Shenzhen: The Silicon Valley of Hardware (Full Documentary) | Future Cities

Foreigner, this is a market we are going to walk into. I really suggest you hold the camera at your side as if it were off. They are very strict about the no cameras policy. He is very busy. Many of the pieces here are remanufactured, recycled. New, some are fake replacement batteries and screens for Samsung tablets. Samsung tablet stands. Whatever you see there, look at those big chests, the safes there. All in cash. If you want to buy cases so that your iPhone sells like new, you can buy empty boxes. These are just empty boxes that they are selling, so this woman is selling iPhone 5C.

Those are not new but they are authentic. The reviews and the recycled ones. Another guy here casually swaps parts. All the tools you need to repair phones, such as vacuum chambers. remove the stencils from the screens to keep everything in place and align the screens the incessant creaking of packing tape is a sign of a done deal foreigner welcome to the suburbs oh my goodness I love Shenzhen you can't speak ill of the stranger from where Shenzhen started. a fishing village of 300,000 to 10 million 14 million 20 million no city in the history of human civilization, as we know, was able to do this sentence is creating more millionaires than any other city in China, I mean, they can do everything , it is a factory of the world people do not understand this, it could be Europe, we, anywhere else, are nine months behind us when it comes to technology and that is just a fact, the model that is being developed in Shenzhen It can be quite scary for models who have already done it. has established itself and is very successful in other parts of the world.

I think the basic principles they have for sharing intellectual property are extremely enabling. It is a cultural change. It will take a while, but the

future

is possible. It's not that Silicon Valley has divorced itself from technology. They have a lot to do with technology, they just kept moving up the stack and the key that drove that, in my opinion, was Moore's Law. Moore's Law is named after Gordon Moore, one of the founders of Intel in the 1960s, presented a In the article he predicted that every two years, I think the number of components that could fit on the same piece of

silicon

would increase. would double, so in one year you could put 10 transistors here, two years later it would be 20, and then 40 in a decade. you're talking millions and then billions imagine you have a printer and you're printing pages and you want to be more efficient, well you go from a 12 point font to a six point font that fits twice as many characters on a page and you're getting twice as much information from your printer in one go and that's literally all Moore's Law has been about: reducing the font size of circuits.

In the '70s and '80s, there were a lot of failed research attempts to build parallel computers like the computers that were like you know the cray machines and the thinking machines, 60,000 processors and they were expanding, and what you found was that if you spent more than After two years of research to try to double your computer's performance, it was much cheaper to just sit back and wait and let guys like Intel go ahead with Moore's Law and buy the next fastest processor, and what he discovered was that, in Actually being in Hardware was not profitable and therefore really sold products in the past, features were one of the things that what you can do with Windows 98 is similar to the web, you can browse your hard drive using the forward and back buttons just like we would on the web, the first generation windows that would come out in a new generation would be so slow that they would be completely unusable and then two years later like oh actually that's fine and then four years later then it's like fast forwarding, it's not because Microsoft made it faster, computers got faster for free and that's why people now don't have to worry about typing details. things in C code that you could use high-level languages ​​that you can use as web pages and JavaScript comes along and with all that kind of fervor and people chasing that innovation, there was no value in soldering parts, there really was no value.

In 1983, global sales of personal computers rose 76 percent, but last year the increase was only 19 percent, and this year analysts predicted sales growth will slow to about four percent. Losses between the two largest home computer manufacturers through June of this year exceeded $600 million in that building things had to go into an economy where people were paid much less and what you see now is that in Silicon Valley, the entire tech ecosystem is driven as far as the road goes and now Moore's Law is ending. or it's over and the car is still sliding down the cliff, but there's no more road underneath and they're like, huh, like computers aren't that much faster anymore and now you're seeing people going through an optimization phase, which is cool. , but at the same time people say, well, how do we differentiate my product?

Optimization sucks, that's not a great business model because now we have supercomputers in our pockets, now the question is what do we do with okay and what does that thing in my pocket still not do and that's why people are giving Realize that there are niche markets for

hardware

, we need to have a little accessory that you will have like my Fitbit, all these little things, my little digital locks, my smart homes, my sensor networks, all kinds of things that are coming out and saying great , we have to figure out how to build this and now they're coming back to this ecosystem and oh, you guys know how to solder, we forgot about that, that's really cool, can you? help us build these things, what should we say?

