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USA, China to lead tech innovation in next 4 years

Technology executives believe that the United States and China are the top two countries with the greatest potential to drive technology breakthroughs that will have a global impact in the next four years.

KPMG surveyed 811 technology business leaders globally from technology industry startups, mid-sized to large enterprises, venture capital firms and angel investors in order to identify disruptive technologies, innovation trends, and the scope of change. The survey does not represent any African countries however is an indicator of trends in other global markets. KPMG will commission a similar survey focusing specifically on Africa towards the end of 2013.

In a change from last year’s survey, 37 percent of the respondents said the United States shows the most promise for disruptive breakthroughs, while 24 percent cited China, and 10 percent predicted India, followed by Korea (7 percent), Japan (6 percent) and Israel (6 percent). The U.S. and China tied for the top spot in the 2012 survey.

‚”China continues to innovate at impressive speed. We believe that domestic consumption in the country will drive the majority of new innovation. China will innovate for China’s sake. This is supported by Chinese consumers who are driving the desire for local brands, which are unique to this market,‚” said Egidio Zarrella, Partner, Clients and Innovation Consulting, KPMG in China ‚”We see Chinese organisations increasingly establishing innovation hubs where their research and development can thrive. We believe this will also help to bridge any gaps where Chinese brands may face difficulties when looking to expand into the global market.‚”

Survey respondents’ belief in the U.S. as the top tech innovator in the global ranking translated to fewer executives (33 percent) than in 2012 (44 percent) saying it’s likely that the technology innovation center of the world would shift from Silicon Valley to another country in the next four years, most likely to China.

Frank Rizzo, Technology sector leader at KPMG in South Africa, believes that China’s growth in the technology sector could be beneficial for Africa as China and Africa are trading more.

‚”Since China is seen as most likely to become the leading innovation centre going forward, this could be beneficial for Africa if the relations extend to technology investment,‚” notes Rizzo.

Countries’ innovation confidence index:

This year the KPMG survey debuts a confidence index gauging each country’s prospects for tech innovation. The index is based on tech leaders in each market rating their country on ten success factors including talent, infrastructure, incentives, and capital.

Of the 10 factors assessed globally in this technology innovation confidence index, the highest marks on average were given for talent supply and technology infrastructure. The lowest rating was for government incentives, judged weak by more than one-third (36 percent) globally.

India grabbed the country lead with an index of 72. The high confidence India’s technology leaders have in their own country’s prospects spans several of the 10 factors. High marks were given for talent, mentoring, ability to drive customer adoption, technology breakthroughs, and technology infrastructure with the lowest rating reserved for government incentives.

In the South Africa context, Rizzo believes that availability of talent is still a challenge. ‚”For SA to get on the global map, we need to get our talent pool skilled up in technology, starting from the education base all the way up to up-skilling of professionals,‚” says Rizzo.

In terms of access to capital, Rizzo notes that while capital may be available, perhaps the issue is the question of prioritisation. ‚”At the moment, African countries are focused on building infrastructure such as dams, roads, etc. and not necessarily on Internet connection upgrades. Also, the cost of technology is still an inhibiting factor for most African countries,‚” notes Rizzo.

Israel ranked second (71), as the country received high ratings from its tech business leaders for technology breakthroughs, talent, technology infrastructure, and mentoring and access to innovation network, while government incentives earned the lowest rating.

The U.S. ranked third with an index of 65, as U.S. respondents judged their own country’s tech prowess the strongest in tech infrastructure, access to alliances and partnerships, talent, and technology breakthroughs, and weakest in educational system and government incentives. China’s score of 64 was driven by its highest marks in talent, capital, and mentoring and access to innovation network but China’s tech leaders rated their country low on educational system.

As can be seen in South Africa, Rizzo believes that most governments in Africa have a will to boost innovation and want to invest in technology, but experience difficulties in implementation and how this is executed.

‚”However, the results of the upcoming African version of this survey on emerging perspectives about technology innovation trends will give a clearer picture on where Africa stands,‚” concludes Rizzo.


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