Shenzhen-based audio maker 3Nod proves the power of innovation

Liu Zhixiong, founder and chairman of 3Nod Group. [Photo provided to China Daily]

When 3Nod Group started its business as a supplier of plastic multimedia audio molds in 1996, it was difficult for the Shenzhen-based company to compete with its global counterparts in the audio market.

"We faced shortage of finance in the early years, especially for technology research and development," said Liu Zhixiong, founder and chairman of 3Nod Group.

After 20 years of development, the company now produces one-tenth of the global computer audios, which makes it the world's largest supplier of multimedia audio products.

"We have gone through a very difficult time in the late 2000s, with the global demand for audio molds dropping significantly," said Liu.

Like hundreds of other 'traditional manufacturers－it is a phrase that refers to those in the labor-intensive sectors of electronic parts, garments, shoes and watches in the southern economic hub of Shenzhen－3Nod Group had to upgrade its business to survive.

"We increased investment in building self-owned brands and technology after we realized that we should not simply be a processor of audio parts but grow into a provider of a complete range of high-end audio and related services," said Liu.

Industrial design and technology innovation are the key solutions for sustainable growth of traditional manufacturing businesses, according to Liu.

The company's latest audio product, which relies on human body sensing technology, is designed to play, pause and delete audio according to various human gestures.

"Design, along with innovative technologies, helped boost the competitiveness of our products in the global market," said Liu, adding that the company's products have been globally recognized for their superior design in the past few years.

Despite a growing number of traditional manufacturers like 3Nod Group having successfully upgraded businesses, more than 17,000 low-end enterprises with intensive manufacturing were closed in Shenzhen in the past five years, according to Jia Xingdong, deputy director of the Shenzhen Economic, Trade and Information Commission.

"Traditional manufacturers have been encouraged to develop high-end products, with more efforts being put into the design and brand-building, as well as technological innovation," said Jia.

According to Jia, Shenzhen has plans to develop emerging industries, including lifestyle, health, oceanic economy, aviation, robotics, wearables and smart equipment in the years ahead as the city is intent on optimizing its industrial structure.

"By being well integrated with technologies, traditional businesses could be developed as rapidly as emerging industries, as they still play an important role in the city's overall economic development," said Jia.

Over the past five years, emerging industries' added value grew by 17.4 percent annually in Shenzhen, accounting for 40 percent of the city's economic growth, according to Jia.

"Developing future industries does not mean traditional manufacturing will be abandoned in Shenzhen. Instead, manufacturers in the traditional industries will be given more support to upgrade their business from simple processors at the lower end of the market to providers of high-end products and services," said Jia.

Increased investment in technology research and development will play a key role as local traditional manufacturers upgrade their business, according to Jia.

Shenzhen's overall investment in research and development reached 71 billion yuan in 2015, accounting for 4.05 percent of the city's GDP.