When I was 18, the first time I visited us, I use a trash can and like a wood vacuum cleaner to the first electric robot. We want a robot that is like you, but a little better. So you always feel challenged. I dropped out of college after my first year of college. I decided to follow this path and it's really nice to be in HEX because hexes are the best educator and help you grow. Hex is a

hardware

accelerator, the world's first hardware accelerator. we take equipment that comes with a proven technology and a prototype and help them prepare for market launch we provide them with 100,000 US dollars we help them with electrical engineering design for manufacturing industrial design mechanical engineering their market strategy how they are going to launch and for that we take nine percent of the social capital in the new companies.

I'm Thomas, co-founder of provenzo and Andrew Robinson, we make a big robot, we use a kind of special joystick that's usually used in surgery, these things and it's force feedback. joystick the market we are targeting is nuclear decommissioning and what you can see here is a small version of a robot and now at hacks we are building the very large version so you can compare the size of the wheel, but it will be something quite large . A larger version of the robot will carry a robotic arm to automate some of the commissioning work in Shenzhen, as everyone now knows the hardware capital of the world, so this has been our home since it started, the reason why that we can come here.

And bringing the teams here is because of the ecosystem around them, which helps them create products very quickly and from the initial concept to the final launch of the product in the market. Neura is a headphone company. We are making the world's first tunable headphones. find out how you hear and provide you with the perfect music so I can show you here my colleague Luke's hearing profiles and my hearing profile. What you can see is that there is a difference in certain frequencies between the way Luke is sensitive to that. particular note or sound the way I'm sensitive to it, what our headphones do is sonically shape the sound and make sure that what we hear is not too bassy, ​​not too high-pitched, it sounds balanced, it sounds even and it sounds just right.

So it was recorded that anyone doing research and development had better do it here because they can do things much faster and much cheaper. I mean, if you try to do something like that in the UK, it will take you a long time. Usually a month to do something that is specialized from an engineering company and that you can do in a couple of days, let's say we completely design a new robot, we can pretty much get it out in a week, even if there are 10 pieces, we can ship it o We can do it ourselves so you can print 10 3D printers at the same time, put all the pieces together and just shoot.

I never saw any prototype like that when we were in the US for some of the standard ports. We can place the order in the morning and then we will receive it in the afternoon or the next day. We can get the part manufactured and in a few days, in Switzerland we were planning to make this robot in nine months and here we have the opportunity to do it. in three months, so it's really a race if you look back over the years, obviously Shenzhen became a manufacturing hub very, very quickly and not long ago it was literally rice paddies academically and in Popular media usually summarizes it in one sentence which is that Shenzhen was a small sleepy fishing village and then because it was designated as a special economic zone, it became a metropolis overnight.

That singular phrase is what I am trying to demystify through my work today exactly how many people live in Shenzhen is a mystery. The number 10 million is used more as a reference, so from 300,000 to 10 million this population grows. No city in the history of human civilization, as we know, was able to do this before the 1980s. China was in a very poor economic state. There was a stagnation of industry there was a planned economy no one was allowed to have business it was a very poor country the leaders in Beijing have been thinking about what they can do to try to lift the country out of poverty um foreigners established the four special economic zones each of them next to an already developed economy the ambition was simply what can the country do to generate jobs to generate economy to feed people essentially it was a very modest intention under the planned economy there was a social safety net for each person it was rationed with food coupons clothing coupons electricity coupons only in Shenzhen could you buy a piece of bread with money to be willing to come to Shenzhen to the special economic zone to try to create something more it attracted people who wanted to have more freedom questions thanks um foreigner what was notable to me about xinjin is that even the planners themselves would tell you that the city evolved much larger and faster than they would have predicted.

I think it's too generous to think that Shenzhen was nothing and then with this special economic zone created it suddenly became a city, but there's something else that isn't answered by simply top-down planning. Thank you, yes, good morning, thank you all for joining me in a discussion about the innovation that is happening. Here in China we are investing with you, the developer community, we have been investing in open source solutions because we know that when there are open source standards and offerings, I think the pace of technological innovation and the pace of technology adoption it accelerates.

Over the last 100 years, the Industrial Revolution put us in little cages, consumerism has queued up a lot of creativity, but the post-industrial generation should not have more freedom to create, explore events, I think to make a movement, we are bringing it. So we're here with the MakerBot cupcake CNC, which is a 3D printer that you can build things like Tom York's head because it actually opened the data that was filmed for a video of his. What's also interesting about this whole scenario is that there is a whole thriving community of users who use them to build all kinds of different objects, share the objects online, and also share information on how to build and improve the design.

