Shenzhen Still Driving Innovation 40 Years Later

Why Shenzhen real estate stays pricey and fourth-tier cities watch their youth flee.

Yet, like the rest of China, Shenzhen suffers from many side-effects from the past three decades of rapid industrialization, including sewage-choked rivers, grim and grimy factory zones on its fringes and sky-high property prices. The collapse of a mountain of construction waste last year killed nearly 60 people, exposing cost cutting and a lack of oversight.

Such issues haven't deterred young entrepreneurs like Jasen Wang, who moved to Shenzhen six years ago from Xian, another industrial city in north-central China, to start a robotics company. Wang joined an inaugural class of startups mentored by Hax, a hardware "accelerator" run by San Francisco-based venture capital fund SOSV that brings hardware entrepreneurs from around the world to Shenzhen twice a year for intensive research and development.

Now Wang's company, Makeblock, has $6 million in backing from Sequoia Capital and 160 staff making his robot kits, which look something like old-fashioned Erector sets.

"There's a lot more opportunities for entrepreneurs" Wang says of Shenzhen. "That's why a lot of young people want to come here to take risks."

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