At the 2ndsession of the 6thCommission of the Shenzhen Science and Technology Association (SZSTA) in 2016, Zhou Luming, a member of the Shenzhen Municipal Committee of the Chinese People’s Political Consultative Conference and director of the Space Institute of South China (Shenzhen), advanced his idea to set up a special technological zone in Shenzhen. He observes the increasingly prominent role of Shenzhen as a node of the national innovation chain against the backdrop of increasingly evident changes in the global innovation chain and the increasing upgrade of the demand side in Shenzhen. From knowledge creation to demand satisfaction, the global innovation chain has continued to evolve. Three hundred years ago knowledge creation was scarce while demand was huge. But now there is an explosive growth in knowledge creation, and the demand for knowledge is growing steadily. Over the past 30 years of socioeconomic development, Shenzhen, a city known for technological immigration, has experienced a demand for technical products to such an extent that it could trigger a new round of innovation based on intelligent and internet technologies.
 
I.              Background and Opportunities 
Over the past three decades China has adopted a follower strategy of innovation, which invites problems as it speeds up economic progress. Due to a failure to address industrial bottlenecks in source innovation, industrial transformation, including upgrading, has become a long-term problem for economic and social development in this country. China is the second biggest economy in the world, and in order for it to realize economic transformation and growth, efforts must be made to overcome the difficulty of source innovation and embark on changes in that innovation fitting its national conditions. At present, great changes have taken place in the global innovation landscape, which are helpful to China. By seizing the present opportunities, China will dramatically advance its efforts to implement the strategy of innovation-driven development. 
 
1.    Changing trend of the global innovation chain
The global innovation chain, from knowledge creation on one end to the demand satisfaction on the other, keeps changing. Previously, the different tasks of the innovation chain were carried out by different innovation organizations. Nowadays, one innovation firm (such as Apple in the US or BGI in China) can accomplish all the tasks in the chain, which enables the demand to act directly on the source of innovation. At the same time, today’s world has witnessed an explosive growth of knowledge while the demand has maintained a steady growth. These changes have increasingly highlighted the importance of the demand side in the innovation chain.
 
2.    Increasing upgrade of China’s demand side 
Thanks to the socioeconomic development over the past 30 years, the demand of developed regions in China has been growing rapidly. Especially in cities like Shenzhen that features a unique culture of technological immigration, the rise of local demand on technologies has gradually reached a level that could trigger a new round of source innovation that is based on intelligent and internet technologies. The high and multiple demand of Shenzhen for intelligent products has even surpassed that of developed countries. Shenzhen has the potential to become an international innovation experience center and further develop into a world innovation center.   
 
3.    Shenzhen as a key node of theglobal innovation chain 
Because of its integral supporting industries and strong customization capacity, Shenzhen’s important role in the global innovation chain has become increasingly evident. For instance, people from Silicon Valley in the US have come to Shenzhen to run incubators, which is unique across China. This demonstrates the drastically changing role of Shenzhen in the global innovation landscape. 
 
All these changes constitute a strategic opportunity not only for Shenzhen but also for the whole of China. If China is to seize the opportunity, it must create an overarching plan from the perspective of establishing an innovative country and global vision. We should leverage advantages through large-scale planning and initiatives so as to achieve the objective of innovation-driven development. 
 
II.            Conception of Setting up a Special Technological Zone in Shenzhen
To achieve leapfrog development in source innovation, China must bring the demand side into full play by taking advantage of the favorable industrial environment in a region. In order to dramatically change China’s role in the global innovation landscape from a manufacturer to an innovator, we should start with a region with intensive interaction with the international innovation environment such as Shenzhen. Effort should be made to plan for a special technological zone in Shenzhen, develop a venue for source innovation driven by demand, and then spread the international innovation resources to other Chinese cities through the commercial network of this immigration city. 

1. General Thinking of a Special Technological Zone
It is advisable for Shenzhen to promote new legislation on a special technological zone by exercising the legislative power entrusted to it by the central authorities. An appropriate piece of land should be specially designated as an experimental area focusing on source innovation. In the experimental areas, international centers of new technologies and products should be set up by leveraging the unique advantages of Shenzhen on the demand side so as to address the bottleneck problems in global social experiments involving disruptive innovative products. These centers would pool together, on a large scale, the technology and human resources of source innovation and facilitate Shenzhen’s growth to an important platform for international synergetic innovation, which would gather global innovation sources to pursue source innovation in light of demand from China. 
 
