Yes, summer break has finally arrived! In fact we have been enjoying the break for a week already, but it takes (or it took me) a few days to slow down and shift gears. Now, far away from Lausanne, I spend my days reconnecting with family, reading books, sleeping and … reflecting. Yes, summertime is a well-known IMD MBA reflection time too.
It is seven days since we came back from the discovery expedition and I sit down to think through what this experience means to me, what I have seen. But do not worry – my colleagues described the highlights so well already that I will not repeat it all over again! Instead, let me share few observations with you.
Key success factors. Silicon Valley, Shenzhen, Dublin – all three seem to be very different, yet I think there is a common foundation of their success – each location created its own, very favourable environment for innovation and the growth of the tech industry.
- Silicon Valley profits from the availability of talent from top technical universities (Stanford, Berkeley, UCLA) along with a legal framework that does not allow anti-competitive clauses.
- In Shenzhen, the friendly and supportive (also financially) local government created liberal conditions for tech investment.
- Finally, Dublin benefits from the stable and long-term investment policy of the central government that keeps low and stable corporate taxation along with free technical education to encourage the flow of FDI into Ireland.
None of the tech hubs was born overnight. It took years to reach the current state of development, but their examples show how powerful and difficult to copy a solid, long-term strategy and development could be.
Key ‘failure’ factors. Interestingly, all three hubs are plagued with the same challenge – rapidly raising real estate prices and living costs. With costs of living comparable to the most expensive financial centres of the world, not only locals, but also incoming tech talents find it challenging to finance a decent living standard – a situation that can become a key threat to further growth if it is not resolved in time.
Culture and mindset. Thinking about differences among the tech hubs, culture and mindset came to my mind as the biggest, single difference among them, especially between Silicon Valley and Shenzhen. I am European – born and raised in the Western culture, I have seen and heard the Silicon Valley mantras of taking risks, trying things and failing fast, being ready for the next challenge. And these concepts equally apply to Shenzhen. What I found different, however, is the approach towards sharing ideas and taking real life application to the next level.
What I saw in the U.S. are people who speak about their ideas as loudly as possible, trying to validate their thinking before investing much time and effort into development. Having talked with entrepreneurs in China, I think the things work differently there – you keep your head low, work hard and fast to develop your idea, hoping to get ahead of the fierce competition that will put an enormous pressure on you the second you start getting attention. Limited IP protection and the general readiness to immediately copycat solutions can, at least partially, explain the different approach in China.
On the other hand, Chinese entrepreneurs are willing to, and can, put their ideas into action much faster and deeper than their colleagues in the West, especially in heavily regulated areas such as e.g. healthcare. Let’s take as an example the AI-supported decision tools that in the West are mainly in the testing stage. In China they are already applied across multiple large hospitals, allowing for collection of real world data and further development and adjustments of the solutions at a pace that more conservative legal frameworks of the West do not allow for.
The race to become the next technological leader of the world has already begun. Who will be the next leader? Or perhaps we will not have a clear leader anymore? I do not know the answer, yet I strongly believe that cultural and legal aspects will play a significant role in the game with East and West having its strengths and its weaknesses when it comes to technological advancement.
Luckily, I have a few more days of the summer break to reflect further on it before the next marathon starts…