The Industrial Internet Ecosystem Seminar, sponsored by the Institute of Economics of the School of Social Sciences of Tsinghua University, was held in Beijing in the afternoon of July 14. At the meeting, Rong Ke, deputy director of the Institute of Economics and deputy dean of the Institute for Global Industry of Tsinghua University, released the Report on the Development of Industrial Internet Ecosystem in China (hereinafter referred to as the Report). Many well-known scholars, think tank experts and industry veterans were invited to join in academic discussions on "promoting the integration and application of industrial Internet". China National Radio (CNR), Economic Daily, China News Service (CNS), 21st Century Business Herald and many other media participated in the coverage.
Rong Ke issued the Report on the Development of Industrial Internet Ecosystem in China
The Plan for the Development of the Digital Economy during the 14th Five-Year Plan Period issued by the State Council clearly points out the goal of creating a prosperous and well-organized industrial innovation ecosystem, giving full play to the leading role of enterprises in the digital economy, cultivating an open and collaborative digital industry innovation ecosystem for large, small and medium-sized enterprises and social developers, and promoting the rapid growth of innovative enterprises. In response to the call of the Party and the state, the Tsinghua Institute of Economics conducted researches on the subject of "the Development of Industrial Internet Ecosystem" and released the latest results in the Report.
On the background of the development of industrial Internet ecosystem at home and abroad, the Report analyzes the ecosystem from the three major perspectives, namely the micro mechanism, industry insight and macro value of industrial Internet, and interprets the role of industrial Internet ecosystem in the development of China's digital industry. In releasing the Report, Rong Ke pointed out that a healthy industrial Internet ecosystem not only helps the core enterprises in the industrial value network to achieve business expansion, but also aids those in the traditional industries who are in the weak position to create more value according to their own advantages and their complementary capabilities. Therefore, core enterprises need to pay more attention to co-creating value with the entire ecological stakeholders, and simultaneously solve issues emerging in the overall industrial ecosystem, talent system, social responsibility and many other problems in pursuing economic value.
The core enterprises of industrial Internet ecosystem playing a leading role in coordinating and promoting ecological cultivation
He Wei, deputy chief engineer of China Academy of Information and Communications Technology (CAICT), said that the core driving factors behind different stages are varied from process-driven, connection-driven, to data-driven. The core of the industrial Internet is to help industry or traditional industries to form a data-driven intelligent optimization closed-loop of the full industrial chain and value chain. Driven by data, the capability of rapid perception, agile response, dynamic optimization, and global intelligence will become the core competitiveness of digital transformation in traditional industries.
According to the Report, the cultivation of industrial Internet ecosystem needs to follow the VSP theory. Industrial Internet ecosystem can provide access for different core enterprises, thus creating their own competitive advantages. Core enterprises need to have a vision strategy (V-Vision), clarify their own development positioning, and be able to attract and lead partners to build ecosystem and eco-trust. They should work out specific solutions (S-Solutions) for the company and ecological aspects in the short and long term, including internal and external institutional design, investment and financing, technology, product/service plans, human resource organization, etc., so that they may form a business model that integrates various business models (BM's BM), that is, an ecological business model. They need to layout and cultivate ecological partners (P-Partners) that can contribute to different business models. These partners will explore and master the specific knowledge (Know-How) of their industries to fulfill the ecological business model.
It is found in the Report that in terms of the current pattern of its development in China, the industrial Internet ecosystem has now formed different evolution paths and types in accordance with advantages and capabilities of the core enterprises. Take Huawei, Haier, Tencent and Rootcloud as examples. They came to establish different standard type of industrial Internet through different angle, namely, from computing, manufacturing, software, operation and maintenance respectively. Specifically, Huawei with competitive digital technology advantages at the connectivity and computing level can empower related industries with Internet ecosystem along the digital technology dimension; Haier with rich experience at the manufacturing level is specialized in the empowerment and upgrading of industrial Internet in the manufacturing field; Tencent, which has cultivated deeply in the consumer-oriented Internet for many years with strong software technology, is specialized in using relevant IT technology to innovate business models, and can penetrate into the production scenarios behind the industry based on the consumption scenario; Rootcloud with strengths at the operation and maintenance level developed business model around the operation and maintenance abilities of the machine, and empowered relevant industries with such capabilities.
Based on the deconstruction and analysis of the industrial Internet ecosystem, the Report argues that industrial Internet cooperation will be greater than competition, and it is difficult to form a monopoly-type super platform. Industrial Internet ecosystem is a huge system. Different types of core enterprises can create their own competitive advantages by cultivating the system. Neither the global industrial Internet nor the domestic industrial Internet, no enterprise has the ability to connect all industries. Therefore, in the foreseeable future, the industrial Internet ecosystem will evolve into a competitive pattern of "one meter wide and one hundred meters deep".
Li Jun, a section chief of the National Industrial Information Security Development Research Center, said that in the process of cultivating the industrial Internet at an area of "one meter wide and one hundred meters deep", the problem to be solved is to gain the deep understanding of industrial knowledge and industrial operation mechanism after manufacturing resource connectivity.
