Silicon Markets: Smart
Hardware from The Streets
Anna Greenspan, Silvia Lindtner, and David Li
Hacked Matter
The street finds its own uses for things.
William Gibson (Burning Chrome)
I
n June 2015, Shenzhen hosted its second featured Maker Faire, bringing
DIY (do it yourself) makers from all over the world to the manufacturing
hub in the South of China. On display were an assortment of enticing
gadgets showcasing the latest experiments in the Internet of Things: drones
the size of one’s hand flew above the heads of tens of thousands of visitors,
while transformer-like robots marched through the rows of booths sponsored
by Intel, Microsoft, Qualcomm, Foxconn, Arduino, and many more. At
the opening ceremony, two key figures of the global maker movement
Dale Dougherty, founder of the Maker Faire, and Eric Pan, CEO of Seeed
Studio (“Seeed Studio,” 2015), shook hands with the Shenzhen mayor, who
announced Shenzhen’s commitment to play a central role in what China’s
national government calls “mass making” 众创, (a national government policy
that promotes entrepreneurship and innovation by funding makerspaces in
universities, middle schools, factories, and corporations). The Shenzhen Maker
Faire in June symbolized a unique moment for the young city. Until recently,
most people knew Shenzhen (if they knew it at all) as a place, where ideas
generated elsewhere are simply executed. Today, Shenzhen is celebrated as the
“Silicon Valley for Hardware” (Stevens, 2015) and large corporations, investors,
and hobbyist makers flock to the city to follow its hype and promise: ‘if you
can imagine it, you can make it in Shenzhen.’ (Stevens, 2015)
106 THE GOOD LIFE IN ASIA’S DIGITAL 21ST CENTURY
Yet, despite its ambitions to insert itself into the glossy world of high-end
design, Shenzhen is a cyberpunk city. Alongside the slick formality of corporate
events, there is a thriving, vibrant, culture of the street. This is especially vivid
in the city’s famous chen zhong cun (urban villages) - informal neighborhoods
where open air restaurants, fish and fruit vendors share their narrow spaces
with pool halls, repair workshops, and mahjong rooms that spill out onto open
lanes. Shenzhen’s animated street culture seeps its way to every corner of the
metropolis, as seen, for example in the jiaozi (dumpling) stands that are set
up on weekday mornings just outside the slick glass surface of Shenzhen’s
expanding landscape of luxury hotels, corporate buildings, and exhibition
centers.
Street life and street markets are also key to Shenzhen’s emerging identity
as the “Hollywood or Silicon Valley of Hardware,” epitaphs favored by the
city’s boosters - from local government officials to entrepreneurs and makers
from all over the world. Central to this new urban imaginary are the electronic
markets of Huaqiangbei, a 15-by-15 city block area, where an enormous array of
electronic components and devices are sold, recycled, and assembled. Though
the markets are housed in a cluster of multi-story malls, they come from - and
belong to - the streets. The Huaqiangbei markets are part of an open source
ecosystem of manufacturing (known as shanzhai) that has emerged in China’s
Pearl River Delta in the shadows of large contract manufacturing. This open
innovation model of technology production has evolved over the last 30 years,
feeding off of low barriers of entry, an outlaw spirit, and a corresponding
high-speed mode of copy-and-mutate design and production. In the markets,
versions of the products on display at the Shenzhen industrial design fair are
available at a fraction of the price. Smart watches, wearable bands, and personal
drones all can be found for a few hundred renminbi.
The world of consumer electronics is at a strange phase, evoking a peculiar mix
of fevered excitement and ennui. On the one hand, the plummeting costs of
hardware and digital fabrication have resulted in an explosion of new tools and
devices (e.g. 3D printers, household robotics, drones, wearables, and the wide
variety of devices that make up the Internet of Things). Yet, exhilaration at the
proliferation of ‘smart’ objects is tempered by the sense that, at least so far, no
one is really sure what any of this stuff is for. High profile failures of celebrated
gadgets like the Nike FuelBand and Google Glass make plain that the current
wave of global technological production is still very much unsettled.
At the Maker Faire none of this ambivalence was on show. Instead, makers
and corporates from around the world skillfully wrapped their seductive
machines and tools in a change-the-world rhetoric. Behind the hype lurks a
familiar business model. Today’s emerging hardware companies look to the
existing giants - Facebook, Google, and Twitter - and see their money and
success coming from the speculative drives of the Internet economy. What
matters, here, is not the hardware itself but the abstraction through software,
DIGITAL ECONOMY 107
advertising, and big data analytics. As DIY makers morph into entrepreneurs,
many begin caring less about the careful crafting of an object (in contrast to
what the maker movement might have us believe), and begin focusing instead
on the potential network effects of devices that have the capacity to extract
data from a user’s behavior. Misfit founder Sridhar Iyengar, for instance, has
spoken openly about this approach. Trained as a data scientist, Iyengar views
the value of wearables in the data they collect. The company’s goal is to create
a device so appealing that customers will be compelled to wear them all the
time, keeping their monitoring powers close to the skin, day and night. Tuned
sharply to the promise of VC funding, this vision sees market domination as
the mark of a truly successful wearable device.
