In the summer time of 1987, Ren Zhengfei, who was 43 years outdated at the moment, based a small firm named “Huawei” in an deserted manufacturing facility constructing in Shenzhen Bay. Back then, Shenzhen was only a gathering place for folks from throughout the nation who got here to “venture into business”. Many folks opened small factories right here to provide digital parts, taking up out of date international manufacturing capacities.
However, 38 years have handed. Now, Shenzhen has 1,333 national-level specialised, refined, distinctive, and modern “little giants” enterprises, surpassing Beijing (1,210) and Shanghai (1,032) to rank first amongst all cities in China. This additionally marks that Shenzhen has formally change into China’s “City of Specialized, Refined, Distinctive, and Innovative Enterprises”!
Recently, the record of the seventh batch of national-level specialised, refined, distinctive, and modern “little giants” enterprises was publicly introduced. Shenzhen ranked first amongst all cities in China with 347 newly chosen enterprises. The growth of know-how shouldn’t be a water with no supply or a tree with out roots. Where did Shenzhen’s “water and wood” come from?
No basis, however stuffed with braveness
Actually, in the Nineteen Eighties, Shenzhen was nonetheless a “scientific and technological desert”. It is alleged that there have been solely two scientific and technological personnel in the entire metropolis: a tractor repairman and a veterinarian.
Compared with the United States, which has Harvard and MIT, and Beijing and Shanghai, which have prestigious universities like Tsinghua, Peking, Fudan, and Jiaotong, Shenzhen had virtually zero increased schooling sources.
The turning level got here in 1987 when Shenzhen issued Document No. 18, which inspired scientific and technological personnel to determine personal high-tech enterprises and clearly outlined property rights.
Document No. 18 issued by Shenzhen in 1987
This had a powerful influence in China at the moment. Most scientific analysis professors had been used to educating in universities. Even if that they had any achievements, they might simply submit a paper and contribute it to the nation. It was very troublesome to commercialize their achievements.
What about beginning a enterprise on their very own? First, they had been afraid that universities and their employers wouldn’t settle for it. Second, they had been afraid of being criticized by public opinion at the moment. Third, they had been afraid that their achievements could be copied shortly.
However, this “birth permit” from Shenzhen abruptly broadened the horizons and gave hope to many senior intellectuals. In the first 12 months after the coverage was launched, greater than 70 personal high-tech enterprises had been born, together with the now well-known Huawei. It may be stated that with out the clear definition of property rights in Document No. 18 and the incapacity of scientific and technological personnel to carry shares with their applied sciences, Huawei couldn’t have been established.
In 2000, Shenzhen encountered one other essential node. At that point, counterfeit merchandise had been prevalent in China, and most of them had been simply “shams”. Public opinion usually believed that China was a producing powerhouse and solely wanted to repeat international fashions. Facing such a growth bottleneck, Shenzhen determined to pursue unbiased innovation. It was the first to name for “building an independent innovation city” and targeted on supporting the R & D funds of a lot of main high-tech enterprises.
This format was greater than a decade forward of most cities in China, laying the basis for enterprises like Huawei and BYD to problem the conventional Western market sample.
The third essential node was in 2018.
In 2018, the Ministry of Industry and Information Technology launched a cultivation plan for specialised, refined, distinctive, and modern “little giants” enterprises. The so – known as specialised, refined, distinctive, and modern “little giants” enterprises seek advice from excellent small and medium – sized enterprises with specialization, refinement, and distinctiveness traits. DeepSeek, Ubtech Robotics, and DJI drones, which have attracted public consideration lately, are all amongst the “little giants”.
Ubtech Robotics
Shenzhen has made enormous investments on this area. After the nationwide – stage cultivation plan was formally launched in 2019, Shenzhen set its sights on the aim of cultivating “little giants”.
When the record of the seventh batch of nationwide – stage specialised, refined, distinctive, and modern “little giants” enterprises was publicly introduced in 2023, 310 enterprises in Shenzhen had handed the overview. The variety of newly chosen enterprises ranked first amongst all cities in China. The cumulative variety of nationwide – stage specialised, refined, distinctive, and modern “little giants” enterprises in Shenzhen reached 752, exceeding the goal of 600 enterprises set for 2025 forward of schedule.
By 2024, the cumulative variety of nationwide – stage specialised, refined, distinctive, and modern “little giants” enterprises in Shenzhen had reached 1,025. The variety of newly chosen enterprises ranked first in China for 2 consecutive years. According to the newest knowledge, as of May 2025, Shenzhen has 11,000 specialised, refined, distinctive, and modern small and medium – sized enterprises and 21,000 modern small and medium – sized enterprises.
