Source | Zero One Finance.
This year, we are collaborating with relevant departments to focus on creating a metaverse super scene.
According to Dongfang Net, Wu Jincheng, Director of the Shanghai Municipal Commission of Economy and Information Technology, stated on April 12 on the "2023 Shanghai Livelihood Interview" program that Shanghai will focus on building metaverse super scenes such as the Metaverse Smart Hospital, Qiantan Dongti Metaverse, and Zhangjiang Digital Twin Future City.
Wu Jincheng said that the new generation of artificial intelligence will bring greater room for imagination. For example, the combination of artificial intelligence and metaverse digital humans. In the social field, intelligent virtual digital humans can provide users with more interesting and interactive personalized services by learning user corpus; The field of education and training can provide personalized learning plans and guidance for students; The medical field can provide online consultation and diagnostic services for patients, solving the problem of insufficient medical resources.
Nowadays, the digital economy is developing rapidly and has become a new engine for regional economic development. Data shows that as of 2021, the digital economy of 16 provinces in China has exceeded one trillion yuan, and the proportion of digital economy to GDP in Shanghai and other places has exceeded 50%.
For Shanghai, the other side of leading the digital industry is policy orientation.
Shanghai Accelerates Running: Comprehensive Policy Support.
In terms of policy support for the digital economy, Shanghai has always been particularly "awesome".
As a national financial center, Shanghai has taken the lead in proposing to comprehensively promote urban digital transformation and build an international digital capital. The "14th Five Year Plan" for the development of Shanghai's digital economy proposes that by the end of 2025, the level of digital economy development in Shanghai will remain at the forefront of the country, and the added value will strive to reach 3 trillion yuan, accounting for more than 60% of the city's GDP.
In terms of metaverse policies, according to the "Summary of China's Metaverse Industry Policies (March 2023 Edition)" released by the Zero One Think Tank, as of the end of March 2023, 18 provincial-level units and 24 municipal level units in China have issued about 114 clear policies to support the metaverse industry. Among them, Shanghai has provided comprehensive and close support in terms of policies, not only being introduced early, but also having the highest number of policies, reaching 16.
As early as the end of 2021, Shanghai proposed to strengthen the forward-looking research and development of the underlying core technology capabilities of the metaverse. In June 2022, the Shanghai Municipal Bureau of Communications and the Science and Technology Commission respectively issued two support policies to encourage the integration of computing resources and the metaverse. They also provided financial support of no more than 2 million yuan for metaverse projects within the scope of high-tech project applications.
At the end of June 2022, the Shanghai Action Plan for Cultivating a New Track of "Metaverse" (2022-2025) was released, which is the first provincial-level metaverse special action plan issued in China. In October, Shanghai also issued a special policy on high-end manufacturing, proposing to "study and continuously expand the scale of industrial transformation and upgrading investment funds, and promote the establishment of market-oriented metaverse and urban digital transformation funds.".
In terms of regional layout, Hongkou District and Xuhui District have taken the lead in proposing strategic plans for the metaverse. Among them, Hongkou District has released the "Metaverse Industry Development Action Plan", which aims to create a demonstration zone for the development and application of the metaverse in the North Bund and build a new highland for the development of Shanghai's digital economy.
What does Shanghai rely on to build an "international digital capital"?.
The China Digital Economy Development Index Report (2022) shows that among the top 50 cities in China's GDP ranking in 2021, Shanghai has significant advantages in digital industrialization.
Firstly, from 2013 to 2021, the growth rate of the number of computer software and hardware enterprises in Shanghai was significantly faster than that of the China Digital Economy Development Index, with the former being 5.72 percentage points higher than the latter. Secondly, the growth in the number of computer software and hardware enterprises in Shanghai is more stable, which can also provide a stable foundation for the development of Shanghai's digital economy and the creation of the "International Digital Capital".
Figure 1: The Development Index of China's Digital Economy and the Number of Computer Software and Hardware Enterprises in Shanghai from 2013 to 2021.
Data source: Zero One Think Tank.
Next, we will compare Shanghai among 50 major cities and take a detailed look at its advantages.
01
Number of computer software and hardware enterprises: the largest.