In contrast, the shanzhai goods sold in the stalls of Huaqiangbei do not come
with end-user license agreements or service models, and are not accompanied
with big data analytics or advertising plans. Neither do they have expensive
marketing campaigns or rely on the funding of venture capitalists. Instead,
capital is borrowed through informal networks, and companies operate
primarily with the conventional rules of trade that emerge spontaneously
in highly competitive markets. Shanzhai companies do not drift far from
financial fundamentals. Unlike VC funds, which choose technology companies
in the hope of betting on the next monopoly, shanzhai investors are concerned
only that they are repaid with the interest that was promised. This tends to
encourage a culture of fierce entrepreneurialism characterized by breakneck
agility, micro-experimentation, and the use of the market itself as a product
testing ground. The result is a kind of low-end, “folk art” style of its own - a
bracelet that is also a USB cable; a power bank modeled on an anime cat; a
whole range of adaptations on the electronic unicycle; a flashlight that is also
charger, a host of other creative gadgets. This is not the sleek, high-tech design
of a global elite that tends towards uniformity; it’s the cheap, multifaceted,
and niche technology of a vast population that lives predominantly outside the
cherished high-end markets of the West.
Shanzhai production constitutes an alternate global market in electronics,
which has more in common with the street food hawker than it does with
chain restaurants in shopping malls. Though less visible than well-known
global brands, Shenzhen’s open ecosystem is enormous in scale, producing
300 million phones and 100 millions tablets per year. For instance, in 2014
alone, it released 2 million smart bracelets and 1 million smartwatches to the
market as white-labeled products (about 1/5 of global shipment) (Liu, 2014).
The intensity of this mode of cutting-edge technology production has already
disrupted companies like Nokia and Motorola, which cater primarily to highpaying customers. Devices created and made in Shenzhen are distributed in
Africa, India, South America, Europe, and the United States. They are sold as
no-name devices in Walmart and Target, and are also behind new disruptive
brands, such as Wiko (“Wiko Mobile,” 2015) in France or Tecno Mobile
(“Techno Mobile,” 2015) in Africa.
108 THE GOOD LIFE IN ASIA’S DIGITAL 21ST CENTURY
This distinction between branded high-end technology and cheaper, mutant
offshoots receives abstract articulation by historian Fernand Braudel. His threevolume exploration “Civilization and Capitalism” takes pain to distinguish the
capitalism of large monopoly-driven corporations from the trade of markets,
which always exist in a “layer beneath” (Braudel, 1984). Drawing on Braudel,
theorist Manuel de Landa (Delanda, 1996) reinforces this differentiation (or
even opposition) between the capitalism of large corporations (which he names
anti-markets) and the self-organizing, decentralized realm of small businesses
and small shops that constitute the markets of the street. Throughout his
historical analysis, Braudel shows that these two economic realms - a capitalist
order consisting of monopolistic corporations and a substratum of market
activity - have both been at work for centuries. In addition to the monopolistic
dealings of the East Indian Company, for example, there was always a vast
hybrid traffic of smaller ‘pirate’ trade. Yet, while this more centralized and
organized economic order has always been more visible, its secret is the
strength it draws from the markets, which continually exist underneath and
alongside it. Braudel repeatedly draws attention to "the enormous creative
powers of the market” of this “lower story of exchange...” (Braudel, 1984)
In Shenzhen, as elsewhere, these two economic models - capitalism and street
markets - are often intertwined. Aspects of shanzhai production feed into
the glossy companies on show at the design fair just as elements of high end
corporate capitalism - VC funding, advertising, data analytics - seep into the
markets of Huaqiangbei. In Shenzhen today, however, the interplay of these
two systems is especially vivid. As designers and makers from around the world
flock to the metropolis, the question of a how a global technological elite
interacts with, and are influenced by, the culture of the street will shape not
only the future of the city but also the way in which technology’s latest wave wearables, robotics, IoT, and ubiquitous computing - gets made.
References / Links / Resources
Braudel, F. (1984). The Perspective of the World: Civilization & Capitalism 15th-18th Century. Harper &
Row.
Delanda, M. (1996). Manuel, Markets, Antimarkets and Network Economics, Paper presented at Virtual
Futures, Coventry, England.
Hacked Matter. (2015). Retrieved from http://www.hackedmatter.com/.
Liu, H. (2014, November). [Personal interview by Huaqiang Research Group].
Seeed Studio. (2015). Retrieved from http://www.seeedstudio.com/depot/.
Stevens, A. (Editor). (2015, September 22). Inside China’s Silicon Valley. Retrieved from http://money.cnn.
com/video/technology/2015/09/22/shenzen-china-silicon-valley-tech-incubator.cnnmoney/index.html
Techno Mobile. (2015). Retrieved from https://www.tecno-mobile.com/en/.
Wiko Mobile. (2015). Retrieved from http://world.wikomobile.com/.
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