Posted by: Bruce Einhorn on December 11, 2009
The technology gap between Taiwanese and Chinese companies is closing, according to a new survey by Deloitte. The consulting firm yesterday released its annual report on the 500 fastest-growing tech companies in Asia, as measured by revenue growth, and once again Taiwan came out on top, with four companies in the top 10 and 99 total on the list. No great surprise there, since Taiwan is famous for its steady supply of high-growth tech companies.
What is interesting, though, is the impressive rise of China in the Deloitte rankings. Four mainland Chinese companies also make the top 10, including the No. 1 company, online retailer Vancl.com. And with 97 companies overall, China is now virtually tied with Taiwan. That’s a big jump: Only two years ago, the number of Chinese companies on the Deloitte list was about half that of Taiwanese.
“We’ve seen a significant upswing in the number of Chinese companies,” says Jolyon Barker, Deloitte’s global managing partner for technology, who notes that Chinese companies targeting domestic demand have a big edge. “We are starting to see China beginning to compete at an R&D level and an innovation level in a market that, of course, is colossal,” he says.
China’s rise isn’t necessarily a setback for Taiwan. Many of the fast-growing Chinese companies have Taiwanese ties, points out William Chou, managing partner for technology in Deloitte’s China office. As evidence of the rapid integration of the two sides, Chou cites estimates that more than 1 million Taiwanese (out of a total population of just 23 million) now live in the Shanghai area. “This is one economy,” he says. “You can’t distinguish between these two areas. The market is in the mainland and the talented people follow the market.”
So who’s to say what’s really a fast-growing Chinese tech company and what’s a fast-growing tech company based in China but run by people who have moved across the Taiwan Strait? Either way, China wins. For years, people who follow China’s tech sector have predicted that the world will see a surge in innovation coming from the mainland. With a few exceptions (Huawei and ZTE come to mind), that hasn’t happened. The latest Deloitte report could be a sign that the long-awaited wave of innovative Chinese tech companies might finally be upon us.