You may have seen my piece on the Telegraph website today; you can read it here below:
Britain should harness the power of China's Red Tech Revolution
As President Xi continues his state visit, it's time to wake up to the new truth in our affairs. We're about to move from the era of "made in China" to the new age of "invented in China". If we don't get our act together, we're going to fall behind as China wins the war for the world's best jobs.
Behind China's recent market wobbles that shook world markets, a different story is in fact taking shape. An entrepreneurial "Red Tech Revolution" is transforming the country we once thought was the sweatshop of the world.
In the last Five Year Plan, China set a bold ambition to become one of the world's leading innovation nations by 2020 – and one of the world's leading science powers by 2050. And guess what? China's arriving early.
Within the next two years, China will become the world's leading science spender. It's science budget – already over £130 billion – will outstrip Europe this year or next, and overtake America by 2019. Although Chinese science is not especially efficient today, five out of the world's top 10 internet firms are already Chinese. Firms like Alibaba, Tencent, Baidu, Xiaomi and JD are all bigger than eBay.
Over the last two years, the "Red Tech Revolution" powered by a wave of Chinese entrepreneurial chutzpah has transformed the number of Chinese start-ups as people heed Premier Li's advice that "everyone can be an innovator". The country has now spawned more than a dozen "unicorns" – start-up firms with a value of over $1 billion, and over £10 billion of venture capital money poured into backing Chinese entrepreneurs in 2014 – three times the figure for the year before.
Amazing new apps now let China's city dwellers order food and fruit like pears and apples from their home village hundreds of miles away, with some firms promising delivery from "tree to tongue" in under seven hours. It's sparking an incredible return to the countryside as start-up wannabes return home to set up rural tech firms. Even high-profile mayors have quit their jobs to join the rush to start up. An incredible 96 per cent of the 60 million companies now registered in China are now private companies – and private sector growth now powers the majority of the Chinese economy. It's not Communism as we used to know it.
And here's what it means for jobs. While we are creating millions of low-paid, low-tech jobs, China is creating thousands of high-paid, high-tech jobs – every day.
For two centuries, the west has created the world's best jobs – boosting incomes and living standards for millions of families. But a historic shift is now under way. The best jobs of the future may soon be, not here, but in the East.
In fact, across China, small and medium-sized tech companies will create more than 150,000 jobs for graduates alone in 2015 while some 129 High & New Technology Industrial Development Zones create another 500,000 jobs more.
Contrast that to Britain. Something like 85 per cent of the jobs created in Britain over the last parliament were low-tech, low-paid jobs. In fact, in 2014 – the last year figures were available – Britain created just 203,000 knowledge economy jobs – a fraction of the Chinese figure.
The bottom line for Britain is that unless we partner – we won't prosper.
Five years ago, many forecast that as China's economy developed and rebalanced away from exports and towards consumer growth, there would be great new markets for European firms. To an extent that's true. But the real win-win between the UK-China space will be in the field of innovation, technology and enterprise.
This is a huge opportunity for UK and China to grow together. The UK has been one of the most inventive and entrepreneurial nations on earth for centuries. Our scientists are among the most efficient on earth and are among the greatest collaborators with Chinese scientists. Chinese firms like Huawei already find the UK one of the most fertile places to think, innovate and test. Our universities are full of over 100,000 Chinese students and scientists – and numbers are rising fast. We are now at the stage where UK firms know they must be in China, because quite simply they will learn more doing business there than anywhere else on earth.
But we need to speed up reform. We need new joint funds to help take great ideas here – and spin them off in China. We desperately need free movement of scientists and students between us. And we need to turn our embassies and consulates into hi-tech hubs spotting new tech and new entrepreneurs that might make good partners for the UK.
For thousands of years, China led the world's science race, inventing the breakthrough tech of the ancient world – paper, gunpowder and the compass. History is about to repeat itself. Let's not get left behind.
This piece was originally published on the Telegraph website here