Computer software and hardware are the foundation of enterprise informatization, digitization, and digitization. The number of computer software and hardware enterprises can to some extent reflect the momentum of a city's development of the digital economy. We have counted the number of computer software and hardware enterprises in 50 major cities and ranked them. The top 5 cities are Shanghai, Beijing, Shenzhen, Guangzhou, and Chengdu.
From specific figures, Shanghai had 813000 computer software and hardware enterprises and 21 domestic computer CPU production and related enterprises in 2021. Representative computer software and hardware enterprises in Shanghai include Xinyuan Group, Anji Technology, Canrui Technology, and Gaolun Electronics.
Figure 2: Top 20 Chinese urban computer software and hardware enterprises in 2021.
Data source: Zero One Think Tank.
Shanghai has attracted the most computer software and hardware enterprises to settle in, which we believe are mainly due to the following reasons:.
Firstly, policies support software and hardware enterprises. As early as 2012, Shanghai issued the "Several Policies on Further Encouraging the Development of Software Industry and Integrated Circuit Industry in the City". In 2017, Shanghai continued to issue the "Several Policies on Further Encouraging the Development of Software Industry and Integrated Circuit Industry in the City", proposing to "make the software industry and integrated circuit industry the core areas of Shanghai's globally influential technology innovation center construction and strategic emerging industry development".
In January 2022, Shanghai once again issued the "Several Policies to Promote the High Quality Development of Shanghai's Integrated Circuit Industry and Software Industry in the New Era", proposing that "for major projects such as EDA, basic software, industrial software, and information security software, the increase in project investment can be relaxed to no less than 50 million yuan, with a support ratio of 30% of the increase in project investment.".
Moreover, Shanghai implements tax preferential policies for dual software enterprises ("software enterprise recognition" and "software product registration"). "After being recognized, newly established software production enterprises in China are exempt from corporate income tax in the first and second years from the year of profit, and are subject to a 50% reduction in corporate income tax from the third to fifth years.".
Secondly, the "City of Innovation". Shanghai not only has strong technological innovation capabilities, but also has innovative thinking and awareness deeply rooted in the city's bloodline. In 2021, Shanghai has a high enthusiasm for innovation, with an average of 32.2 patent authorizations per person. Shanghai is not lacking in innovation determination, nor is it lacking in innovation resources.
Shanghai is continuously enhancing the cohesion of domestic and international innovation resources and accelerating the construction of the Yangtze River Delta National Technology Innovation Center. The number of high-tech enterprises in Shanghai has increased from 4311 in 2012 to over 20000 in 2021, an increase of 3.6 times over the past nine years; There are over 500 types of entrepreneurship and entrepreneurship carriers, including 189 technology enterprise incubators, 170 maker spaces, and 15 university science parks; We have introduced 771 regional headquarters of multinational corporations and 481 foreign-funded research and development centers, ranking first in the country in terms of quantity.
02
Number of emerging digital technology enterprises: ranked first.
The digital economy is a product of the deep integration of emerging digital technologies such as artificial intelligence, blockchain, cloud computing, big data, and the Internet of Things with the economy. Digital technology is the key to the development of the digital economy, and the number of emerging digital technology enterprises in a city can largely reflect its confidence in the development of the digital economy.
The top 5 cities in 2021 for the number of emerging digital technology enterprises in 50 major cities are Shanghai, Chongqing, Beijing, Tianjin, and Dongguan.
Figure 3: Top 20 emerging digital technology enterprises in Chinese cities in 2021.
Data source: Zero One Think Tank.
According to data, Shanghai had 37000 emerging digital technology enterprises in 2021, accounting for approximately 38% of the 50 cities. Shanghai has so many emerging digital technology enterprises, and we have found several reasons:.
Firstly, cultivate and strengthen emerging industry clusters. As early as 2012, Shanghai issued the "12th Five Year Plan" for the development of strategic emerging industries in Shanghai. In June 2021, Shanghai issued the "14th Five Year Plan for the Development of Strategic Emerging Industries and Leading Industries in Shanghai", which proposed that "by 2025, technological innovation capabilities will significantly improve, key technology breakthroughs will be made, the level of industrial foundation upgrading and industrial chain modernization will be significantly improved, strategic emerging industries will become the new pillar of the modern industrial system, and a number of forward-looking leading industries will be planned and laid out.".
