How does Shanghai cultivate its own Starbucks, Apple, and Huawei? Beijing | Robotics | Apple

Traveling to Seattle, the first Starbucks store is a must-have for many people. This ancient coffee shop is always crowded with shoppers and nostalgic tourists from all over the world. Whether you came to Starbucks because you chose Seattle or because you chose Starbucks, different people have different answers, and some may say that this is not an either or question. A city and a company have achieved each other.

The coupling between cities and enterprises is not an isolated case. In Atlanta, many tourists buy tickets to visit the Coca Cola Museum and CNN headquarters. In Silicon Valley, even if it is not open to the public, there is still a constant stream of tourists coming near the campuses of Apple and Google, even if it is just to get closer to them. At Huawei's Songshan Lake base in Dongguan, it is said that local newcomers often choose this place as the filming location for wedding photos.

What gives a company the charm of summoning people's hearts? How can Shanghai, a city that takes the responsibility of building a "socialist modern international metropolis with global influence," cultivate its own Starbucks, Apple, and Huawei?

Measuring distance from world-class standards

On August 2nd, Fortune released the latest list of Fortune Global 500 companies for 2023, with 142 Chinese companies on the list, including 12 companies headquartered in Shanghai. Shanghai has become the second largest Chinese city after Beijing in terms of the number of companies shortlisted for the Fortune Global 500.

From this list alone, Shanghai is not lacking in large enterprises. Moreover, in recent years, the number of companies listed in the Fortune Global 500 in Shanghai has been increasing year by year. But why are there few companies in Shanghai that can be called world-class in people's impression?

The concept of world-class is closely related to internationalization. The globally recognized world-class enterprises are all multinational corporations with extremely high levels of internationalization and great global influence. On the other hand, most domestic enterprises in China still focus on domestic business, with a relatively low proportion of overseas revenue. According to 2022 CICC statistics, 40.4% of the revenue of top US companies comes from overseas markets, while the proportion of overseas business of top Chinese companies is only 12.8%.

However, it should also be noted that more and more Shanghai enterprises are going abroad, exploring overseas markets, and building a global industrial chain. For example, in 2022, the proportion of cars exported by SAIC Group to the total production has reached 17%, ranking first among domestic car companies. The contribution of overseas revenue has increased from 7.5% in 2021 to 11.2%. In early July this year, SAIC Group announced that it would build production bases in Europe, achieving an important breakthrough in China's automotive industry chain going global. Similarly, in early May this year, Baosteel announced that it would jointly invest and establish a joint venture with Saudi Aramco and the Saudi Public Investment Fund. This is the first time a Chinese steel company has built a full process steel production base overseas.

Expanding overseas business depends on the strong strength of the enterprise. An important criterion for measuring "strength" is profitability. From the Fortune Global 500 list, it can be found that although Shanghai's shortlisted companies have a large scale, their profitability is still relatively weak. Among the shortlisted companies, except for financial and banking enterprises, most of them have an operating profit margin of less than 5%, while the average operating profit margin of the Fortune Global 500 is 7.1%.

From the perspective of industry distribution, most of Shanghai's world-class large enterprises come from traditional manufacturing, banking, real estate and other industries. However, in the fiercely contested "bottleneck" areas of various countries, Shanghai is still waiting for its own Nvidia, Intel, Microsoft, Google... to emerge.

The picture shows the Microsoft headquarters campus in Redmond, 16 kilometers east of Seattle, United States, photographed by Yang Lei, a reporter from Xinhua News Agency

Having a world-class perspective

Shanghai needs first-class enterprises that align with the city's functional positioning. Shanghai is focusing on strengthening the four major functions of global resource allocation, technological innovation strategies, leading high-end industries, and opening up hub portals, promoting the development of the three leading industries of biomedicine, artificial intelligence, integrated circuits, and six other key industries. The future first-class enterprises in Shanghai should be those that can achieve the above-mentioned functions and adapt to the above-mentioned industries.