Everything is completely open source. The software is open source. The hardware is open source. I can't wait to see what personality people come up with. I think the recent rise of the maker movement started around 2003 2004 in the US. Laser cutting and 3D printing are helping people be able to build. things and actually building them for fun rather than just having a commercial purpose at the time, the guy called Dale Doherty was thinking about starting a publication called make before Mick came along, the only word we had was hacker, right ?, and I think not. I don't want to call the magazine hack because it had a really negative connotation at the time and make was something like what you would write to compile a programso that it resonates with the programmers you know. make she was like some kind of people demon.

Who would read the magazine that the Turn Maker coined? I think by creating that post you solidified the movement at Maker Faire and created that phenomenon in China. At first, no one knows about the manufacturers because we go to the McPherson Bay area. We're still jailers, so instead of waiting for someone to do it, we say why don't we do it. When they told me they were bringing the first Maker Faire here, I thought: how can you have a Maker Faire in an area where people don't? It's not recreational, you do it as a job, right?

Because manufacturing in the West is something that is used to remind people who are in service economies that there is something called manufacturing just when you have a manufacturing economy. I want to remind you that there is a manufacturing industry that seems strange and what I realized is that actually China's middle class is the size of the entire population of the United States, so even if a small sector of the Chinese people had promoted to the upper middle class, it is large enough to create a movement in China itself compared to the United States. Indicates the scale of manufacturing, we do not know if it will be successful or not.

The first year we had more than 60 manufacturers and last year we had more than 200 manufacturers. It is a huge wood. Some interesting phenomena have also emerged from this in recent years. What is happening is the open source hardware movement. Traditionally, the circuit board is close and preparatory. You need to have a contract, confidentiality, and a large upfront payment to gain access, but with open source hardware, anyone can access that information, and everyone can. modify that to demand your people who need here to create a circuit board and just below expectations it will be open, it will be copied and evolved by someone else, there is no one running around in the sentence and saying, "Okay, Well, I should be credited for creating.” this, if someone else can make someone else use it better, better not have the ego attached to a creation and understand how the open source system really works, the creator movement is at that moment, I'm getting a little tired of hearing about The same people on TV over and over again, so I decided to do something about it.

This Arduino project, which I called enough, will already silence the television every time any of these overexposed personalities are mentioned. To mute the TV, I'm going to use an IR LED now, every time a keyword is mentioned, the TV will go silent for 30 seconds or the producers met with Kim Kardashian today, it should do a good job of protecting our ears from having to hear the details of Kim Kardashian's wedding. Arduino is becoming the trigger point because it has too many millions of manufacturers using this is a prototype you're trying to do nothing arm aerobic for your people have Parkinson's disease we won't make a spoon like this and we'll sit here and yeah , stable if we come to Shenzhen like 10 years ago, 20 years ago, it will be very difficult for a manufacturer to take advantage of the resources, but now you have so many resources that it is in the middle of a reform, so it is a big company, especially the suppliers of

silicon

like Intel and other emails. like IT, they see that we have new customers, we have a new possibility for new

future

applications of our technologies, so they make their own controller board, like Edison, like Curie, so they want to take advantage of the profit stage of application development .

Now this board is based on Intel technology, it is a small dual-core computer system, it has Wi-Fi Bluetooth and it also has a Linux operating system. I think part of the reason why Intel has to change that way, you know. their roadmap, just like anyone else, they define Moore's law and they saw the bridge come out and under them before anyone else, they managed to push technology like this and then the other foundries like tsmc and UMC and the voice followed them, but now they are slowing down, everyone is catching up, they say, oh God, we are gasping for air and trying to find a place to move, so they have struggled to keep up with the phenomenon they created, they have failed to move forward.

Mobile devices, and those are the most ubiquitous computers today, are missing out on a huge market opportunity, and as they're trying to figure out how to adapt their innovation model to something more flexible, they really want to make sure that the brand Intel is in front of young people to make sure they remember that Intel is actually something they want to design with later and it's not just you who know something out of their reach. We tried to introduce him to this thing nine years ago. It's a bit difficult but it's acceptable, you don't need to write any boring code in a smart note, you can just drag and drop and link them.

