Chinese tech sector growth provides food for thought
I'VE had some enlightening conversations about China of late. One related to a meeting with a Chinese tech entrepreneur who was working hard to develop a pipeline of skills for his corporation.
His solution was the creation of a dedicated university of 25,000 students, owned by the business. That's 25,000 students - and I had never even heard of the company.
This anecdote gives some insight into the scale of the Chinese economy and its tech sector but also the attitude that is driving its remarkable growth.
China, which is currently the world's second largest economy and its largest exporter, has made incredible strides when it comes to tech.
The scale of the company's digital economy has reached more than $2.5 trillion, and BAT – the search engine Badu, the e-commerce giant Alibaba, and the social messaging company Tencent – are increasingly compared with the FANGS (Facebook, Amazon, Netflix and Google).
Alibaba and Tencent make it into the world's top 10 most valuable companies with valuations of something like $480bn and $570bn respectively. Indeed, China increasingly accounts for a significant number of the world's most valuable tech businesses, and the same trend is apparent in the list of tech ‘unicorns' worth $1 billion or more. There, China dominates.
Of the top 50 in Wikipedia's ranking of tech unicorns, 26 are Chinese and 16 are American. Of the top 20, 11 are Chinese, six are American and two are Indian. Topping the list with an estimated value of $150bn is Ant Financial, a financial services spin off from Alibaba.
All of this provides a big challenge to the dominance of Silicon Valley. For a long time, the tech sector has been the crown jewel of the US economy. Silicon Valley generates almost $200bn in profits from abroad each year but it does appear to be under challenge from China. When it comes to e-commerce and mobile payments, China's industry is now bigger than America's.
According to some estimates, China is still about 10-15 years away from being on a level with the US when it comes to its tech sector, but few would bet against that being a shorted time frame, given the rapid growth we've seen in recent times.
China may have started out as a copycat in the tech sector, but it is now very much a world power with considerable innovation and significant state-backed investment driving the growth.
Clearly China is on a completely different scale to Northern Ireland on the world stage. But I think we can learn much from the mindset of the Chinese businessman who created the 25,000-student university for this company. He was thinking big and having the guts to deliver something remarkable that was going to fuel his business's success and expansion into the future.
Northern Ireland has incredible businesses and some top quality tech companies. Some of them are thinking big and delivering incredible things.
But I think if there is one ingredient that we sometimes lack in this part of the world, it's the confidence and drive to take risks and back our ability.
It would be fantastic to see more companies follow in the footsteps of the likes of Kainos, First Derivatives and others and make a real mark in the tech world beyond these shores. We have talent to make it happen.
:: Patrick McAliskey is managing director of Novosco, an indigenous Northern Ireland managed cloud company with offices in Belfast, Dublin and Manchester. It employs 180 people and works for leading organisations across Britain and Ireland