The Shenzhen ecosystem: What it means for the western world

Abstract

The western world has accused China of producing low-quality, copycat, and even counterfeit products, with Shenzhen being a key place where such products are typically developed. However, the western world has failed to understand the value it can gain from the Shenzhen ecosystem. The purpose of this paper is therefore to demonstrate the importance of the Shenzhen ecosystem for the western world. Western businesses argue that China does not innovate and has weak IP protection, so it copies western products and produces low-quality products. Chinese companies counter these criticisms in many ways, and they are becoming fierce competitors to established western firms through a top-down approach that gives a price, speed, and quality advantage. This study explores the Shenzhen ecosystem to find support for this argument, because its innovativeness and product-development approach has attracted many western startups to set up in Shenzhen to realize their products. Indeed, Shenzhen is also an inspiring example for any developing country looking to establish an innovative startup ecosystem.