Local tech companies have little to fear over recent media reports that China is looking to replace foreign technology with homegrown solutions, the CEO of Invest Ottawa said Thursday.
The reports suggest China will remove foreign technology from its banks, government offices, and state-owned agencies by 2020 to deal with potential cyber-security threats.
But Bruce Lazenby says most Ottawa tech companies working at Invest Ottawa’s ZDG International Incubation Centre, which helps build companies that hope to enter the Chinese market, are working in the life sciences and cleantech industries, where security is not considered to be as great a concern.
Mr. Lazenby says he tries to get to China once or twice a year. During his last visit, he says, the Chinese kept talking about three countries: Canada, the United States and Germany.
“Time and time again, in every speech, so they see those countries as innovative countries where they can find innovative products that they can deploy into their markets,” he says.
Mr. Lazenby says a Chinese move to homegrown solutions is partly a reaction to the U.S. government’s decision to basically ban Chinese companies Huawei and ZTE from doing business with it, and partly just because of a desire to promote their own companies.
“Presumably if the equipment that you are installing in your government is owned and operated by companies within your country’s boundaries, you have a better level of control,” Mr. Lazenby says. “I’m not a security expert, but that logic rings true to me.”
China continues to be a desirable market for Ottawa tech companies, Mr. Lazenby says, because of a massive amount of available investment capital and a potential customer base of 1.3 billion.
China still will have to rely on foreign technology in many sectors because western technology, in many cases, is more advanced, he says.
But Mr. Lazenby warns the Chinese could catch up quickly if they wanted to. He says on his last trip to China, he heard more rumblings about growing innovation within the country’s borders.
“The Chinese will acknowledge that they, over the last couple decades, have become really good at building products that we have invented faster, better and cheaper,” he says. “But now, what they want to do is go up the food chain. They don’t want to be the next Cisco. They want to be the next Silicon Valley.”
Mr. Lazenby says he expects to be back in China again in the spring, looking for ways to collaborate with the Chinese more deeply – for example, looking to gain more “appropriate” Chinese investment into Canadian companies.