Municipality gaining in VC funding, patent filings, high-tech investments

Beijing has been included among the top global innovative centers, as the national economy undergoes growth toward higher value-added activities and new growth drivers, experts said.

The capital city ranks fourth in terms of innovation among all cities worldwide, following San Francisco, Tokyo and Singapore, according to a recent report by consultancy firm JLL. Shanghai and Shenzhen are the other Chinese cities in the top 20 list.

Major metrics include international patent applications, venture capital attraction, investment in high-tech industries and research and development expenditure.

"Yet the top positions are not all dominated by US cities, but rather evenly spread across the three main global regions, with Asia-Pacific cities having a stronger presence in these rankings than they would have had even a few years ago," according to the report, based on a survey of over 100 cities.

"Innovation is a crucial factor in today's technology-driven world," said Jeremy Kelly, director of global research at JLL. "China's leading cities are poised to become increasingly important players in the global marketplace for information, innovation and technology."

He added the growth in Beijing's innovation is evident in some areas.

International patent applications, for example, have expanded nearly ninefold over the last decade and it is now one of the world's top 10 cities in this measure. Similarly, the number of equity funding deals to startups in Beijing increased by six times over the previous five years, according to Kelly.

The report said Beijing is the third largest destination for venture capital funding－which surpassed $100 billion from 2016 to 2018, following San Francisco and San Jose, and is three to four times more than traditional financial centers like New York and London.

The city has also nurtured the most unicorns outside of Silicon Valley and generated many global tech companies such as Baidu, Xiaomi and Sina, and is home to some of China's best universities and top talent, according to JLL.

Wang Zhe, an economics lecturer at Australia-based Macquarie University, said: "The government and universities have released many policies to encourage graduates to start their own businesses, such as providing incubators or office space, which has helped build an ideal environment for entrepreneurship."

Nicolas du Cray, partner at Cathay Innovation, a global venture capital fund, said Beijing is the base for major telecom operators, internet companies and mobile service companies, as well as colleges focusing on computer sciences and mechanical engineering, which together create an innovation ecosystem.

Other cities have advantages in some special segments. Hangzhou in Zhejiang province leads in e-commerce, while Shanghai leads in financial technology, he said.

The JLL report also said innovation ecosystems within cities not only are key to driving productivity and economic growth, but also increase demands for real estate, particularly when combined with a high concentration of human capital.

The top performing cities have recorded the fastest, most vigorous office rental growth over the past decade and are attracting a higher proportion of real estate capital, it said.

According to Kelly, the real estate market impact can be already seen in diversifying sources of demand from sectors such as technology and new media.

For example, high-tech companies accounted for a larger share of leasing activity in Beijing over the last three years than other cities in the study, he said.

Wang Guanchun, chairman and CEO of Laiye, a Beijing-based intelligent robot startup, said office location plays an important role in seeking the best tech talent and the most experienced "neighborhoods".

"We are neighbors to outstanding companies such as Google, Apple, and Intel, which makes it easier to facilitate exchanges and learning, helping us become a smart robotics company with global influence."

In 2014, the central authorities emphasized the position of Beijing as the national political center, cultural center, international exchanges center and technological innovation center.

By 2030, Beijing is expected to become a new engine for innovation in the globe and spearhead the nation's innovation efforts, according to a document released by the State Council in 2016.

The city will further promote technological innovation by deepening reform of technology-related systems, training top talent, furthering opening-up and developing major innovative clusters－the Zhongguancun Science City, Huairou Science City, Future Science City and the Beijing Economic-Technological Development Area, according to a Xinhua News Agency report in April.