From manufacturing to fabrication : a quick history of Shenzhen

The story of Shenzhen embodies the radical transformations that have seized China since its opening in 1978.  During the 1990’s, this small fishermen village  has first become the biggest manufacturing center of the  “made in China”, producing low-quality goods for the rest of the world. 20 years later, it has now evolved into a giant distributed fabrication hub, producing original designs and new models for innovation.

From low-cost to high-end

Pearl_River_Delta_Area
Map of the Shenzhen region – From Wikipedia

With more than 12 millions habitants, the city is one of the hearth of small-scale and labor-intensive manufacturing activity in China. Garments, watches, furniture, jewelry, machinery, toy… are produced before being sold and shipped from Hong Kong, just a few kilometers away. This proximity with the biggest trading center in Asia has made Shenzhen the ideal location for equipment manufacturers (OEMs).

The declaration of the Shenzhen region as a tax-free Special Economic Zone (SEZ) has lower costs and higher flexibility of the production, leading to numerous relocation of foreign companies. To keep control on foreign newcomers, the local government has tried to increase the length of investment turnover and “embed large-scale foreign investment within big domestic firms and state-owned companies (SOEs)”1. The establishment of the Shenzhen Stock Exchange in 1990 made the Shenzhen area even more attractive, with more original design manufacturers (ODMs) starting to come, especially from Taiwan.

The rapid saturation of the local market of low-cost manufacturing leads to progressive turn towards more sophisticated products and the capability of designing and building products started to expand within the region. A lot of skills and knowledge were relocated and Shenzhen’s firms start gradually to compete not only on price but also on quality. Huge firms lead the shift towards a more creative industry in the  software (Tencent) and electronics market (Huawei, ZTE, etc.) Small and medium enteprises (SMEs) have been following quickly, with large access to foreign and public investment. After years of working on others’ behalf, the wild manufacturing jungle from the 1990s has now  developed into a highly specialized supply-chain for delivering quality goods, making Shenzhen one of the major metropolis in Southern Asia.

A deep culture of entrepreneurship

From the early 80s to our days, a very strong culture of entrepreneurship has built up the city. From 300.000 habitants in the 80s to more than 11 millions today, Chinese have been coming in masses to Shenzhen to  “jump into the see” (下海) as Chinese people were saying back then.  Meaning “to start a business”,  it describes well the feeling of this time : jumping into an ocean of unknown dangers to seek better opportunities.

 “相爱十年”
A recent TV drama called “相爱十年” features classmates from the post-80 generation (80后) arriving in Shenzhen to “make it”. Year after year, their living conditions improve gradually as they become sucessful businessmen.

xiangai2

From a very hard living in the communist danwei to a vibrant and agressive culture of world class business, Shenzhen embodies the  “Chinese Dream”. Today, the city is so young that you can barely see any elders in the streets. Everybody works hard and some streets are so busy that you can literally see people running around.

The district of HuaQiang Bei in Shenzhen. Credits : shaff (cc)
The district of HuaQiang Bei in Shenzhen. Credits : shaff (cc)

 

The “Hollywood for Makers” is in China

The incredible pace of products release and the technological frenzy of the city has brought geeks and technophiles of all kind.  Named the “Hollywood of Makers“, Shenzhen is now hosting a vibrant ecosystem of startups, creatives, developers and innovators. The encounter of the traditional manufacturing of cheap and conterfeit goods with the methods and discourse of the DIY culture has lead to the apparance of typical forms of creativity with Chinese characteristics.

makermap
Published by Seeed Studio, a Shenzhen-based open-hardware manufacturer, the Shenzhen Map for Makers is an English -language map for foreign tourists to reach places where electronics are traded, as well as incubators, hackerspaces, etc.

The open-source paradigm that fosters the renewal of a making culture  worldwide in fablabs, hackerspaces and online platforms is meeting in Shenzhen with the long experience in workshop sharing, quick prototyping and reverse-engineering of the shanzhai (山寨) manufacturers. Well-known to produce very cheap or even conterfeit goods, the so-called shanzhai industry in Shenzhen is actually made by huge clusters of small-size companies of independent constructors. Years after years,  they have implemented an efficient  and completely distributed system of knowledge exchange and on-demand supply that allows to release new versions of a product in the blink of an eye2 .

The know-how of decades of low-cost manufacturing organization is a very valuable asset for the open-hardware movement who seeks independance from the  big constructors. The availability of  manufacturing resources allow them to turn their community support into a real competitive advantage during the product development. A simple prototype that attracts attention can make the promess of delivery as soon as can it gathers basic fuding, often crowdfunding platforms.

Agile Manufacturing
On a wall of Seeed Studio office

 Kickstarter has become the first step towards production, with teams in hackerspaces specialized in video promotion. Companies like Seeed Studio have succesfully become specialized in supplying services to support those emerging models. With his motto “Innovate with China”, Eric Pan and his team take care of all steps from the prototype to the final product : industrial design, production, packaging and drop-shipping right to the door of the customers.

Shortcutting the classic angel/VC investment process, the whole product cycle from the first idea to final sales is now cut down to 1-3 months, suggesting a whole range and scale for this new model emerging in China.

  1.  from The Brookings-JP Morgan report “The 10 traits of globally fluent metro areas”  []
  2. Keane, M., & Zhao, E. J. (2012). Renegades on the Frontier of Innovation: The Shanzhai Grassroots Communities of Shenzhen in China’s Creative Economy. Geography, 53(2), 216–230. Retrieved  []

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