A CASE OF GEO-INNOVATION IN THE 21ST CENTURY: Italy’s Science, Technology and Innovation Partnership with China.

The report is structured as follows. Section 1 frames the Sino-Italian STI partnership against the backdrop of geo-innovation and introduces the recent developments of China’s domestic STI scenario following the adoption of two new strategic plans – the Belt and Road Initiative and the Made in China 2025 – under the new presidency of Xi Jinping. Then a brief account of the implications resulting from the two new plans on China’s STI bilateral relations with the West is given, with a focus on the Italy-China STI bilateral relations. Section 2 first illustrates the history of Italy-China STI relations and provides deeper insights on the type of STI initiatives and collaborations between the two countries at the institutional level, involving universities, research institutes as well as start-ups and SMEs. Section 2 then provides an analysis of the trends in FDI flows between Italy and China in the years 2010-2020, and the results are elaborated to give an account on the current state of affairs in the major industries where FDIs are realized. Section 3 illustrates cooperation between Italy and China in the green industries as a case study, first by looking at the new Chinese market for environmental protection as the result of the reform policies introduced by the three most recent Five Year Plans. The Section then discusses business opportunities for Italian firms in the Chinese green industry market and in the context of sustainable development of PR China.

 

To help understand the factors influencing performance, we interviewed 100 senior executives in industrial products and services (including automotive manufacturers and makers of other large durable products like airplanes and construction equipment) from a range of geographies about their experiences in creating value through M&A. All participants in this survey had made at least one significant acquisition and one significant divestment in the past 36 months. The survey included a combination of qualitative and quantitative questions and all interviews were conducted by telephone. All responses, where not attributed to our clients, are anonymised and presented in aggregate. This report draws on the insights gleaned from the study and the interviews, and on our own experience helping clients navigate the deals landscape. It offers a roadmap for how leaders should approach value creation within their organisations to deliver the full return potential on the transaction.

 

As hubs of social development, cities are faced with a myriad of diverse opportunities, bolstered by economic growth and scientific advances, as well as multiple obstacles and challenges. 2020 has brought challenges and uncertainty for a great number of cities, and has also presented us with a chance to slow down the pace of modern life and reconsider whether cities, in the midst of this rapid development, really possess the resilience to stave off risks and overcome challenges. Since 2014, the annual Chinese Cities of Opportunity report, jointly published by PwC and the China Development and Research Foundation has continued to monitor opportunities arising from China’s urban development and track the progress of its urbanisation from different angles and perspectives. For each edition, we adjust our research priorities subject to the social and economic priorities of the year in China. This year, against the extraordinary backdrop of the COVID-19 outbreak, the 2020 edition pays attention to urban resilience and the sustainable development of cities, while incorporating some additional key elements and angles such as the refined management of cities and smart cities.

 

Our study combined a comprehensive survey of Chinese consumers, in-depth research, and observations from our work advising companies in China. The survey was conducted from May to July 2019, and is part of a series of comprehensive surveys of Chinese consumer behavior conducted by McKinsey since 2005. The survey sample included approximately 5,400 respondents from 44 cities, representing approximately 90 percent of China’s GDP and more than half of its population.
We conducted online research with respondents, covering consumers’ general attitudes and purchasing behavior, key trends regarding their consumption patterns and leisure habits, and attitudes toward life, success, money, and health. The survey included a deep dive into apparel, cosmetics, and fast moving consumer goods categories, including food, personal care, and household products. Our research was supplemented by additional research that McKinsey is conducting on consumer sentiment in 26 countries. Results from our 2019 Global Sentiment Survey are available on mckinsey.com.

 

We have all witnessed how digital advancement and eCommerce have transformed China’s retail landscape and brought incredible growth. Yet, increasingly the question on everyone’s minds now is how much longer digital innovation can further fuel the growth in retail, and what the next growth driver might be. Some would suggest that in the future “new retail” might be the key catalyst to unlock the next wave of retail growth.

Through our extensive retail work in China we have increasingly observed that new retail has extended into broader meanings and applications across the entire industry value chain. It is the mean rather than the end to reflect the constant evolution of customer needs and preferences as driven by social, demographic and technological trends. In this article, we set out to explore three core propositions from our first-hand dialogue with many leading internet giants, retailers and investors.

 

China’s total logistics expense reached Rmb13.3 trillion in 2018, making it the world’s largest logistics market. As the flow between the point of production and the point of consumption, logistics plays a tremendous role in China’s economic development. In light of rising e commerce, new retail and advanced manufacturing sectors, along with the participation of new technology, new ideas and new capital, the traditional business model of low efficiency and sloppy management has undergone a huge transformation. Subsectors such as express & freight, warehousing & storage and intelligent informatisation have also evolved and experienced rapid integration. Between 2016 and H1/19 , there were 329 M&As related to China, with deal value totaling Rmb465.2 billion. In the current environment of consumption industrial upgrading, the logistics industry is seeking to lower cost and improve efficiency.

 

PwC conducted 1,378 interviews in September and October 2018 with CEOs in 91 territories.

Of these interviews, 204 were conducted with food industry CEOs from organizations in 58 territories, most of whom came from consumer goods and retail sectors. Organizations from wholesale, agriculture and food service sectors were also represented among the food industry respondents.

The food industry is being transformed by changing customer behaviour and innovation. Of all the world’s markets, China’s retail food and restaurant sectors have seen the fastest introduction and adoption of new technologies.

Food industry CEOs are confident in their companies’ own growth prospects over both the near term and the long term.

 
 
 
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