Silicon Valley was long considered the world’s crucible for innovation.

But Shanghai, the face of China’s economy and financial capital, is set to compete head-to-head with San Francisco and transform itself into a hub for science and technology innovation, with a specific focus on  integrated circuits, artificial intelligence, and biomedicine, and a clear appetite for new talent and technological breakthrough.

On day 2 of our upcoming Innov8rs Shanghai (26-27 June 2019), we host a unique and immersive experience for our tribe to explore Shanghai's ecosystem with visits to 7+ innovation hubs, meetings with leaders and entrepreneurs, and targeted knowledge sharing sessions facilitated by experts.

We had a conversation with Nishtha Mehta, Corporate Innovation Coach, Executive Leadership Trainer and Founder of CollabCentral, co-host for this Shanghai Innovation Expedition, about the key things to get excited about on our upcoming journey to Shanghai - a city of unprecedented connectivity and change.

The rise and rise of Shanghai

Why has Shanghai recently become such a world-class innovation hub? This is partly a byproduct of global interest in homegrown brands like Tencent, Alibaba, DJI, Xiaomi, Huawei, which have carved a name for the city. But supportive government policies such as ‘Made in China 2025’ are also fueling the city’s private sector development, raising R&D spending, training scientists and engineers and enabling Corporates to build their own research innovation hubs.

This has catalyzed a risk-taking appetite and a design mindset which has given China the ability to rapidly scale. Patents filed for intellectual property here have skyrocketed, with top corporate applicants including telecom giants Huawei and ZTE.

For China, innovation is now on the policy agenda rather than being considered a natural byproduct of growth.

The country is divided strategically into 12 free trade zones (FTZs), with the biggest and most commonly used including Shanghai, Guangdong, and Tianjin. President Xi Jinping has breathed new life into Shanghai’s FTZ, taking bold steps to facilitate more trade and investment to turn the megapolis into a free marketplace like Hong Kong, where greater cross-border commodity and fund flows are encouraged to spur business activities.

With a focus on high-tech and finance alongside offshore trade, this top-down government-endorsed approach to innovation means that investment, support, and incentives are given to start-ups and corporates who set root there; then test-and-learn their way to success. It’s a planned economy mentality, with preferential policies. Ultimately, though, these policies are designed to encourage market behavior: cultivating strategic industries must not take precedence over the decisions of entrepreneurs - decisions which set the trajectory for innovation.

With Shanghai’s strategic focus on software development and as a hotbed for consumer brands, you can see the nation’s innovation reform trickle down from politics into everyday life.The belief that everything should be connected has transformed Shanghai into a living, breathing digital city.

Data, retail and customer experience

The prospect of an economy based on the Internet of Things, big data and customer-centric engagement has turned Shanghai into a megapolis for new retail and a stronghold for customer experience. Given that context, it's crucial for corporate innovators in all industries and from all corners of the world to know what's actually happening in the labs and on the streets of Shanghai.

As such, Nishtha and her team designed a full-day Shanghai Innovation Expedition around the key trends mentioned above. She explains:

“It’s a great opportunity for corporate innovation leaders to get inspired, expand their horizons and have an outside-in dialogue beyond their internal view – the key cornerstone of innovation capability building, upskilling and identifying partnership opportunities.

One of the insightful centers we’ll visit is Shanghai Data Exchange, which is responsible for promoting commercial data circulation and data interconnection, government data and business data integration applications for many large corporate brands. Here you’ll be able to see the live data in action – like footprints in demographics and preferences of customers across the city’s luxury department stores on Nanjing Xi Lu – the busiest shopping street of Shanghai.

Even the footprints across Disneyland Shanghai – the profile of the visitors, where they come from, what they are eating, and which rides they’re choosing. Just imagine the value of these deeper insights and the potential to use that to deliver better customer service. To see big data in action is like nothing else."

Retail brands are experimenting rapidly. With China’s new retail, cashierless and cash-less stores, face pay stores, it is setting the tone for the rest of the world.