What they are doing is learning how to code on a computer, translating it into hardware and they will build a project on our laser cutter or 3D printer so that something accepts a stimulus, light movement or sound and then generates some result. Last year, a boy built a key reminder for his mother so that when she left the house a motion sensor would pick up her movement and say, "Hey, don't forget the key," and it's funny to hear that an eight-year-old you'll know if you want to do mechanical circuits or just a purely software experience, so that's the entry level and then we give you a more systematic introduction on how to develop the skus.

You can use a mixspace to create whatever you want. You are geniuses. You are young inventors. I've seen some great examples of open source hardware being used. make a difference and create a better world, the difficulty is monetizing that because I think business solves a lot of the world's problems and people need to be able to make money if you're adding value to the world, which makes the world a better place. so there should be compensation for that in 2010 I started the first Makerspace in China called Shinto Jin. I can invite many to give a talk on open source hardware.

The first question that always arises in people's minds is how to protect your intellectual property and how you can make money if you do not protect your intellectual property. I got that question in Shanghai. I received a question in Beijing. I got that question everywhere, but when I got the same talk and sent it, the reaction I got. What's new in this? We've been making money doing this for 20 years. I said the reason we are here in the watch campaign is literally because of the electronics markets. You know, it's a fantastic resource of all the different possible and different components. devices that can be a kind of Frankenstein put together for prototyping by teams, it is a source of inspiration, it is a source of discovery of new products that could potentially be brought to the West and every month I see a different invention there, nine of each times. ten, they probably won't make it to the west, but some of them make it overseas, like the hoverboards that were here for a couple of years before they came to the United States and then you'll eventually see them make their way to the states in other countries.

I don't see it, there are several different ways of looking at the market for an engineer. You're a bit limited, flipping through catalogs and looking at pictures and very slowly going through spec sheets for examples if you want to flip a switch. a product you want to know how it feels you want to know the exact size and the little assemblies and the complicated parts and it can take a long time to find exactly the right part you come here and there like stalls with hundreds of different types and you can just walk up and touch them and play with them and put yourself in stall by stall and see all the different variety and it's not there, it's not just a showroom if once you find the switch that you like and it would be like I would like to buy thousands of them and then for a very low price, you can buy it over the counter, take it with you and, you know, go into production, you can fix your phone here abroad, it has a lot of acquired knowledge and skills, there are electrical engineers who will solder 50 PCBs for you in record time .

You can go there and assemble different components to make a new mobile phone. There is no other place in the world where you can make something that you know you can get like a chipset that was in a notebook, for example, because less than fifteen dollars can enable computing power and sell a new product, which is a Fantastic resource for some of the startups, that kind of philosophy has spread throughout China. Foreign Daily Mirror um the washing machine when we start to see the manufacturer coming to Shenzhen, that's excitement because of how open this system is, like nowhere else you can buy all kinds of things, everything is available in volume, but in the West there are a binary distinction between the manufacturers and the hardware startup, the manufacturer, you do this for fun, you do this for your passions, but when you start to turn this into a business, you have to forget about sharing, you have to forget about all these open-ended things and focus in business, but here there are very few differentiations between I want to do this for fun and I want to do this for profit.

There is no binary myosin split of creators vs startup creators and startups in China are a Continuum. They should not be prevented from making money from them. It's something you love to do and you shouldn't be forced to choose between open and proprietary just because you want to become a business right now. It's just that in the West we haven't seen the open source hardware system work in Europe and abroad, thank you in the West. It's an idea that I can have a company that doesn't produce anything, has a ton of patents but makes money by suing everyone for the rights to those patents, doesn't even have inventors, has lawyers that make money buying intellectual property and trading it, that's strange , TRUE?

It's a little strange that you don't produce anything other than making a lot of money. The idea that you can take an idea in a world that big and say that exactly one person has the right to it globally, like Apple has the right to the phone with rounded rectangles. they're the only people who can actually produce them, seriously this is the world we're going to live in, like we just give people monopolies through the intellectual property system for 20 years for stupid ideas because they were the first to present that which made sense. In the time when there were fewer people, less innovators, a less connected world, now we have this network of people where we have the power to do our things and we can almost exchange our creativity and the China ecosystem is this network ecosystem of an idea for an idea like let's trade, you know, you realize your place in ecosystems, I need other people around me, you can't be a jerk to like all the other guys around you just because you have Pat Monopoly on This, someday you are going to be at the bottom of the chain and you will need the help of other people, so you build networks of collaborations with people sharing this open source philosophy.

