
64、 Play is consistently ranked among the most active VCs in Silicon Valley.PNPTC.COMContributors Advisors Institute of Innovation Ecosystem Mentor Advisory Committee of Plug and Play China Core Team Yolanda Lyu(Institute of Innovation Ecosystems Research of Plug and Play China)Han Zhang(Plug and Play
65、China City Innovation Team)Carrie Cheng(Plug and Play China Insurance Technology Team)Starry Ji(Plug and Play China Mobile Travel Team)Garnett Ge(Plug and Play China Team Cross-Border Business Team)Rebecca Wu(Institute of Innovation Ecosystems Research of Plug and Play China)Henry Liang(Plug and Pla
66、y China Finical Technology Team)Qin Huang(Plug and Play China Brand and Market Department)Valerie Yan(Plug and Play China Mobile Travel Team)Runyu He(University of California,Los Angeles)Haodong Yang(Johns Hopkins University)Pascual Cortes-Monroy(Schwarzman College)Guangran Li(University of Michigan
67、,Ann Arbor)2021 Plug and Play China.All rights reserved.The materials contained in this publication were assembled in June 2021 and were based on the information available at that time.You may refer to any part of this white paper or recommend it to others.However,if you reprint,extract,or publish a
68、ny content in this document,you must obtain the written consent of Plug and Play China and reference the document accordingly.This white paper on the innovation ecosystem shall not be used for commercial purposes except when obtaining previous written consent of Plug and Play China.This White Paper
69、on the Innovation Ecosystem may contain policies,data,technical analysis,market trends,company information and other content that can be acquired through public channels.Plug and play China is not legally responsible for the authenticity,accuracy,and integrity of this document contents,and does not
70、aim to provide guidance on the information contained within.This document may also contain expectations on the market,technology,policy and other development trends,however,Plug and Play China will not be liable for the accuracy of such expectations.If any of the content in the document infringes upon your intellectual property rights,please contact Plug and Play China immediately.