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In 2011, China (Nanjing) Software Valley Management Committee was officially established in Yuhuatai District. In just 13 years, 4,462 “big companies” including Huawei, ZTE, BMW ArcherMind, and Yunmanman have gathered together to create about 35% of the city’s software and information service industry output value with 1% of the land area , becoming the development center of Nanjing. The top level of new quality productivity.
So, why is the Software Valley in this corner of the country so “hard”?
As the first famous software city in China, software is Nanjing’s largest industry and can be called a “trump card” in Nanjing’s hands .
In 2010, the scale of Nanjing’s software industry exceeded 100 billion for the first time; in 2023, the city’s software business revenue exceeded 800 billion yuan, a year-on-year increase of 9.5%, ranking first in the province and among the best in the country ; it ranked 4th in the country in the evaluation of famous software cities by the Ministry of Industry and Information Technology .
Let’s take a look at the financial background of Nanjing’s software industry?
At present, Nanjing has formed an industrial cluster with China (Nanjing) Software Valley, Jiangbei New District Research and Innovation Park, and Jiangsu Software Park “one valley and two parks” as the core, and supported by Xuzhuang High-tech Zone, Jianye High-tech Zone, Gulou High-tech Zone, etc. .
The Software Valley, located in Yuhuatai District, is the “best” in Nanjing and even the entire Jiangsu software industry sector.
Since its establishment 13 years ago, Software Valley has insisted on drawing a blueprint to the end, and has now formed a business covering four major advantageous industries [communication software and operation and maintenance services, Internet+, cloud computing big data, and information security] and four emerging industries [information technology application innovation]. , intelligent connected cars, industrial software, integrated circuits] and the four future industries [commercial aerospace, low-altitude economy, new generation artificial intelligence, and metaverse], a “4+4+4” industrial layout.
In 2023, software business revenue will be 281 billion yuan, accounting for 20% of the province’s total.
In June 2024, the Provincial Party Committee comprehensively arranged to “concentrate efforts to create an important position for the development of new productive forces”; the Municipal Party Committee emphasized “making new productive forces the most distinctive symbol of Nanjing’s high-quality development” and proposed that “Yuhuatai District should give full play to platforms, software information enterprises Gather advantages, strengthen the core industries of the digital economy, and seize the first place in new fields and new tracks.”
Therefore, Software Valley must closely focus on its target positioning, adapt measures to local conditions, amplify its advantages, accelerate the cultivation and development of new productive forces, and ensure that all decisions and arrangements are implemented.
In the course of more than 20 years of development, Software Valley has always stood at the forefront of the times.
Software Avenue Station of Nanjing Metro Line 1 during rush hour is a unique landscape in Nanjing. Some people even say: There is no software avenue in the world. When there are more programmers, a software avenue is created ; there is no software valley in the world. When codes overflow, a software valley is created.
Why is Software Valley called the Canyon of Kings for Nanjing’s “coders”?
As one of the few hundred-billion-dollar software industry bases in the country, and one of the first in the country and the only software and information service industry demonstration base in Jiangsu, Software Valley gathers 4,462 software-related companies of all types with 360,000 employees. There are 14 domestic and foreign listed companies; 52 unicorn and gazelle companies; 113 specialized and innovative companies at or above the provincial level, including 21 at the national level; and 896 national high-tech enterprises.
Software Valley consists of three major areas: North Park, South Park and West Park. Among them, Beiyuan has the most “big names”, including Huawei, ZTE, Samsung, Honor, Yunmanman , etc. It is a globally competitive research and development base for the communication software and mobile intelligent terminal industry, gathering many network security, Internet +, intelligent connected cars and other innovative enterprises.
South Park is supported by leaders such as Yijiahe and Aerospace Science and Industry 8511 Research Institute, and is building special parks such as Science and Technology Innovation City, Niushou Artificial Intelligence Industrial Park, and Headquarters Economic Park, focusing on new business formats such as industrial software, robots, and intelligent equipment; West Park relies on The Entrepreneurship and Innovation City focuses on smart cities, transportation, smart homes and other fields to create an urban industrial cluster that combines software and hardware.
Why does the Little Software Valley have such great “siphon power”?
Software Valley takes “chain-based investment promotion” as its starting point and focuses on software industry clusters through the strategy of “strengthening the chain, supplementing the chain, and extending the chain”.
In terms of “strong links” , Huawei’s Nanjing Research Institute and ZTE’s Nanjing R&D Base will lead the way to amplify the agglomeration advantages of the communications software and operation and maintenance service industries;
In terms of “replenishing the chain” , with the support of key enterprises such as Runhe Software, Yihui Information, and ArcherMind Technology, we will build a financial information innovation center, an industrial control information innovation center, and a government information innovation center to form a complete industrial echelon;
In the “extended chain” , with Huawei Digital Economy Empowerment Center, ZTE Optoelectronics, Yijia and Intelligent Robots as the core, we will extend the industrial chain of robots, optical communications and other industries to create a highland for the artificial intelligence industry in the province and even the country.
In recent years, Software Valley has attracted small and medium-sized enterprises to “join the chain” by taking advantage of the radiation effect of the “chain owner” giants.
Analytical reports show that in the past 20 years since Huawei was launched, it has driven upstream and downstream enterprises in the industry chain such as Baijuncheng and Tuowei Information to gather within 2 kilometers of the surrounding area; 40 high-quality public service platforms, including the Huawei Digital Economy Empowerment Center led by leading enterprises, have provided Empowering more than 3,000 small and medium-sized enterprises.