Oh yeah, we have our first imitators, let's say he's a fan, so the guy backs off. engineer from the video that we have seen produce the uh blueprint of 3D models that you can download and print your own what we want to do is print it all the hardware companies that come here, of course, we encourage them to do so. patent all their technology, but we don't expect them to fight anyone who copies them, we expect them to move much faster than anyone who copies them and come up with the next thing all the time and build a brand and eventually those patterns.

They can get used to it when they enter into a patent exchange, that is the use of patents, not to prevent people from copying you, the way to prevent people from copying you is to make what they are copying irrelevant because you are something much better has happened. I think for small businesses, the United States is a huge barrier like the patent system and copyright, and just like left and right, legal challenges and you spend a lot of your money on lawyers and intellectual property applications and That kind of thing is a drag. It really is, if you want to make things, you really want to work with people, share ideas openly and make things work.

I like to invent things. This is called a solo wave. You can trust the comments. You know, this is my last admission. called hovertrax, yes the history of the hoverboard is a very interesting example of someone in America who came up with the intellectual property and then spent a lot of time fighting manufacturers who were actually creating something similar. It's a great example of a case where I would have encouraged someone not to start fighting over intellectual property protection, it's better to just build a brand around a really great product, make sure you know the leading product in the area , this was really the first time we have a producttechnology that became widely popular. that became a cultural icon but we don't have a name for it, it just emerged, more people are coming, it evolves, evolves, evolves, eventually it will reach a form that will go viral, this is a kind of attraction towards the future of how things could happen you still find Shanghai there are basically fakes there are reproductions of established brands gives you an example because this is a contemporary type of Shanghai Smartwatch that runs on an Android system the reproductions were really the items that people who couldn't afford the real thing were looking for As I understand it, the early shanzai were people who worked for the biggest corporations here, like Nokia Motorola Foxconn, and they were some very smart engineers who got tired of management and like, look, I can build a phone cheaper.

Better faster than these guys. Can I understand why they have this whole process? I can do it for half the price if we just cut the fat and they would stop talking to their friends who knew all the Upstream suppliers and put together parts. and they would build, you know, what were effectively, you know, copycat phones, the key. Innovations can do it at a much lower cost, just you know, learning to walk before they could essentially execute things more similar to SanSai's ideas in the west. the idea of ​​Robin Hood they try to empower the group with the latest advances in senzai technology and the maker movement as startups that are very similar they share the same spirit even though they are not converters they feel powerful when they talk about people who left the factories and they copied well a phone that was kind of like open source stuff that wasn't open source, just like oh the schematics are on the desk.

I'll conveniently help them make a photocopy and then leave the factory with them, you know? Was that stealing or was it open source. In the west it's called stealing, and out here it's called sharing, so the devices that are on the market and you can see they have various brands, this was the highest quality version, it was 70 80 dollars, but when you turn it on, You see it. is running, a very well defined flavor of Android iconography is quite good and the best thing is that this supports two SIM cards, a replaceable memory card and a replaceable battery and comes with two batteries which is actually a feature that many local people really want to have, they are unhappy about not having a memory card slot and B about not having a replaceable battery, companies were able to very easily access the two basic components that are needed to make a phone, one is the Boom Barn, which is basically a printout. circuit board and the other one is the Gold Mall which is basically the shell so there were companies specialized in making gumban and gumo that had slots for those printed circuit boards which were very easily accessible by companies you know people of the West that are used. to sort of month-long development cycles like, "How do you do this?

It's amazing, like this capability came out of nowhere overnight, but it's actually been refined over a decade or two from of those routes of people you know coming out of the big factories and figuring this all out for themselves is something that's still happening now, but it's a very small percentage of what's produced in the market. There's a very strong emerging middle class in the market. China having the purchasing power to pay for or buy original products that may be more expensive than reproductions, it is not possible to target new markets by simply imitating established brands, there is a limit to what can be achieved in that regard once. that they are in a position where they can now build a copy of a phone pretty well, now they can start innovating, they will take an Android phone and an iPhone, combine them and create this strange thing that is cool and different in some way. , you know if you enter the market.