"The vision of relevant government departments is very important," said Xia Yu, Chief Researcher of Shanghai Institute of Industrial Transformation and Development. At the end of the 20th century, he worked at the Shanghai Economic Commission and witnessed the process of Jiang Shangzhou, the then deputy director of the commission, promoting the development of Shanghai's integrated circuit industry. To this day, he still remembers Jiang Shangzhou's passionate speech at the Shanghai Information Industry Symposium in Silicon Valley, USA in 1998, depicting the future development of Shanghai's integrated circuit industry. It was also due to Jiang Shangzhou's strong invitation that Zhang Rujing, who was later hailed as the "father of Chinese chips", came to Shanghai.

Xia Yu recalled, "That day, SMIC and Zhangjiang Group signed a contract on a cruise ship in Huangpu River. During the ceremony, someone suddenly said that Zhangjiang has been together for 10 years, and this year is different because there are two people, one named Zhang Rujing and the other named Jiang Shangzhou, and together they happen to be called 'Zhangjiang'."

On August 1, 2000, SMIC laid its first pile in Zhangjiang, surrounded by fields and fields. Before the establishment of SMIC, the gap between mainland China's integrated circuit industry and international mainstream technology was five generations, which was narrowed to half a generation through SMIC.

Aerial photography of SMIC located in Zhangjiang, Shanghai, by Meng Yuhan

Nowadays, under the active layout of Shanghai, "little giant" star enterprises such as Shangtang Technology and Biren Technology are constantly emerging. These enterprises are crucial for Shanghai's "future" industrial layout. "Shanghai's five major fields of future health, future intelligence, future energy, future space, and future materials all require further support from artificial intelligence technology and intelligent computing resources." Luo Jing, Chief Operating Officer and General Manager of Shanghai Shangtang Technology, said that with the support of Shanghai, Shangtang Technology has been leading the industry in laying out new computing infrastructure in the era of artificial intelligence since 2019. In the future, it will focus on basic research and vertical applications to support Shanghai in building a more internationally influential artificial intelligence highland.

Thick planting of world-class soil

The government's wise eye and pearl selection are important for industries and enterprises, but more importantly, they provide a good environment for the growth of various types of enterprises. There are many standards for "good", such as marketization, legalization, and internationalization, with the goal of ensuring that enterprises can develop with peace of mind and focus. Xia Yu said, "Many companies like to come to Shanghai because they fundamentally value the environment - a legal and contractual environment, a convenient and lifestyle friendly environment. In a good environment, companies will generate unimaginable growth."

Tata Technology, a manufacturer of humanoid robots, came to Shanghai due to the environment. In 2015, DAVAN Technology was established and after traveling to various places, it established a global headquarters in Shanghai in 2019. It has now built an intelligent robot industry base with a construction area of over 300000 square meters in Minhang, rapidly growing into a leading unicorn enterprise in the robotics industry. "It is difficult to find so many industry talents in Shanghai in other regions. Shanghai's robotics enterprises occupy half of the country, and the consumption hinterland of the Yangtze River Delta is vast. There is no reason not to be in Shanghai for service robots," said Wang Bing, Vice President of Data Technology.

At the 2023 World Artificial Intelligence Conference, Data Technology brought multiple futuristic humanoid robots, captured by Haishaer

At the end of 2017, Shanghai introduced the 1.0 version of the optimized business environment plan. In the following years, Shanghai held several city wide business environment promotion conferences at the end of the year and the beginning of the year, and updated the plan on an annual basis. As of this year, version 6.0 has been launched. At present, Shanghai is further reforming its new version of the World Bank's business environment assessment system.

In addition to the business environment, the overall urban environment is also a potential factor affecting the construction of first-class enterprises. Professor Lu Ming from Shanghai Jiao Tong University said, "As long as life in this city is done well, people will come. International top talents choose cities around the world, but in reality, they choose the cost of living and quality of life." He believes that to improve the quality of urban life, Shanghai needs to invest more effort in the service industry, such as cultural tourism. Although it may not be profitable, only by doing well in cultural tourism can people be attracted to engage in industries that make money.