US and China are top innovation hubs, followed by India and UK

US and China are top innovation hubs, followed by India and UK

Technology has permeated all industries, which means there has been an unprecedented rise in technology innovation and the ecosystems surrounding it. A new report on global technology innovation hubs finds that the US and China continue to be the most promising markets for technology breakthroughs that have global impact, with India and the UK progressing in third and fourth place with innovative tech hubs of their own.

This is the finding of part one of the KPMG 2017 Global Technology Innovation report on the changing landscape of disruptive technologies, with perspectives on technology innovation trends, barriers to commercialize innovation, and insights into technology innovation leading practices. It captures the findings of a September – November 2016 survey of 841 business executives globally (including 168 US) from companies, venture capital firms, and angel investors that focus technology.

It states that the success of Silicon Valley’s entrepreneurial culture continues to incentivize countries all over the world to become leading technology innovation hubs. While some are succeeding in achieving their own objectives towards this, others continue to face macroeconomic and infrastructure challenges.

As tech innovations unfold, China is stacking up to the US as a leading force as the world’s most dominant tech epicentres. The strong showing for these two mega-powers is relatively consistent with earlier KPMG surveys, although this year’s survey reflects a slight uptick for China – 25 percent compared with 23 percent the year before. China continues to make rapid gains as the country moves from manufacturing to an innovation powerhouse led by its large mobile and digitally advanced consumer and enterprise base.

The results also show a small decline for the US – 26 percent forecast it as having the most potential for leading edge advances, down from 29 percent a year ago. KPMG says that this does not reflect a declining status for the US, but rather the expansion of innovation across several other geographies.

Accordingly, India and the UK are seen by respondents in the survey as progressing with tech hubs of their own, showing progress in the development of products and services that can break through in developed and emerging markets.

India is placed third globally for the second year in a row, with 11 percent forecasting it to have most promise for disruptive breakthroughs. India’s mobile-first generation and its reliance on local business models are helping India to progress. The report says India is home to nine startups valued at more than $1 billion. More and more startups are targeting the domestic Indian market as businesses shift from serving global markets with outsourcing.

The UK jumped significantly in the global rankings, up to 10 percent from the previous year’s four percent. Government initiatives such as Innovate UK are focused on driving and accelerating innovation by investing in small high-growth companies in key market sectors and providing access to cutting edge technologies.

The report does state that the survey results skew by regional responses, showing some nationalistic bias.

“What we have seen emerge over time is the result of countries and cities striving to replicate and build on the Silicon Valley tech innovation blueprint, and their increasing degree of success,” said Tim Zanni, global and US chair for the KPMG technology, media and telecommunications practice. “One can debate whether or not replicating Silicon Valley is possible, but the benefits of the effort are undeniable.”

Leading cities Given their country ranking, it’s not surprising that cities in the US and China are expected to make up six of the top 10 innovation hubs, outside of Silicon Valley/San Francisco, over the next four years. Asked which three cities will emerge to rival Silicon Valley/San Francisco over the next four years, the survey revealed numerous rising hubs, as Berlin, Washington, D.C., Chicago and Boston joined the top 10:

Innovation no longer just in R&D What’s fueling the spread of technology innovation development? According to Zanni in KPMG’s report: growing ecosystems, as tech innovation has spread across all industries.

Tech industry business leaders are also seeing technology innovation development spread within companies. Respondents said innovation has expanded beyond traditional corporate R&D. In this year’s survey, more respondents said that organizations emphasize and nurture innovation at the strategic planning stage than any other company functions, including IT and R&D.

Strategic planning, business units, think tank/incubator, IT and the innovation committee all were listed ahead of research and development as places where innovation is spotted and nurtured in companies. While the US findings were similar with the exception of “corporate development” in the top three, China respondents listed the IT and R&D organizations as the top two.

“These findings confirm what we’ve been hearing from our clients and seeing in the market — that innovation is a strategic business imperative for many organizations,” said Zanni.

Innovation visionaries Respondents were also asked to name the top global technology innovation visionary. Tesla and SpaceX CEO Elon Musk topped the list, with Apple CEO Tim Cook second, followed by Alibaba Chairman Jack Ma, Alphabet CEO Larry Page and Google CEO Sundar Pichai who tied for third. Microsoft CEO Satya Nadella stood alone in the 6th spot, with Bill Gates and Facebook CEO Mark Zuckerberg tied for 7th, followed by Amazon CEO Jeff Bezos 9th.

The report, with tech innovation country perspectives on 15 countries can be downloaded here.

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