In Huasion Bay you will find that many people distribute these types of advertisements from companies that are called white label companies that will manufacture it for you by assembling very different components and that you can add your own brand, your own name or whatever you want and distribute it as its own item Yes, these are all white label ideas, it's an empty sample and these are all different empty samples so they can go ahead and build it for you on the spot and then place the order. I don't know how many you want and then you can ask them to go ahead and put your graphic on the print, you know, for example, or maybe you know these logos here in the west.

One kind of philosophy is, oh, we come up with something really fantastic and new that no one has done before to become a market leader and we are very successful. The Chinese mentality is slightly different. They look at something that's already on the market and then create a much better version much faster. They do not copy the evolution of the products, which becomes much more. better than what was there before we took another one on the market, it looks like a smart watch but you will notice it only has one button and the graphics are made for kids so this is a phone plus a GPS module that you can use to report the location of a child, if the child is in trouble, you can call his parents.

You can see that it has SOS calling functions. I would bet that probably 80 to 90 percent of the design material here is borrowed from other vendors that use These were previously in other Smartwatch designs, but people are sharing the IP. The guy who probably shared the IP with them was someone who could sell them chips or motherboards or circuit boards, so there was a factory supporting that sharing process and they want people to use them. things and that allows these guys to try to try like there are many models of this, in fact when we were buying this the woman next to us was ordering these and then she left them on the table and said this one is too thick let's look one.

Thinner than this one here, they probably have fewer features or less battery life or whatever, but the market here builds these different variants and maintains them because of the phenomenal ecosystem overseas. Something is really happening. Companies are realizing the importance of having new ideas and Being different, many companies that were previously involved in Shanghai are now looking at design, they are now looking at how to develop innovation in their own companies. The model being developed in Shenzhen may actually be quite frightening in other parts of the world. Not surprisingly, many American companies are now looking at models developed in China to see how they can be adapted overseas, so those are some of the products we make.

This is President Obama wearing my headphones with my business partner Mitch Richmond, those people. is being here you know Akon what I am just this photo my partner Venus Brown this year is signed by Venus Brown what I forgot who signed this because someone famous I forgot this is my office hello and that's something I can't live without It's my cigarette like I can't do without my cigarette I'm sorry, I just cost, we're traditional like a manufacturer now, right, you know? give me a product to make, we make something like a monster and all that, a creative landscape of Harman Kardon ltech JBL, the biggest industry, we actually dominate eight to twelve percent of the US market on the side of audio, but what we're doing so differently is that we have our own design house and we can create a really cool amazing product. here is the design house, some inspiration on what we can do, we have some instruments, 3D printing, rapid prototyping, this team is designing some 3D characters, this is a game, it is interactive learning in China, many factories they are very traditional, so this is also It's a very new model, the CEO tried to break this model and since 2005 they are producing now for 45 brands, mostly international and mostly in the US, you know, most of the People don't realize that there is at least 26 percent of a Silicon Valley technology that is actually making it, so what they do is hire a kind of headhunter, so to speak, because there is so much innovation that we are between a minimum one month and one year.

Advanced when it comes to technology, for example, we have an amazing bed that you can sleep in and the moment you wake up in the morning, it will give you statistics on how many times you roll over, how much you sleep, how much you rest and then also can reach your blood pressure, which can tell you if you have any problems. be identified and this is a technology that already exists today and we have done it almost two years ago number one as is life and then they sell it here 100 times more expensive China feels a little boring I think about this business model that we did it here, but all the credit goes to someone else, everyone is looking for the Chinese startup made in China.

I want the proof to be shown to the world. Look, we innovate, we have many opportunities here. I think our focus should be, let's create a quality product and you can be proud and say it's made in China, so if you can focus on that new technology, focus on a brand and focus on quality, I think within the next five years people will have a different perspective of the fact in China. China I think that will happen abroad. Crossing what happened in Shenzhen 35 years from now, its uniqueness is fading because those same innovations say politics, innovation or industry.

Innovation is now everywhere in China, so you don't have the advantage of being the only one. or even the first one, it's kind of a trap, right, recognize what you've been able to achieve, but it's also inherent, like how are you going to do it better. People who came to Shenzhen grow old, and then as experience grows, they start. to develop something new Rousey Manufacturing become engineers become brands while the government is pushing manufacturing further into Shenzhen um impact on internet.com a lot of confusion is happening right now what am I going to do, what should I do next do I invest in branding or simply close my company I think it is a perfect time for innovation it is because I can attract at least a part of them to put the resources to innovate in something new expressions of challenge I have seen a change in the way they innovates In China it happens that there are a fantastic number of new Chinese companies that are making really good products.

