The “Hangzhou Phenomenon” in the Hardtech Wave
As we enter 2025, Hangzhou continues to attract global attention in the technology industry through groundbreaking innovations in hardtech: DeepSeek ‘s open-source DeepSeek-V3 model competes with international giants, Unitree Robotics ‘ four-legged robot overcomes obstacles with human loading and is mass-produced abroad, and Brain-Computer Interface (BCI)’s brain-computer interface technology finds application in medical rehabilitation. These companies have one thing in common: “hardtech” – they focus on highly specialized fields such as artificial intelligence, robotics and brain-computer interfaces . They use vertical application fields as a starting point, break through technological barriers, transform industrial logics and stimulate in-depth reflection on China’s innovation paths in the high-tech sector.
How do hardtech companies in Hangzhou manage to rise from “technology followers” to “scene definers”? What implications does their innovation model have for the future of China’s technology industry? In this issue, we invited Professor Guo Bin from the School of Management of Zhejiang University to analyze the innovation practice of the “Six Little Dragons of Hangzhou” from different perspectives and decipher the logic and inspirations behind them. Our goal is to explore the success factors of the hardtech breakthroughs in Hangzhou.
- Space-Time Resonance: The Agglomeration Effect of the Hardtech Boom
The explosive growth of Hangzhou’s “Six Little Dragons” (游戏科学 Game Science Interactive Technology Co., Ltd., 深度求索 DeepSeek, 宇树科技 Unitree Robotics, 云深处科技 DEEP Robotics, 强脑科技 Brain-Computer Interface (BCI) ，群核科技 Manycore Tech Inc) is not an accident. Rather, it is the result of a dual concentration of technological maturity, market demand and regional ecosystem in time and space .
Temporal dimension:
Over the past five years, policies promoting hardtech as well as iterative developments within these technology fields have created favorable external conditions for this growth. At the same time, enterprises’ continuous investment in hardtech has entered the outcome transformation phase. The development of hardtech requires long-term accumulation. In both AI models and robotics control, the underlying research work has crossed the usability limit. Hangzhou’s enterprises seized the opportunity when technological maturity and market demand synchronously approached their critical point.
Spatial dimension:
Hangzhou’s unique ecosystem provides start-ups with a low-cost environment for experimentation and collaborative innovation. Hangzhou is friendly to young talent, has a lower cost of living than metropolises, and offers an ideal environment for entrepreneurs through support programs. In addition, Hangzhou has a strong software and internet landscape that reduces the costs of trial-and-error processes. This regional agglomeration accelerates technological spillover and resource integration, forming a closed loop of talent, technology, and capital – the perfect prerequisite for the hardtech boom.
- Vertical Breakthrough: The Innovation Advantages of Small Firms in Niche Markets
Unlike the “platform monopolies” of the Internet age, hardtech companies are more dependent on vertical application fields. There is a natural division of roles between large and small companies: while large companies have an advantage in capital-intensive and widely used applications, small companies dominate in specialized vertical markets. Especially in the early development phase, they can flexibly explore specific scenarios and exploit market opportunities. This complementary relationship forms a comprehensive innovation ecosystem and offers space for vertically focused start-ups to challenge established corporations.
Chinese companies are particularly good at penetrating individual segments and scaling their market presence. China’s rich application scenarios and enormous market size provide testing grounds for technological innovation, enabling even specialized niche markets to give rise to global innovation companies.
- Opportunities in the crisis: The double effects of technological decoupling
Against the backdrop of global technological decoupling, Chinese hard-tech companies are facing unprecedented challenges and opportunities. The intensified technology blockade by the United States is forcing Chinese companies to redesign their globalization strategies. In the short term, this pressure is driving the closing of technological gaps and new opportunities in the long term.
In the long term, however, the challenge remains: China shows strong performance in technological iteration but has deficits in science-based original innovation. Without breakthroughs in scientific originality, reaching the next level remains difficult.
To minimize risks, many companies are turning to “ecosystem expansion” abroad. The targeted policies of the Zhejiang government and the cooperative “cluster model” have proven to be effective strategies. Through this industrial cooperation, companies share risks and resources, which not only increases the competitiveness of individual companies, but also strengthens China’s global supply chain competence.
The practice of the “Six Little Dragons of Hangzhou” shows that technological innovation cannot be viewed in isolation. Rather, the collaboration of various factors is crucial: government policy, basic research, vertical scenario development, resource integration and innovative business models . The efficient coordination of these elements will be the key to the future innovation and development of Chinese hard-tech companies.
Source : Ruihua Institute for Innovation Management