2015/01/02

Gongkai, Shanzhai and Electronics Innovation

A recent post by bunnie huang about gongkai and a related post from frog design about shanzhai highlight why Shenzhen is the best place to be if you're a hacker who wants to ride the leading of electronics, wearable computing and the IoT (Internet of Things).

bunnie explains gongkai this way in his 29 Dec 2014 post:
"...Gongkai is more a reference to the fact that copyrighted documents, sometimes labeled “confidential” and “proprietary”, are made known to the public and shared overtly...this copying isn’t a one-way flow of value, as it would be in the case of copied movies or music. Rather, these documents are the knowledge base needed to build a phone using the copyright owner’s chips, and as such, this sharing of documents helps to promote the sales of their chips...This fuzzy, gray relationship between companies and entrepreneurs...has a “network” view of IP and ownership: the far-sight necessary to create good ideas and innovations is attained by standing on the shoulders of others, and as such there is a network of people who trade these ideas as favors among each other. In a system with such a loose attitude toward IP, sharing with the network is necessary as tomorrow it could be your friend standing on your shoulders, and you’ll be looking to them for favors..."
frog design, in an older but undated post, explains shanzhai thusly:
"The term “Shanzhai” refers to a part of China’s informal industry that is known for fast product cycles as well as its tendency to seek inspiration in...successful products...we see many of our international and Chinese clients intimidated by the speed of Shanzhai and bewildered by the apparent ruthlessness with which they imitate, alter, and remix features, designs, and even entire products. Shanzhai manufacturers can design, build, and take mobile phones to market in as little as 40 days, while “legitimate” manufacturers take longer to merely secure and approve their budgets for similar initiatives...By not committing to established industry alliances and regulations, Shanzhai manufacturers can afford to focus on the actual customer to meet the demands the “regular” players leave unmet...quite a few Chinese Tier 1 and 2 OEMs have evolved from Shanzhai and are now successful legitimate businesses...the Shanzhai industry...might very well be a hotbed of young businesses that are learning, growing, and experimenting “in confined water” so to speak—sanctioned only by the customers they serve..."
When gongkai and shanzhai are combined with reasonable cost advanced personal manufacturing equipment, components and services, it allows the concentrated populations of Steven Levy and Paul Graham’s hackers in the the unparalleled regional electronics ecosystem of Joi Ito and bunnie’s Shenzhen to become Schumpeter’s swarming creative-destructive innovators of Christensen’s ‘Innovator’s Dilemma’ who shorten the development cycle by leveraging any relevant and recent components, products applications, tools and technologies to deliver low-cost and low-to-medium-volume new products whose success can be strongly or primarily influenced by how well the product meets consumer needs and desires.

Electronics hackers and makers can build amazing things anywhere in the world, but Shenzhen appears to be the 2015 electronics innovation equivalent what the Silicon Valley was for personal computing innovation in the 1970s and 1980s.

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