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In the era of global innovation, unicorn companies are reshaping traditional industries with their disruptive business models. On August 15, the National Economic Research Institute and Tianjiu Enterprise Service jointly released the "White Paper on the Growth Path of Chinese Unicorn Companies" (hereinafter referred to as the "White Paper"), in order to show the growth path of Chinese unicorns and provide strong support for the healthy development of Chinese unicorns and quasi-unicorn companies.

The White Paper points out that as a group of companies with strong innovation capabilities and huge growth potential, unicorn companies have always been regarded as an important indicator of a country's and region's innovation capabilities and innovation ecology, an important market player to enhance international and regional competitiveness, and an important engine for developing the new economy and cultivating new momentum. They are typical representatives of new quality productivity. In the past decade, China's unicorn companies have grown rapidly, relying on policy support, technological innovation, and a strong capital market. The number has ranked second in the world. According to the China National Institute of Standardization's "Guidelines for the Classification of High-Growth Enterprises" (GB/T 41464-2022), as of now, there are 523 unicorn companies and 924 potential unicorn companies in China (the above-mentioned unicorn companies are companies established between July 1, 2014 and June 30, 2024 that are less than 10 years old and valued at more than US$1 billion; potential unicorn companies are companies established between July 1, 2015 and June 30, 2024 that are less than 9 years old and valued at more than US$100 million.)

The release of the White Paper on the Growth Path of Chinese Unicorn Enterprises

However, due to the sluggish global economy in the past two years, the growth of Chinese unicorns has slowed down, and the gap with the United States has gradually widened. This means that in the face of the ever-changing international and domestic economic situation, the traditional growth model of unicorns that relies more on capital injection is facing challenges. In the new economic situation, how can unicorns face challenges and overcome development bottlenecks? Are there better models and paths to help Chinese unicorns grow healthily? This has become an important issue that needs to be solved by all sectors.

Main focus: Developing unicorns to boost new quality productivity

The white paper points out that for many years, China has always been the largest contributor to world economic growth, and new quality productivity is an important force supporting and driving the sustained growth of China's economy. During this period, unicorn companies have made important contributions.

Statistics show that from 2014 to 2023, the added value of China's strategic emerging industries accounted for more than 13% of GDP, up from 7.6%. According to the "14th Five-Year Plan" target, this proportion is expected to rise to 17% in 2025. From 2012 to 2022, the scale of China's digital economy increased from 11 trillion yuan to 50.2 trillion yuan, and the proportion of GDP increased from 21.6% to 41.5%. In 2023, it exceeded 55 trillion yuan, ranking second in the world. The above data fully reflect that the new quality productivity has played a great role in promoting economic growth.

At the same time, China's unicorn companies are shifting from model innovation to technological innovation, and the proportion of cutting-edge technology unicorn companies continues to rise. Data shows that unicorn companies are leading the development of new fields and new tracks, with integrated circuits, clean energy, and artificial intelligence tracks becoming the new main battlefields; and in hard-core technology segments such as GPU chips, semiconductor materials, hydrogen energy, new energy storage, controlled nuclear fusion, synthetic biology, and large models, unicorn companies have also made new breakthroughs.

In recent years, the country has vigorously advocated and invested in the "eight emerging industries" and "nine future industries", which are widely regarded as the core industrial fields of new quality productivity. Data shows that there are as many as 50 unicorns in the field of software and information technology services in my country, accounting for 9.6%; followed by other science and technology promotion services, with 43; and the computer, communication and other electronic equipment manufacturing industry, with 28, ranking third. The unicorn camp has played a significant role in the process of cultivating and strengthening new quality productivity. With the intensification of international competition in scientific and technological innovation in the future, the driving role of unicorns in the new quality productivity track will be more prominent.

Industry distribution of unicorn companies

Ecological status quo: from regional industrial agglomeration to global innovation development

The White Paper shows that the distribution of Chinese unicorn companies has an industrial agglomeration effect, with 523 unicorn companies distributed in 61 cities in 22 provinces, municipalities and autonomous regions (including the Hong Kong Special Administrative Region) across the country. In terms of provincial units, the top three are Shanghai, Jiangsu and Beijing, with 94, 85 and 82 companies respectively; Guangdong, Zhejiang and Shandong have 74, 71 and 22 companies respectively. From a national perspective, the wave of innovation is continuing to spread, and coverage and penetration in the central and western regions are beginning to intensify.

