Mobile innovations key to China's economic transformation

In 2014, Qualcomm announced an expansion of its longstanding relationship with Semiconductor Manufacturing International Corporation, one of China's largest and most advanced semiconductor foundries. The partnership has led to SMIC's major milestone of producing high-performance, low-power mobile processors using cutting-edge advanced 28nm technology.

According to Tzu-Yin Chiu, CEO and executive director of SMIC, the collaboration with Qualcomm represents a significant long-term growth driver for SMIC in support of Qualcomm and their customers globally.

In both developed and emerging economies, mobile technologies are delivering enormous benefits in forms of connectivity to consumers, small and medium-sized enterprises, and the world economy.

Qualcomm sees China as a source of innovation with both local and global impacts, therefore, it has created a China-specific investment fund of $150 million to further the development of semiconductor and mobile technologies for the Internet, e-commerce, education and health industries. The company has already invested in more than 20 enterprises based in China.

Mobile GDP

A new report by BCG based on surveys in Brazil, China, Germany, India, South Korea and the United States found that mobile technologies account for 3.7 percent of China's GDP, or $365 billion - the second-largest in the world.

That figure is poised to grow to 4.8 percent of its GDP by 2020 due to the global expansion of China's manufacturing capacity and its strong patent position in mobile technologies.

China is now the third-largest source of mobile technology patents worldwide, according to the report commissioned by Qualcomm but produced independently by BCG.

The mobile value chain generated revenues of almost $3.3 trillion worldwide in 2014 and is directly responsible for 11 million jobs globally.

Due to wide deployment of affordably priced 2G and 3G services, Chinese consumers have rapidly adopted mobile technologies. China is now the world's largest smartphone market, and Chinese consumers value mobile technologies at $3,300 per year, or 43 percent of the average annual income.

Mobile technology also levels the playing field for small and medium-sized enterprises, the report found, which is in line with the Chinese government's desire to boost the development of China's lackluster SMEs. "Mobile technology has been a huge driver of economic growth - creating jobs and improving consumers' lives," said David C. Michael, a senior partner and a coauthor of the report.

"But much more innovation is still needed. Policymakers have an important role to play in sustaining innovation and R&D investment in mobile technologies."

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