Close to half (43%) of technology industry executives expect another city to supplant Silicon Valley as the world's technology innovation hub in the next four years – and Shanghai is considered the most likely candidate.
An annual survey of industry leaders from KPMG found that 26% of respondents selected Shanghai as the city to rival Silicon Valley as a top innovation hub, the highest among all cities. Beijing was also included among the top five - in fourth position behind New York and Tokyo.
The survey also found that China now nearly rivals the US as the nation considered to show the most promise for disruptive technology breakthroughs likely to have a global impact.
China was nominated by 25% of respondents, up from 23% last year, whereas the US saw a decline to 26% from 29%.
The report states that China's rapid transformation from an investment-intensive, export led growth model to one driven by consumption has positioned the country at the forefront of innovation.
Chinese companies are capturing new business opportunities through disruptive technologies including cloud computing, the internet of things (IoT), smart industrial robotics, data and analytics as well as enhanced automation.
KPMG research shows that Chinese CEOs nominate new product development, increasing analytics capabilities, the IoT, machine-to-machine technology and the industrial internet as their top five investment priorities for the next three years.
China is also leading in the FinTech sector, and the top 50 leading FinTech companies are accelerating China's reform in the financial sector. The Chinese government has meanwhile identified innovation as one of the top priorities of the nation's 13th Five Year Plan.
“China’s economic transformation is spurring the creation of new drivers of growth, new industries, new institutions and new opportunities in the technology and innovation space,” KPMG China head of clients and innovation Egidio Zarrella commented.
“Shanghai is ranked first overall in the survey as a future tech leader with its strong regional leadership in financial markets and numerous high-tech parks in Pudong.”
He said Hong Kong also has an important role to play in China's innovation development, noting that the city's ecosystem “ continues to evolve in terms of becoming a hub for entrepreneurs in the IoT space.”