It is worth mentioning that while local innovation capabilities, entrepreneurial ecology, and industrial layout are gradually being realized, in order to cultivate unicorn enterprises, all localities have established a tiered cultivation system of "technology-based SMEs - high-tech enterprises - hard technology enterprises - unicorn enterprises - listed high-tech enterprises". This allows more enterprises to become the reserve force of unicorn enterprises, continuously promotes the convergence of innovative resources to the industry, and becomes the hard core support for the high-quality development of industries in various cities.

Image source: White Paper on the Growth Path of Chinese Unicorn Companies

In order to cultivate unicorn enterprises, local governments have also selected so-called potential unicorn enterprises to vigorously support their development and growth - 924 potential unicorn enterprises are distributed in 63 cities in 23 provinces, municipalities and districts across the country. Its distribution is roughly consistent with that of unicorn enterprises. In terms of provincial distribution, Jiangsu ranks first with 306 companies, Shanghai ranks second with 148 companies, Beijing and Guangdong follow closely with 140 and 109 companies respectively; only 10 provinces and cities have more than 10 companies. In terms of cities, Shanghai and Beijing rank first and second, Suzhou and Nanjing have 135 and 101 companies respectively.

At the same time, the proportion of scientific and technological innovation is also increasing. In terms of industry, 140 potential unicorn companies belong to other science and technology promotion services, accounting for 15.2%; 105 potential unicorn companies belong to research and experimental development; 77 potential unicorn companies belong to software and information technology services. Computer, communication and other electronic equipment manufacturing, biomedicine, new energy vehicles and other fields are also the main areas for the birth of potential unicorn companies.

Model breakthrough: the transition from capital empowerment to resource empowerment is the trend

As we all know, due to the combined influence of factors such as the dispersion of innovation resources, high market entry barriers, tightening financing environment and increasing uncertainty in the international situation, the number of new unicorn companies in my country has slowed down in the past two years, which has attracted great attention from all walks of life. The "White Paper" also clearly points out that due to the current decline in investment return expectations, it is not conducive to the financing of unicorn companies.

Based on the unique attributes of unicorns, which are born from innovation, grow with capital, and succeed in the market, the uncertainty from the current world situation to the macro-economy, from the primary market to the secondary market, from traditional pillar industries to emerging industries, continues to impact the venture capital market, and is also accelerating the reshaping of the unicorn ecosystem at home and abroad. How to break through the development bottleneck has become an important issue for the development of unicorns.

The White Paper points out that in the face of the ever-changing world situation and macroeconomic situation, the traditional growth model that relies on capital injection is facing challenges. The standard path of "telling a good business story - financing - burning money for users - overseas listing" in the past is basically no longer valid. If this traditional path does not work, companies need to find new channels. The "Unicorn Enterprise Growth Second Curve" that will be officially launched by Tianjiu Enterprise Service, an empowering unicorn enterprise incubation and acceleration platform, may provide a new "transition from capital empowerment to resource empowerment" idea for the prosperity and growth of the unicorn market - not only providing companies with solutions for market expansion and marketing promotion, but also helping them break through the bottlenecks of capital and resources, jointly develop the market, accelerate product iteration and business model innovation, and achieve self-growth without relying on external financing.

As the co-publisher of the "White Paper on the Growth Path of Chinese Unicorn Enterprises", the National Research Institute of Economics was initiated and established by the China Economic Times, which is supervised and hosted by the Development Research Center of the State Council. It relies on the expert resources of the national high-end think tank and the media resources of the China Economic Times. It is a high-level think tank platform with the mission of serving the country's major strategies and improving the level of scientific decision-making. Tianjiu Shared Smart Enterprise Service Co., Ltd., founded in 2011, is a unicorn enterprise incubation and acceleration platform based on the big data of millions of entrepreneurs. By promoting the development of traditional enterprises and quasi-unicorn enterprises, it revitalizes existing assets, develops incremental assets, accelerates unicorn enterprises, and helps traditional enterprises transform.