IN light of the recent industrial development in Bao’an, the district is now home to many world-class leading enterprises as well as a large number of “hidden champions” that focus on a specific division of the manufacturing industry and occupy a leading position in the global market.

“Hidden champions” are defined as relatively small but highly successful firms that are concealed behind a curtain of inconspicuousness, invisibility, and sometimes, secrecy.

Reports from the Bao’an Economic Promotion Bureau showed that more than 60 firms in the district have reached or approached the criteria of being a hidden champion set by the Ministry of Industry and Information Technology (MIIT).

According to the MIIT, a hidden champion is a company that focuses on specific areas in the manufacturing industry and its market share of certain products ranks among the highest in the world.

In Bao’an, there are 20 enterprises whose products are among the top 10 in terms of market share in the world, and 45 enterprises have products that break into the top 10 in the country.

“In light of the statistics, we find that the enterprises in Bao’an that have reached or are close to being hidden champions are mainly foreign-funded enterprises, and those that can be cultivated into hidden champions are mainly private enterprises,” said a staffer from the bureau.

The term “hidden champion” was coined by management thinker Hermann Simon. He first used the term as a title of a publication in a scientific German management journal, describing the small, highly specialized world-market leaders in Germany.

According to his definition, a company must meet three criteria to be considered a hidden champion. First, the company must be the number one, two, or three in the global market, or number one on the company’s continent determined by market share. Second, annual sales are generally no more than US$1 billion. Third, the public’s awareness of its presence is low.

Meanwhile, Simon believes that the success of the German industry cannot be simply attributed to big German companies, but should be attributed to a large number of small and medium-sized enterprises (SMEs), especially front-runners that retain a leading position in the global market.

According to a survey, 70 percent of Germany’s exports come from medium-sized enterprises, of which 26 percent comes from hidden champions. This can also be seen in the United States, Japan and other countries. In China, 68 percent of the exports come from enterprises that have less than 2,000 employees.

“This fully demonstrates that the development of a country or region not only needs big companies, but also small and medium-sized enterprises, especially the hidden champions,” said the staffer.

According to an industry insider, although there is no super big companies like Huawei and Foxconn in Bao’an, the economic development has maintained strong momentum because of the large number of small and medium-sized enterprises in the district.

“The advantage is that Bao’an does not rely on one single big firm, and thus has more opportunities to develop its industries and the ability to resist risks,” said the insider.

Meanwhile, in order to foster hidden champions, Bao’an should formulate specific supporting policies for these companies, said an industry observer. (Zhang Yu)