In April, Premier Li Qiang of the State Council proposed during a research visit to unicorn enterprises in Beijing that efforts should be made to explore new development areas and tracks, shape new drivers and advantages for development, and inject strong momentum into achieving overall improvement in economic operations and promoting high-quality development.2023China's Future UnicornTop 100The unicorn companies are concentrated in Beijing, Hangzhou, Shenzhen, Shanghai, etc., focusing on digital healthcare, artificial intelligence, new energy, advanced manufacturing, enterprise services, integrated circuits, metaverse, and new overseas expansion.8Large fields. In addition to established and well-known investment institutions, government-guided funds and industrial capital are accelerating their entry into the market.
What factors have led to the regional distribution of unicorn enterprises being concentrated in Beijing, Shanghai, Guangzhou, and Shenzhen? Emerging fields such as digital healthcare, advanced manufacturing, and the metaverse are spawning unicorns. How will these contribute to high-quality economic development? What pain points do unicorn enterprises face in development, and can the capital market solve them? Overall, how effective is the current multi-level capital market in supporting unicorn enterprises? How can future unicorn companies leverage the capital market to better develop new drivers and advantages? How can they guide listed companies in primary and secondary markets, as well as new sectors, to support the development of unicorn companies? Frost & SullivanFrost & SullivanLu Jing, Partner and Managing Director of Frost & Sullivan's Greater China Region (hereinafter referred to as 'Frost & Sullivan'), was interviewed by Securities Daily to discuss unicorn enterprise development.
Securities Daily
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Securities Daily Reporter: What factors have led to the regional distribution of unicorn companies being concentrated in Beijing, Shanghai, Guangzhou, and Shenzhen? Emerging fields such as digital healthcare, advanced manufacturing, and the metaverse are giving rise to unicorns. How will these help promote high-quality economic development?
The degree of urban economic development, the ecosystem and atmosphere for entrepreneurship and innovation, the richness of talent resources, and the government's support for enterprises are key reasons why unicorn companies are concentrated in regions such as Beijing, Shanghai, Guangzhou, Shenzhen, and Hangzhou. Specifically, the degree of urban economic development benefits from the contributions made by these unicorn companies to economic growth. On the other hand, prosperous economic development also provides a favorable environment for the business development of these unicorn companies.2022cities each yearGDPLook, Shanghai, Beijing, Shenzhen, Guangzhou, HangzhouGDPRanked first, second, third, fifth, and ninth in China, these cities represent typical new and old economic transitions in the country. The new driving force for economic growth is accelerating its formation and providing a broad development space for unicorn enterprises.
The ecosystem and atmosphere for innovation and entrepreneurship are crucial for the development of unicorns. An excellent innovation and entrepreneurship ecosystem, along with a favorable atmosphere, not only promotes exchanges and cooperation among different enterprises but also facilitates communication between unicorn companies and investment institutions, providing an important foundation for continuous innovation momentum. Taking Beijing as an example, Zhongguancun in Beijing is home to a group of entrepreneurs and innovators who are brave in innovation and risk-taking. The rich scientific and educational resources and the strong industry-university-research platform have given rise to a large number of cutting-edge technologies, giving birth to a group of unicorn companies. Shenzhen is also often praised as an entrepreneurial city, surrounded by Tencent's ecosystem, which has fertile ground for innovation and entrepreneurship and is highly attractive to entrepreneurial talents.
Cities with a high level of economic development and a good entrepreneurial innovation ecosystem and atmosphere are usually more able to attract outstanding talents from various fields, especially technical talents. Talents are an important factor for unicorn companies to continuously innovate and develop forward. Finally, government policy guidance and support for different industries, as well as the requirements in industrial development planning for optimizing the entrepreneurial innovation environment, provide an important foundation for entrepreneurs in terms of capital expenditure, tax incentives, technological innovation, and industrial linkage.
Looking back at China's past development, it can be seen that in the past, economic development determined technological development. However, now it will be the other way around: technological development determines economic development. The most direct manifestation is China's emphasis on the development of digital economy. Emerging fields such as digital healthcare, advanced manufacturing, and metaverse, which integrate technologies like artificial intelligence, big data, cloud computing, and blockchain, are all new engines for digital economy development.2021In China, the scale of the digital economy reached45.5trillion yuan, proportionGDPonly40%It is expected that emerging fields will continue to drive the development of China's digital economy in the future, deeply integrating with the real economy and promoting the prospects of China's economy.
Securities Daily Reporter: What pain points do unicorn companies face in development, and can the capital market solve them? Overall, how effective is the current multi-level capital market in supporting unicorn companies?
Looking back at the development of unicorn enterprises in the past, most of them are model innovation companies rather than technology innovation companies. Typically, unicorn enterprises with model innovation do not have high technical barriers and need to expand their scale effect through capital drive. Therefore, these companies often test their financing capabilities more severely. Before going public, unicorn enterprises usually need to go through multiple rounds of investment from venture capital and private equity investment institutions. When venture capital and private equity institutions face pressure to exit their funds, unicorn enterprises will then face subsequent capital pressures.
With the establishment of China's multi-level capital market, especially the launch and operation of the ChiNext, STAR Market, and Beijing Stock Exchange, as well as the implementation of the Hong Kong stock market's listing mechanism for new technology and special-purpose companies, it has provided necessary support for unicorn enterprises' financing. It has also established more convenient exit channels for venture capital and private equity institutions, playing an important role in China's industrial structure adjustment, resource allocation optimization, and the improvement of financial market efficiency.
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Securities Daily Reporter: How can unicorn enterprises leverage the capital market to better develop new drivers and advantages in the future? How can we guide listed companies in primary, secondary markets, as well as new sectors, to support the development of unicorn enterprises?
The vitality of the capital market cannot be separated from unicorn enterprises, and the development of unicorn enterprises also requires support from the capital market. Unicorn enterprises should make full use of China's multi-level capital market structure, expand their operational scale while establishing a response to the national call for building internationally leading scientific and technological innovation technologies in the '14th Five-Year Plan', strengthen their own technology research and development capabilities, and create a sustainable blueprint for their own development by establishing technical barriers. At the same time, they should actively encourage support for unicorn enterprises through measures such as tax incentives for investments in specific fields by listed companies in primary and secondary markets and new sectors.
*This interview was published in Securities Daily, with reporters Wu Xiaolu and Mao Yirong. Original title is "The Empowering the capital market Supports unicorn enterprises in developing more "unique skills". >> (Click "Read Full Article" at the end of the text to read the complete report).