"This is not about a look-see safari, but a hands-on experience and dialogue-based insights expedition.  Amongst the retail venues we'll visit are Alibaba’s Hema, including a Hema robot dining experience, and Tencent’s Yonghui. One of the key highlights of both experiences is how they deliver the ultimate convenience through retail tech: whilst you can use the Hema or Alipay app to pay via app at a checkout point in store, Yonghui’s own app and WeChat offers a scan-pay-go service directly from the isles. These players are e-imagining stores, and removing the friction of visiting a cashier."

Co-creation and ecosystems are key to success

Nishtha goes on to explain how the ecosystem model works: brands and platforms collaborate to co-create customer experiences, and this contributes towards a faster in-market learning curve, and scaling efficiency.

"In China, many new models of innovation and better user experiences are a result of co-creation from the get-go. Unlike the west, where much is based on expert recommendations or by long, drawn-out consensus processes, here in China things are trialed and pushed into iteration mode fairly quickly. Cross-functional project taskforce teams work best: these should be independently run, with decision-making autonomy, and minus any typical corporate hierarchy structures.

You cannot succeed as just a standalone in China: everything is integrated. You have to partner with tech brands like Tencent and Alibaba. You have to build your corporate capabilities not individually but through multiple ecosystem partners.”

Just five months ago, Starbucks China launched a first-of-its-kind virtual Starbucks store in China. This groundbreaking digital innovation collaboration with Alibaba ecosystem unlocks new levels of consumer engagement unseen in the marketplace today.

By transcending the traditional limitations of a single-app to provide customers a unified one-stop-shop, Starbucks’ digital experience works across the Alibaba ecosystem, including Taobao, Tmall and Alipay.

The virtual store is brought-to-life by an online management hub, developed specifically for Starbucks by Alibaba, to integrate the Company’s market-leading digital experience offerings. This includes “Starbucks Delivers,” “Say it with Starbucks” social gifting and the Starbucks® Tmall flagship store, integrated with one seamless and easy-to-use interface not only for Starbucks customers, but more than 600 million mobile monthly active users on Alibaba’s China retail marketplaces.

"As part of the Shanghai Innovation Expedition, we’ll visit the Starbucks Reserve Shanghai Roastery. This vast virtual store is brought-to-life by an online management hub and storytelling. Developed for Starbucks by Alibaba, you can see the company's digital experience offerings manifested in many ways: it's a playground for new consumer engagement.'"

And a mere week ago,  Unilever Dove Men + Care, the premium range of personal care products for men launched a new co-created innovative product format along with Xiaomi – China’s leading electronics ecosystem brand: a motion sensor enabled self foaming device. The agile teams on both sides came together as a taskforce team, and within a matter of months established the right mindset prototype rapidly, and cross-pollinate capabilities on both sides - from R&D/product, to hardware, to channel activation and user engagement.

While Xiaomi offers its hardware tech expertise and its ecosystem channels, Dove offers its liquid/formulation tech and branding power. This gives birth to a beautiful and intuitive new product experience. It starts with mobilizing and engaging Xiaomi’s existing loyalists who get first access as part of a 6-day crowdsourcing campaign at a special deal price. Or online users can pledge RMB 1 in support of this, which will help to gauge market demand and enable decision making on scale-up plans. Within a 6 day period, the crowdsource campaign exceeded its target by over 900%. In months to come we will see its expansion across online and offline.

"This is also reflected in the way that corporates huddle together for breakthrough ideas: many corporates, for example, will move their innovation teams (in the form of incubators, accelerators or taskforce teams) outside of their own corporate space to a high tech innovation park or co-working space.

This means they can benefit from a divergent thinking space, source of knowledge and networking opportunities - including open innovation events.

During the Shanghai Innovation Expedition, you'll hear more first-hand stories of how corporates truly embrace co-creation and engage in ecosystems for better and faster innovation outcomes.

From learning labs to experiential spaces, this two-day journey lets you in on the secrets of China’s unexpected innovators, with first-hand accounts on harnessing the potential of this blossoming innovation hub. We hope to see you there so you can take a glimpse into the future with us!"

If you're interested in joining the Shanghai Innovation Expedition as part of Innov8rs Shanghai, and want to know more, contact us via hans@innov8rs.co. You can find the latest agenda for the full conference via https://innov8rs.co/shanghai/speakers-sessions/