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INNOVATION and entrepreneurship will be among the key pillars driving China's new engine of growth.
Its 13th Five-Year Plan places strong emphasis on innovation and entrepreneurship. A company's ability to leverage this wave of innovation will become an increasingly important differentiator to determine success in this market.
In China, the innovation scene is vibrant and advanced. Alibaba, Baidu, Huawei, Tencent and Xiaomi are now globe-trotting household brands. These companies are dominating the China market, internationalising overseas and acquiring latest technologies worldwide.
McKinsey estimated that by 2025, new innovation opportunities could contribute US$1.0 trillion to US$2.2 trillion a year to the Chinese economy - an equivalent of a quarter of total GDP growth .
Backed by favourable policies and incentives, entrepreneurship is flourishing in China, driving further breakthroughs in technological and business innovation.
At the forefront of the innovation drive is Beijing's Zhongguanchun, often referred to as China's Silicon Valley. Some notable companies from Zhongguanchun include Lenovo Group, Baidu and Xiaomi. China is witnessing an unprecedented surge in new technology companies, with nearly 50 startups birthed daily in Zhongguanchun in 2014.
The high-tech boom has also hit Shenzhen. Shenzhen's Nanshan iPark, a government-supported industrial park with comprehensive infrastructure and sustainable innovation eco-system, has nurtured more than 100 high-tech companies; its annual value reached RMB 24 billion in 2015.
Innovation creates disruptive trends, changing consumer behaviour in the process. The sharing economy is a good example of a disruptive trend. Empowered by technology and social networks, it encourages consumption through the sharing of resources.
The sharing economy market in China was worth RMB 1.5 trillion in 2015, with peer-to-peer finance, accommodation and car-sharing services recording the fastest growth.
One Singapore company in the sharing economy space is Chope, which has enjoyed success by innovating and challenging the market norms. The real-time restaurant booking platform, which connects diners with its partner restaurants, has already made its foray into the Chinese market.
How then, can other Singapore companies ride on this new wave of innovation-driven growth? Singapore companies now need to rethink how their businesses can stay relevant. They must be ready to change and transform their businesses as industry boundaries are constantly being redefined by disruptions.
Some are already transforming. Recognising the importance of business model innovation, CapitaLand has been pursuing its own Internet Plus strategy to create new growth engines.
As the region's leading developer, owner and manager of physical shopping malls, CapitaLand is using its real estate intelligently, and integrating them with the online world.
CapitaLand runs a unique multi-mall, multi-store customer-loyalty programme called CAPITASTAR for its malls, which allows it to gain insights about customer shopping behaviour, and helps it improve the shopping experience and increase sales for its retailers.
Surbana Jurong is another company which is riding on China's innovation-driven growth. Following the merger between Surbana International Consultants and Jurong International in 2015, Surbana Jurong now possesses the expertise and track record to provide a whole range of services from economic positioning studies, master-planning, infrastructure designs down to architectural and engineering services and new growth areas such as smart city solutions.
Many new opportunities are also springing up with more Chinese companies now looking to internationalise. Singapore, with its deep knowledge and extensive network in Asean, can be an effective launch pad for these companies to enter the market.
Ride-hailing platform Grab recently tied up with Alipay on a cross-border payment solution that will allow Chinese tourists in Singapore and Thailand to pay their fares in RMB, instead of using credit cards or cash. Through the collaboration with Grab, Alipay plans to expand this solution to other markets in South-east Asia.
China's innovation train is already in motion. Singapore companies need to act quickly to catch this new wave of growth. Innovate to stay ahead of the game, or risk being obsolete and left behind.