2. Tasks of a Special Technological Zone
(1) Establishing international social laboratories of new l technologies
Social experiments are necessary for the large-scale application of disruptive innovation products (such as driverless vehicles, drones and Martin Jetpacks). In such experiments,people could formulate appropriate management regulations and legal frameworks,and,at the same time, improve their products using feedback from the demand side. Some life and health technologies require small-scale social experiments for improving the technologies and their applications. These experimentsare difficult to accomplish in developed countries. The demand in this regard is shown by the active international response to a recent proposal for setting up an international social laboratory of new technologies by the CAST (Shenzhen) offshore innovation and venture center of overseas talent. 
 
 (2) Setting up an Experimental Zone of Source Innovation
There are well-equipped source innovation systems in developed countries. In China, however, the development of such a system faces various challenges ranging from decision-making and industrial environment development to market cultivation and system and institution development. These problems could be well addressed by the establishment of an international social laboratory of new technologies,in which we gather a large number of source innovation institutions, both foreign and domestic. An experimental zone of source innovation based on the labs will have important strategic significance for China’s innovation-driven development.   
 
III. Feasibility Studies  
1.    Shenzhen enjoys a cutting edge for setting up a special technological zone
The Shenzhen Special Economic Zone has the mission of being a touchstone for China's reform and opening-up policy. It has a natural advantage for developing a special technological zone as it enjoys designation as a special zone and is designed as a state experimental zone for S&T innovation. As a city of immigration, Shenzhen enjoys a close people-to-people relationship with other cities, which is a very good commercial channel for linking up with the markets of inland cities. Source innovation organizations will continue to emerge as long as a positive feedback mechanism exists between the demand side and source innovation formed in the special technological zone. 
 
2.    Wide support for the idea of an international social laboratory for international new technologies 
The conception of setting up an international social laboratory for new technologies, which was proposed by CAST (Shenzhen) Offshore Innovation and Entrepreneurship Base for Overseas Talent in 2015, has received a positive response from important S&T institutions around the world, which regard it in a very favorable light. In addition, the Base has agreed to join hands with venture capitalists in launching the first project of the international social lab of new technologies: a town for driverless vehicles. The first group of international automobile manufacturers and the lab organizers have agreed to principles of cooperation. The experimental zone will be able to bring together driverless car makers, both foreign and domestic, as long as the town is well planned and managed. 
 
3.    Realistic demand serves as a major driving force behind the establishment of the special technological zone
With their realistic demand (such as seen in the biological medicine technologies of BGI and Martin Jetpack of Chuangchi), these companies are expected to be the first tenants of the international social laboratory of new technologies. 
 
IV. Recommendations for the Establishing a Special Technological Zone
The development from a special economic zone to a special technological zone is a landmark event in China’s transformation to innovation-driven development. It is conducive to the transformation of China’s role in the international innovation competition from a simple manufacturer to a major contributor and innovator in global S&T advancement. It is also conducive to the leapfrog development of Shenzhen toward a world-class innovator. Furthermore, it is conducive to the assemblage of international innovation resources so as to attract talented people. In addition, it is conducive to the communication and promotion of China’s brand building in terms of innovation. In order to speed up the development of Shenzhen Special Technological Zone, the following recommendations are proposed. 
 
First, it is advisable for the central authorities to make an announcement about the establishment of a Special Technological Zone in Shenzhen as a major measure for China’s innovation-driven development strategy.
 
Second, regulations regarding the Shenzhen Special Technological Zone should be promulgated as soon as possible based on legislative studies of an overarch planning.
 
Third, it is advisable to regard the establishment of the Shenzhen Special Technological Zone as a key step in the innovation-driven development strategy, do a good job in resource allocation and set an example for others to follow.
 
Fourth, the special technological zone should be located in an area with a good experimental environment that integrates community and campus and is in a livable environment.
 
Fifth, policies should be rolled out to facilitate the exit and entry of Shenzhen by overseas experts.
 
Six, proper measures regarding intellectual property rights protection should be adopted to address international concerns in this area.