From surpassing Ningbo in 2022 to attain the “jump from fourth to third”, to surpassing Shanghai in 2023 to attain the “jump from third to second”, then narrowing the hole with Beijing to solely 10 enterprises in 2024, and lastly efficiently overtaking Beijing in 2025.
How did Shenzhen handle to overhaul one metropolis after one other yearly?
Break by way of traditions with the energy of the market
As an emblem of China’s reform and opening – up, Shenzhen could not have the most scientific analysis universities or institutional assume – tanks in China, however it’s the most fascinating place for scientific and technological abilities and scientific analysis universities. Different from Silicon Valley, Beijing, and Shanghai, which depend on know-how switch from universities, enterprise innovation in Shenzhen is extra pushed by market demand.
In Shenzhen, innovation doesn’t occur in the ivory tower however at the entrance – line of manufacturing and the market. Where there’s a want, innovation happens. Where there’s a ache level, options are sought instantly.
Ma Huateng, when trying again on Tencent’s entrepreneurial historical past, stated: “Looking back on many innovation points, we didn’t set up an innovation department… Innovation opportunities usually come from the process of serving users quickly. When we find that users complain or are dissatisfied with something, that may be an opportunity for innovation.”
Simply put, Tencent’s innovation comes from consumer suggestions somewhat than plans or analysis laboratories. The outcomes of this market – pushed innovation mannequin are outstanding.
Tencent was based in Shenzhen. It solely took Ma Huateng somewhat over a decade to develop WeChat, which now impacts 1.4 billion Chinese folks, from chatting with customers as a pretend feminine netizen. Along with Tencent’s development, there are additionally many “little giants” enterprises with world competitiveness in area of interest markets.
In 2024, the variety of nationwide – stage excessive – tech enterprises in Shenzhen exceeded 25,000, with a mean of 12 enterprises per sq. kilometer, rating first in China by way of density. These enterprises might not be nicely – recognized to the public, however they grasp key core applied sciences of their respective fields. For instance, Inovance Technology, which makes engines for Xiaomi, gives the core energy for Xiaomi to repeatedly break information on the Nürburgring circuit.
Another instance is JPT Opto – Electronics, which focuses on lasers, laser, and optical clever gear. The cargo quantity of its MOPA pulsed fiber lasers has exceeded that of its American and British counterparts, rating first in the world. It accounts for greater than 70% of the home market share and has remained the world gross sales champion for a few years.
There can also be Guangyue Technology, which was the first enterprise to attain mass manufacturing in varied area of interest markets of excessive – energy optical gadgets. In 2008, it established the first excessive – energy optical isolator manufacturing line in China. In 2021, it efficiently developed a collection of 10,000 – watt power – transmitting optical cables, reaching the world – main stage. Its associated merchandise have participated in tasks such as the “Mozi” quantum communication satellite tv for pc, the Beijing – Shanghai Trunk Line quantum communication mission, and even the Tiangong Space Station mission.
Although these “little giants” aren’t giant in scale, they’re like “single – event champions” of their area of interest markets.
One statistic exhibits that the common R & D depth of Shenzhen’s “little giants” enterprises reaches 7.63%, and the common annual R & D expenditure is 33.3919 million yuan, increased than the common stage of nationwide – stage specialised, refined, distinctive, and modern “little giants” enterprises.
In addition, the sixth batch of Shenzhen’s “little giants” enterprises utilized for a mean of 152 patents and almost 6.5 PCT patents, considerably increased than the nationwide common of 1.7 patents per enterprise. Nearly 30% of those enterprises have led or participated in formulating worldwide and nationwide requirements.
The “Global Urban Industrial Innovation Index Report” launched by the analysis staff of Professor Chen Xian from the Shenzhen Industry Research Institute of Shanghai Jiao Tong University exhibits that Shenzhen ranked first in the complete analysis of the 4 dimensions of business innovation surroundings, enter, output, and efficiency, increased than cities such as San Francisco, Beijing, and London.
Shenzhen ranks first in the city industrial innovation index rating
Who says that R & D should depend on century – outdated scientific analysis establishments? In Shenzhen, enterprises are the greatest universities, and the market is the greatest professor.
Be a “nanny” somewhat than a “baton”
Of course, it does not sound like a scientific story in that case many modern achievements may be made simply by leaving every thing to the market.
After all, the seeds of innovation want an appropriate surroundings. The Shenzhen authorities has a “secret recipe” for creating this surroundings.
The Shenzhen authorities realized early on that it can’t exchange enterprises in innovation, however it could actually create surroundings for innovation. Different from the innovation mannequin strongly led by the Singaporean authorities, the Shenzhen authorities prefers to be a “nanny” for modern enterprises somewhat than a “baton”.
What has this “nanny” achieved?
First, it has opened up utility eventualities. We all know that Shenzhen is the “City of Low – Altitude Economy”. Although many cities have drone know-how, Shenzhen was the first to open up flight eventualities and plan related routes.