Chinese style councils are getting better because they want to learn from Europe if you go to a conference with our innovation speakers from France, Germany, England or whatever. most of the people will be chinese in the room where they want to learn english. Foreigners have to go through this small, very strict screening process by a small group of people who are venture capitalists, young white males in their 20s and 30s who control what the technology will be. developed how the technology will be applied and how it will be available to the general public, that is the very definition of control economy that they are willing to have, like these massive fights for settlements and epic legal battles that go all the way to the Supreme Court and things like that Yes Everyone was like, "You know, actually, we all do good work, let's just work and try to figure out how to innovate, but it's a matter of getting a critical mass of people to accept it without a big brand spotting what kind of feature we can have".

The Sentai system meets the needs of everyone, it is not a small group of people who determine what is developed, when and how. Right now we're still in a very early stage of this open source hardware movement if we go back to the late '90s, open source software. I just started, I mean Bill Gates was talking publicly about how open source is communism and will destroy the software industry and today Microsoft is one of the biggest supporters of open source and even open sourced all of Windows 10. If the history of open source Source software is used as a reference point.

We are almost five years away from this being discussed in the mainstream. It is a change of mentality, but the future is possible and they talk about China being authoritarian, its rules strict and all kinds of things. People here have developed a way of coexisting with the rule of law and the way life should work, they sort of look the other way at the right times. I think when things have to happen, that's how we've managed to make sure everyone is fairly compensated. rewarded and works through this system the other thing is to be clear that a 13 does not mean evil, it is just that there is an Authority.

I mean, the Communist Party knows as well as anyone else that they have to keep people happy. They're not going to like kicking people because they want to do it and they want to be trivial and small about it, so they try very hard to implement an economic policy that creates prosperity. One of the things thatgovernment has said is that we need a technology-oriented service economy and we need more young people to become interested in this creative movement. We want to map that into our system and hope

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y inspire another generation of young people to want to become hardworking factory owners and employers. innovators like their parents were and now there are even small maker spaces in cafes and innovation labs popping up left and right abroad, on the one hand it's great that the national government has seen this emergence of new new media technologies and I think it's genuine I want to support it, however I don't think there's a very good track record so far of government involvement in these more bottom-up activities.

Take, for example, art districts, something that was emerging in China 10 or 20 years ago and really caught the imagination of artist colony galleries, but as soon as the government started supporting them, the inevitable process of gentrification ensued. , rent went up, more notable galleries moved in, so artists who were really trying to experiment had to move out, so I have a similar concern for these. The tech sectors and government inevitably try to support it, but formalizing it is interesting to see how the city evolves and, therefore, there is a kind of wave of money and gentrification that can roll from the East to the West and from the south to the north the pace at which they do it is crazy, you can walk from one end of the town to the other and when you get back to the other side enough to save it will change, you won't recognize it, it's just just tearing down and rebuilding itself as you walk through it, there's a region there that was

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of little electronics stores, just They razed it, built a luxury shopping center and put a skyscraper on top and you wouldn't recognize it.

I mean, we have more skyscrapers here than anywhere else in the world. Honestly, if you walk around Central right now, we have over 278 buildings built, up to 74. I travel all over the world and when you look at everyone else, you say, "hey, you." We know that we are the fastest growing society in our industry today and that is just a fact, in China there is a general lack of awareness about the negative ramifications of gentrification, as you know, in the 60s, nowhere New York people thought that was a bad thing. The reason the city has adopted this notion, the new technology is trying to reinvent itself.

My concern is that in this reinvention he wants to get rid of his even more immediate past very quickly. A city that really struggled and really depended on a lot of things that the government couldn't. It's not that things happened by chance, accidentally, a lot of this was bottom up, in fact, there wasn't just one fishing village, there were two thousand. These towns have evolved along with the city, they have taken on very important roles in providing housing, providing a certain social structure, jobs, a certain stability to the city that was not planned, they simply evolved with the formal city.

