‘China’s Silicon Valley’ Has More Startups Now Than Ever Before

Beijing’s Zhongguancun neighborhood, sometimes called China’s Silicon Valley, is home to plenty of the nation’s largest internet companies, but it’s also a hotbed for startups. In fact, according to a report recently released by the Zhongguancun regulatory commission, as of the end of 2011 there were 4,243 startups in the area, which indicates an even higher rate of entrepreneurship than China enjoyed during the heady days of the dot-com bubble. And although the report doesn’t contain more recent data, I suspect that number is probably even higher now, especially given the increased penetration of smartphones and the reduced overhead costs of app development.

The funding situation has also gotten much better for Chinese startups, though it’s still no cakewalk. From 2010 to 2011, for example, the number of startups in Zhongguancun grew by 17 percent, but the scope of total angel funding went up 248 percent, meaning there is a lot more angel money flowing into the startup scene than there used to be. In fact, the report suggests that since the dot-com boom, the general pattern has shifted from startups chasing investors to investors chasing startups. “In the past, there wasn’t enough capital; now the problem is that there aren’t enough great startups [for all the capital available],” a representative of the Zhongguancun regulatory commission told the Beijing Daily.

But interestingly, the report also indicates an ideological shift of sorts, asserting that around 60 percent of today’s founders are chasing self-realization rather than investment capital. That’s not to say that Chinese founders are turning away money, of course, but when asked why they’re pursuing a startup instead of working their way up through a regular career, apparently more founders talked about realizing their own dreams and creating something that reflects themselves than talked about wanting to be rich.

And, in news that shouldn’t come as any surprise, Zhongguancun’s tech entrepreneurs are also remarkably youthful, with 47 percent of founders under the age of 34.

(Beijing Daily via TechWeb, image via China Daily)