In 2018, when drone formation exhibits had been nonetheless a novelty, the Shenzhen authorities took the lead in opening up a take a look at airspace in Talent Park. After the low – altitude financial system was written into the authorities work report in 2022, 20 utility eventualities had been accelerated for implementation.
Facing the newest scientific and technological achievements in the market, Shenzhen regards the entire metropolis as a take a look at area and tries to open up as many take a look at eventualities as attainable. This method has achieved outstanding outcomes.
In addition to drones, the new power automobile business, which is now a number one business, additionally has the assist of Shenzhen.
Since 2003, at each essential turning level in BYD’s transformation, the Shenzhen authorities has offered sturdy assist to the enterprise, together with constructing a lot of charging piles and supporting the procurement of BYD electrical automobiles. Now, the electrification charge of buses, taxis, and on-line automobile – hailing companies in Shenzhen has reached 100%, rating first in China by way of public transportation electrification.
Facing some rising applied sciences, Shenzhen additionally has its personal methodology. Other cities primarily depend on subsidies and grants to domesticate new productive forces, whereas Shenzhen’s state – owned belongings focus extra on market – oriented operations.
Through 4 main fairness funding platforms: Shenzhen Capital Group, Shenzhen Investment Holdings, Shenzhen State – owned Capital Operation Group Co., Ltd., and Shenzhen Kunpeng Equity Investment Management Co., Ltd., they assist the growth of modern enterprises as “long – term capital” and “patient capital”.
According to statistics, amongst the first 4 batches of nationwide – stage specialised, refined, distinctive, and modern “little giants” enterprises, Shenzhen Capital Group has invested in 198 enterprises, and Shenzhen High – tech Investment Group underneath Shenzhen Investment Holdings has invested in 46 enterprises.
What are the traits of their investments? They do not make investments solely after seeing the outcomes however make investments at the stage when enterprises want funds most. Ni Zewang, the former chairman of Shenzhen Capital Group, revealed that amongst the enterprises invested by Shenzhen Capital Group, 26% are in the startup stage, 57% are in the development stage, and solely 17% are in the mature stage.
This early – stage intervention has considerably elevated the survival chance of modern enterprises.
Shenzhen’s state – owned belongings additionally deal with creating bodily house for modern enterprises. Take the Shenzhen Bay Science and Technology Park in Nanshan District, Shenzhen as an instance. After greater than 10 years of operation by Shenzhen Investment Holdings, the park has gathered 191 specialised, refined, distinctive, and modern small and medium – sized enterprises at the municipal stage in Nanshan District, accounting for almost 20% of the complete in the district.
In the Shenzhen Bay Science and Technology Ecological Park, greater than 100 AI startup enterprises have gathered, which is popularly recognized as the “Model Power Camp”. This is the first giant – mannequin AI ecological group in the Guangdong – Hong Kong – Macao Greater Bay Area. Its screening standards don’t take into account income or set a manufacturing worth threshold, however solely deal with know-how and potential. By offering places of work and take a look at fields, Shenzhen’s nanny – type insurance policies have offered wealthy eventualities for the development of “little giants” enterprises.
In phrases of economic assist, Shenzhen additionally gives a most reward of 500,000 yuan to enterprises acknowledged as nationwide – stage specialised, refined, distinctive, and modern “little giants” and a most reward of 100,000 yuan to municipal – stage specialised, refined, distinctive, and modern small and medium – sized enterprises.
These reward funds are allotted in a “no – application – required” method. Enterprises don’t want to use. Once they’re acknowledged and the monetary funds are in place, the funds can be allotted instantly. Simply put: as lengthy as you dare to innovate, I dare to provide you cash. There isn’t any requirement for speedy outcomes, and errors are allowed.
In such an surroundings, Shenzhen now has the highest entrepreneurship density in China. Small, medium, and micro – enterprises account for greater than 90% of all enterprises. These enterprises contribute greater than 70% of the approved invention patents in the metropolis, nurture greater than 80% of the nationwide – stage excessive – tech enterprises, and account for greater than 90% of the R & D funding, offering the most fertile soil for the emergence of specialised, refined, distinctive, and modern “little giants”.
Behind Shenzhen’s title of “City of Specialized, Refined, Distinctive, and Innovative Enterprises”, it isn’t only a lead in amount but additionally a lead in logic.
Shenzhen’s 45 – 12 months observe has proved that innovation doesn’t essentially depend on well-known universities for scientific analysis or subsidy dividends. As lengthy as you dare to provide the market freedom, belief to enterprises, and time to innovation, each metropolis in China can nurture its personal “little giants”.
This article is from the WeChat official account “Zhengjieju”. Author: Zhengjieju. Republished by 36Kr with permission.