I would like it to be more like a kind of bacterial colonies and petri. eventually you grow a lawn of bacteria through it, you know all the communities interconnect, but you know it's kind of a natural growth curve. We are in Baishi Joe which is one of the 300+ urban villages in Shenzhen and it doesn't matter here. what you don't need to go anywhere and you can find everything here. That's the amazing part about this: it provides everything you need for a community. When the government designated Shenzhen as a special economic zone, they left land for the villagers themselves to build on. houses this is the border line between the city and the open Village this side is the Urban Home and this is the property of Urban Village these Urban Villages are also breeding grounds for a lot of innovation you can change the structure you can change the facade you can spill your workshop in the alleys the entire neighborhood was built this way from the bottom up Shenzhen really represents a new modern image it is a modern city it is a new city the urban villages are completely opposite to that image the mayor's office declared the need to get rid of the society's cancers in those words are going to be remodeled this month, actually in April 2016, so that's how quickly 150,000 people who live here need to be relocated.

There are some rumors that, like the market here, it will eventually have to be displaced because, as things gentrify, the rent on the stores will increase to the point where they won't be able to sustain selling these as small pieces. and all that, across the street, there's a lot more Urban Village, that's where I and I are headed. I can't see if it's for better or worse, but things are definitely changing and therefore you go straight from the market to the Urban Village area, like this one. Personally, I have a bias and I hope it never goes away because I enjoy it.

There is so much and it is such a valuable resource to me that you will see large districts where people take phones and take them apart and then another area puts them together into another phone. There is a lot of recycling and recycling going on so you can see. Like there's a person down there with what looks like a pile of junk, but if you look closely it's just that they're going through cell phones and taking parts off of them, it's like sucking corn, we almost just take a quick look. walk through one of these casual areas selling recycled iPhone parts.

They actually have big packages of motherboards that they've taken from phones that were previously discarded and then what they do is they take the motherboards out and take them. The splinters are removed and eventually find their way back to the market. I mean, you can get roast pig's feet and then iPhone cases. This marketplace itself plays kind of a critical role in the ecosystem in terms of being able to move products, you know? If a factory did a build and they had excess and they want to get rid of it, I love it, it will come through this market and it will be recycled through the system, these are the ones from this, straight from the factory, you can see that the plates base are uniform. still on the conveyor so this was when they didn't even get out of the fully manufactured apple and it hit the scrap heap here, well people will move on and you'll see they've taken out some ice for recycling and reprocessing to repair phones etc. , here are blank motherboards and the interesting thing is that there is no soldering, they still have a golden color, which means that the board has not been processed at all, it is purely virgin. boards of the facilities you're going to move on to, we're getting a crowd.

I can get a lot of useful things for a fraction of the price you would get, even at the markets you know on Main Street, those are the things that are going away. but those guys will renew themselves no matter what they innovated despite the government, they will be right, they will be right, they will look, they will keep walking and they may have opened a path that seemed interesting and that path is now being paved towards the path they will open another path for you You have never had a fox run over by a steamroller when they are when they are laying a path through a forest the fox knows how to get away, it can run and find another place and as long as there are still green fields for these people to go to, I think things they will be fine and demilitarizing the Western intellectual property ecosystem would be fantastic, right?

I think it's something we can do well, but it's just as difficult as getting us back from the brink of the Cold War, you know everyone has to relax, universally agree that we need to have a new paradigm and I think one of the problems In doing so, the militarization of intellectual property has actually benefited large companies. and if they back off from their stance of having huge IP caches for Nuke, the small businesses that come up are threatened by innovation and so instead of seeing this amount of openness, you're seeing the exact opposite: you're seeing the system calcify. and maybe it will happen in days where you know they will own their buildings, but you know they will be so entrenched that they won't be able to move forward, each of them is locked in their space and then in a very flexible ecosystem like China.

They will just walk over them later and wonder how that happens it is because they did it to themselves at the end of the day the beauty of Santiago if you come here with the talent with your efforts your diligence you can earn a place for yourself, the creators, the hours when the Internet of Things produces energy, they all converge here in Shenzhen and that's what makes sense and the Silicon Valley of power, yes, foreigner, every five-star hotel everywhere in China right now, this is a problem, you identify this. It's a perfect example if we can get a person to take two and three seconds to make that adjustment.

China will be a perfect place. Detail: Will they be more like the UK in that they will simply shed their manufacturing expertise as they gentrify and sort of go straight towards a service economy, as you know, or will they stay rooted in kind of a manufacturing ecosystem and they will keep the design parallel to it or they will just stay forever in manufacturing, right? That's really your core foundation. and value and where they want to be. I mean, if China went from where it was to where it is today in 30 years, it could do it again in 30 years, like in my lifetime, we could see the answer.

This question would be interesting to see where. the answer ends up being foreign