Take Runhe Software as an example. It is the first listed software company in Software Valley.
Initially, Runhe Software mainly provided high-end software outsourcing services to major customers such as finance, power grid, and Huawei. In recent years, the company has seized the main line of localization replacement and focused on Huawei’s industrial chain. “Open Source Hongmeng” and “Open Source Euler” have taken the lead in technology To take the lead in commercial implementation, it has penetrated seven of the eight major key basic industries, including finance, industry, medical care, education, and smart cities.
In the 12 years since its listing, Runhe Software’s employees have grown from less than 2,000 to 12,000, an increase of nearly 6 times; revenue has increased from 234 million yuan to 3.106 billion yuan , an increase of more than 12 times; the company’s total market value has increased by more than 16 times. Outstanding performance in the capital market.
In July 2024, Hubble Investment, a subsidiary of Huawei, invested in Runkaihong, a subsidiary of Runhe Software, holding approximately 5% of the shares . This means that the cooperation between Runhe Software and Huawei will be closer.
It is worth noting that as the “leader” of the Hongmeng ecosystem, Runhe Software has made remarkable commercial achievements in innovative businesses such as open source Hongmeng, open source Euler, and AI.
In the first half of 2024, Runhe Software’s innovative business has achieved sales revenue of approximately 338 million yuan, an increase of 95.84% over the same period last year, accounting for 21.38% of total operating revenue.
With the continuous development of innovative business, we aim to significantly increase the scale of innovative business in the next few years, becoming the main force in a new growth cycle and creating new quality productivity.
Why did BMW’s largest digital car software R&D center in China and even Asia settle in Software Valley?
The relevant person in charge of BMW ArcherMind said that first of all, their partner ArcherMind Technology (300598) is a software valley company selected from more than 800 candidate companies. ArcherMind has rich experience in embedded software development and cloud computing applications. At the same time, he also has in-depth research on the automotive industry and related software development;
Secondly, BMW has taken a fancy to Software Valley’s excellent technology and innovation ecosystem. Huawei, Honor, and Vivo are all less than 300 meters away from BMW Archermax.
For a period of time, various regions have been “fighting for the economy” and staged a battle to attract investment and enterprises. From taxation, land, factory buildings, to employment, subsidies, incentives and other “eighteen martial arts”, all are involved in the battle.
However, due to the influence of “involution investment”, some “migratory bird” enterprises migrate frequently. After exhausting the preferential policies in one place, they quickly move to other areas.
However, the investment promotion policy will “change” from August 1, 2024, and the “Regulations on Fair Competition Review” will be officially implemented. One item that has attracted much attention is: without legal and regulatory basis or approval from the State Council, tax preferences shall not be “granted to specific operators” . At this point, the “tax preferential” type of investment promotion will disappear from the stage of history.
“We don’t fight for discounts. This round of cleaning up preferential investment policies is good for Software Valley.” The relevant person in charge of Software Valley said that our industrial ecology is “hard” enough, and we need to compile a “basket” to choose “vegetables.”
At the same time, the far-sighted Software Valley is building a “patient capital” brand and targeting a new model of “fund investment”.
In August 2024, Software Valley cooperated with the District State-owned Assets Group to establish Yuhua Innovation Investment Co. , Ltd. with a registered capital of 190 million yuan. In the future, the company will be used as a carrier to further leverage the joint efforts of the District and Valley, actively participate in various capital operations, and strengthen industry cultivation.
In September of the same year, Ou Gu and Nanjing Venture Capital Group jointly introduced the Jiangsu Provincial Strategic Emerging Industry Fund and jointly established a 6 billion yuan Jiangsu Nanjing software and information service industry special fund of funds (limited partnership). Ou Gu invested 30% % , the fund has now settled in Software Valley.
The Fund of Funds encourages “early investment, small investment, long-term investment, and hard technology investment” and will play the role of patient capital, actively cultivate and expand software and information service industry clusters, and promote the development of new productive forces.
In recent years, Software Valley has participated in the establishment of venture capital funds with a total scale of nearly 11 billion yuan. In the future, Software Valley will focus on advantageous industries, use industrial capital to promote chain extension and repair, focus on investing in strategic emerging industries, and actively target future industries. layout and build the “Patient Capital” brand of Software Valley.
In the “post-investment” era, “fund investment” is receiving high hopes. The essence of fund investment promotion is to attract investment through equity investment tools. Especially after the implementation of the new investment promotion policy, the intensity will be greater and more frequent.
At present, “land finance” is in a downturn, and “equity finance” is quietly rising. Compared with the “best venture capital” Hefei State-owned Assets and the “bold capital” Shenzhen State-owned Assets, Nanjing State-owned Assets, which has always been stable and low-key, has also pressed the accelerator button and is accelerating the construction of “long-term capital” and “patient capital” led by state-owned capital to promote the formation of The “4+N” industrial fund cluster with a total scale of over 200 billion yuan. In the future, Software Valley, which is driven by the “chain + fund” two-wheel investment model, will definitely become more “hard”.
From software research and development to the digital economy, Software Valley implements both soft and hard policies.
From policy investment promotion to chain investment promotion to fund investment promotion, Software Valley has stepped on the drumbeat of the development of the times. In the new wave of scientific and technological revolution and industrial transformation, the software valley has already experienced “acceleration”.