At the end of January 2023, Shanghai issued the Action Plan for Boosting Confidence, Expanding Demand, Stabilizing Growth, and Promoting Development. The plan once again mentions "accelerating the cultivation and growth of emerging industrial clusters. Accelerating the development of the three major industries of integrated circuits, biopharmaceuticals, and artificial intelligence. Implementing new tracks such as digital economy, green and low-carbon, metaverse, and intelligent terminals, as well as five future industrial clusters including future health, future intelligence, future energy, future space, and future materials.".
Secondly, building nests to attract phoenixes. Industrial parks have economies of scale, talent spillover effects, and knowledge aggregation effects, which are of great significance for digital technology innovation. Shanghai has put in a lot of effort around the digital technology industrial park. Among the 50 major cities, Shanghai ranks first in the number of digital technology industrial parks. Specifically, in 2021, Shanghai has 26 digital technology industrial parks, including metaverse, 5G, artificial intelligence, cloud computing, blockchain, big data, Internet of Things, AR/VR, and network security, which is 2 more than the second ranked Hangzhou.
Figure 4: Top 20 urban digital technology industrial parks in China in 2021.
Data source: Zero One Think Tank.
03
The number of "little giants" in the information industry is second only to Beijing.
The information industry is a crucial foundational industry for high-quality economic and social development, as well as digital transformation. It is one of the six high-end industrial clusters that Shanghai is striving to build. We have counted the number of specialized, refined, and innovative information industry "little giant" enterprises in 50 major cities (the first to fourth batches, the fifth batch has been launched but not yet announced) and ranked them. The top five cities are Beijing, Shanghai, Shenzhen, Ningbo, and Chongqing.
Figure 5: Top 20 Small Giant Enterprises in China's Urban Information Industry (First Four Batches).
Data source: Zero One Think Tank.
From specific data, Shanghai has 507 small giants in the information industry, second only to Beijing in terms of quantity. Representative "little giants" in the information industry include Aojie Technology, Fuhanwei, Nanlin Electronics, Kaisai Biology, and others. These companies are clustered in Shanghai, and we believe there are several main reasons for this:.
Firstly, focus on the field of electronic information. At the end of December 2021, the Shanghai Municipal Commission of Economy and Information Technology issued the "14th Five Year Plan" for the development of the electronic information industry in Shanghai, proposing to "promote the integration and linkage of electronic information manufacturing, software and information services, enhance the full chain aggregation and development capacity of the electronic information industry from hardware to software and information services, and build a highland for the development of the electronic information industry.".
Secondly, there is sufficient human resources. According to data from the Shanghai Municipal Bureau of Statistics, from 2017 to 2021, the scale of urban employment in the information industry in Shanghai continued to grow, from 307300 people in 2017 to 506900 people in 2021, an increase of about 65% over four years. In 2021, Shanghai has 83 universities and 55 majors that cultivate digital talents. According to data from the Shanghai Economic and Information Commission, Shanghai has about 33% of artificial intelligence talents, 52% of 5G talents, and 40% of integrated circuit talents nationwide. Shanghai also has a strong attraction for fresh graduates, and has been showing a net inflow of graduates over the years.
Thirdly, the development environment is superior. Shanghai is located at the mouth of the Yangtze River and is a leading city in the Yangtze River Economic Belt. Shanghai has a complete industrial cluster, technological foundation, technological advantages, and factor resources, and is one of the economic center cities in China.
In addition, the ecological environment quality in Shanghai has continued to improve, and various ecological environment protection goals and tasks for 2022 have been fully completed. The central government's assessment of the effectiveness of Shanghai's 2021 pollution prevention and control battle was excellent, ranking second in the country. In January 2023, the excellent rate of Shanghai's air quality AQI (Air Quality Index) was 90.3%, overall better than Beijing.
Overall, in the previous round of regional competition, Shanghai missed out on platform companies like BATJ.
But now, Shanghai is targeting the underlying technologies and key enterprises of the digital economy, firmly grasping the foundation of digital economic development, unleashing its full potential and fighting back. Combined with its unique international perspective and favorable location advantages, we have reason to believe that Shanghai is expected to become an "international digital capital". For digital talents who are about to graduate, Shanghai may be a good geographical choice.
Reference:.
Zero One Think Tank, "Without BATJ, What Does Shanghai Rely on to Build an" International Digital Capital "?".
