16, July 2018
AI and Impact Dakota — China
Much has been written about the rise of China as an economic and geopolitical force. Let’s break off one chunk this week: China’s role as a major player in digital technologies at home and around the world.
China’s consumer economy is now among the world’s most digitized, and its business landscape is packed with start-ups and rapidly transforming business models. In little more than a decade, China has become the largest e-commerce market in the world, accounting for more than 40 percent of global e-commerce transactions. China’s mobile payments are 11 times the value of those in the United States, thanks to consumers’ early embrace of mobile technology.
This flourishing digital culture is paying innovation dividends, as China is home to one in three of the world’s “unicorns,” or start-ups with more than $1 billion in market cap. And China now places in the top ranks of global venture-capital investment in virtual reality, autonomous vehicles, 3-D printing, robotics, drones, and artificial intelligence.
That innovation base is birthing a host of new business models that might soon revitalize other, previously lagging sectors of China’s economy. According to a recent report from the McKinsey Global Institute, these new approaches include directly linking business buyers and suppliers in disintermediation plays (Alibaba and others) and disaggregating incumbent value chains as digital attackers move in.
What might be next? Creative destruction on a grand scale, which could ratchet up productivity and the international competitiveness of China’s economy. By 2030, 10 to 45 percent of revenue in China’s industries could shift from old business models to new, digitally enabled ones. The transformation is picking up steam: in 2013, industries in the United States were 4.9 times more digitized than those in China; in 2016, that figure had fallen to 3.7 times. Look for China to continue shaping the global digital landscape and supporting and inspiring entrepreneurship far beyond its own borders.
Your MEP, Impact Dakota, has the tools and resources to discuss strategies to compete and exceed in the digital and technological market. Manufacturing 4.0 is here and I ask that we serve you in preparing and moving into the next generation of manufacturing technology.