With potential US-China conflict in the news seemingly every hour here, it was astounding to me in my recent three week trip to the tech community in China that America came up — not one time.
As a global entrepreneur and investor for two decades, I met with over 70 senior executives, investors, academics and creatives in Beijing, Hangzhou and Shanghai to better understand their stunning rising in tech and innovation. But in their disinterest what came home more was the magnitude of the greatest shift we in America have faced in our competitive history.
Since World War II to make it in “global technology” has meant to make it in, or sell product to, the United States. We “won” merely by showing up. Think about it. Even a few years ago the Facebook, WhatsApp, Google, Twitter, LinkedIn of almost any country was – well – Facebook, WhatsApp, Google, Twitter and LinkedIn!
For the first time we face two new realities. First, China is now a rising and comparable force across all areas of innovation. And, equally, they are focused not only on opportunities in their own market but as becoming the leading partner in similarly rapidly rising global tech markets many we too often ignore. We need a new engagement.
What’s going on?
One of the greatest and poorest understood revolutions in technology today is not the technology itself but the near universal access to it. From Jakarta to Beijing to Cairo to São Paulo, populations — often 30, 40 or 50% under the age of 30 — have access to smart devices. Each one of these “phones” has more computing power than all of NASA had in 1969 to put a man on the moon. They are now also massive consumers — over two billion new customers have appeared in the last decade transacting digitally. And they are innovators — looking to build their own enterprises serving those customers with the latest technologies at their fingertips and creating solutions to their challenges on their market’s terms.
China’s rise in this revolution is well documented. Anyone who believes it remains merely a nation copying technology from the West in a large and protected market hasn’t been there in years and does not understand its concurrent rise as innovation leaders. Chinese companies are now often equal global players in cloud computing, artificial intelligence, block chain, genomics and more. It should be a wake-up call that while over 90% of all venture capital went to Western companies a decade ago, nearly 50% last year was invested in or by China.
Similarly, smaller “China’s” in innovation have risen across places we in the West once dismissed as “third world.” In the last year, and for the first time in history, many “unicorns” — rapidly rising tech companies exceeding $1 billion in valuation — have appeared in India, Brazil, Singapore, Indonesia, Dubai, Nigeria and beyond. PricewaterhouseCoopers (PwC) recently predicted that within a couple of decades, such rising economies will be larger than the US and Europe combined.
And they all share a language Chinese innovators understand. I spent two days of my meetings in China also with 15 financial technology companies from Latin America, Africa and South East Asia brought together by Endeavor Global — a leading non-profit supporting entrepreneurs across the globe and now in the United States. These companies - focused on mobile payments, small business or consumer lending, insurance — all wrestled strikingly similar concerns. How does one navigate unpredictable regulation, challenged but improving infrastructure, educating new consumers who have never bought with a credit card and more?
Chinese innovators were and are still in their shoes. They understand their shared realities and how to not only exploit new opportunities, but leap beyond western products and services of today. To a person, the Endeavor entrepreneurs said to me: “These Chinese executives get us more than the West!” One woman from Jakarta last spring told me, “I admire America, but you guys always want to make us into you and your model. The Chinese I have worked with simply want me to be the best Indonesian company I can be on our market’s terms.”
The hard fact is that in innovation China — and the rest of the world — has and are creating options. And they are cultivating those options on their terms. We, too often, are gravitating increasingly inward or sitting on our laurels.
There is nothing inevitable here. Innovation in the United States remains one of our greatest advantages by a long shot. We remain admired for this, our know-how, our rule of law. And in the one million miles I’ve flown in the last four years to these new hubs of innovations — and for all the respect they have for China — I’m regularly asked, “Where are you guys?”
But it means we have to engage and in a new way.
In the deeply complicated debate about China, what cannot be lost is that “America First” ignores the great tech shift by turning increasingly inward. Rather we must be thinking global day one – a “new global” defined by new markets with unique needs that, for the first time, has alternatives. We must both leverage the best of what we bring in innovation and co-author solutions with new local innovators on the ground who have equal tech contribution and understand their needs much better than we.
Some in Silicon Valley tell me we may be sleep walking to a Balkanized world of innovation — us, China and others marching down separate paths. But that, also, is not inevitable. Our greatest opportunity starts with a new engagement in these shifting global realities that are enormous opportunities in and of themselves and leverage the best in what we have to offer.
Christopher M. Schroeder is a tech media entrepreneur and global venture capitalist. He wrote the best selling Startup Rising: The Entrepreneurial Revolution Remaking the Middle East. He may be followed @cmschroed.