Industrial Internet ecological cultivation helping to support the development of "specialized, refined, distinctive, and innovative" small- and medium-sized enterprises
Shan Zhiguang, the director of the Department of Information and Industrial Development of the State Information Center and the director of the Smarter City Development and Research Center, said that the current industrial Internet development faces three challenges, the application scenario, the data, and the systemic challenges. These challenges determine that the industrial Internet platform is unlikely to see explosive growth as the Internet did, or to form an industrial ecosystem for a so-called comprehensive and common platform of Internet of Everything. Rather, it needs to be a process of precipitation, accumulation and exploration. And it needs to be done step by step, one industry after another. Only such an industrial Internet platform can bring value to enterprises and truly help them achieve digital transformation. The industrial Internet should connect upstream and downstream of an industry or have a system with highly relevance. Although the scale and volume of the system are limited, it has more attributes of specialization, fine quality and innovation and greater industrial chain value. In the future, it will represent the core competitiveness of the country.
The Report argues that the cultivation of industrial Internet ecosystem needs to focus on industrial value and pan-community networks. The former refers to the system of direct ecological cooperation partners established by the core enterprise to realize the current industrial value; the latter refers to the indirect system of the potential partners to realize the future industrial value, and that of all partners that support the core enterprise without directly creating the industrial value.
According to the Report, it is found that, on the basis of their basic competitive advantages, the core enterprises in the industrial Internet ecosystem combined with different VSP (ie. ecological Vision - Solution - ecological Partner) cultivation strategies, and formed different cultivation directions. For example, Tencent followed the VSP mechanism, adhered to the concept of "decentralization", and introduced diversified ecological partners. At the level of the industrial value network, Tencent released the SaaS Eco-Vision Strategy - the "Qian Fan Plan"(literally, a thousand sails plan, referring to a plan for a thousand boats setting sail), which offers partners access to the "One Cloud, Multi-end" digital capabilities, and works with SaaS partners to create an industrial Internet SaaS ecosystem for all industries and scenarios. At the level of the pan-community network, Tencent has established the Yunqi Industrial Bases, and actively united with the government, banks, media, universities and other social resources to support the joint construction of industrial Internet ecosystem through the establishment of subsidies, technical training, and competitions and so on.
It is believed in the Report that industrial Internet ecological cultivation is conductive to the development of "specialized, refined, distinctive, and innovative" small- and medium-sized enterprises. The system built through the VSP strategy can support innovative enterprises at their early stage and provide them with a more comprehensive service system. In addition to funds, it is more important to utilize industrial ecological resources to help enterprises solve a series of problems during start-up period, from brand building, customer resource searching to market validation. For example, as of January this year, Tencent Yunqi industrial accelerator has gathered 283 excellent corporate service companies from AI, SaaS, Blockchain, and Cloud Native four tracks, covering a number of industry tracks including finance, government affairs, education, industry, and healthcare, with a total valuation of more than 298.3 billion, of which 70% of the members have obtained financing support by joining the value operation and resource link of Tencent Industrial Accelerator. This year, Tencent's Yunqi industrial accelerator opened a new track - carbon neutral.
Zhang Wenjuan, executive deputy director of Economic Research Center of China Economic Information Service (CEIS) under Xinhua News Agency, said that the industrial Internet is currently in the incubation stage featuring with high R&D investment and long time-horizon. Many small and medium-sized enterprises have realistic difficulties of being "unwilling", "afraid of" or "unable" to transform to the industrial Internet. Even leading companies in the industry face many difficulties. Therefore, ecosystem construction requires the participation of large, small and medium-sized enterprises. How to choose the development model to more effectively attract more small and medium-sized enterprises is the main risk and challenge of next.
Li Gang, vice president of Tencent Research Institute, said that the industrial Internet ecosystem is a process of constantly making the cake bigger, and a process of collaborative development and mutual benefit of large, medium and small enterprises. The up, mid and downstream platforms of the industrial chain and the partners have a symbiotic and win-win relationship. The platform provides operational convenience to partners by reducing costs and increasing efficiency; partners use digital tools and other services provided by the platform to create user value, which achieved common progress and the circulation and enhancement of overall value.
Industrial Internet ecosystem cultivation helping China's industrial Internet platform to shape a comparative advantage in global competition
On the basis of analyzing and sorting out the ecological development of domestic and overseas industrial Internet, the Report points out that the construction and development level of the future industrial Internet ecosystem will become one of the key factors to measure the international competitiveness of digital economy.
At present, the global industrial Internet sector witnesses increasingly fierce competition, showing a tripod complexion with three pillars of North America, Europe and Asia-Pacific. Han Qi, deputy director of the Innovation Strategy Research Office of the Institute of Industrial Economy and Technology Economics of the National Development and Reform Commission, said that the Report summarized the ways of industrial Internet cultivation in different countries in the world, including their respective characteristics and advantages, which brought inspiration and reference for the formulation of relevant policies in China.
The Report points out that, although China has formed a large single industrial Internet market of the world, its ecosystem is still in the early stage. China's industrial Internet ecosystem still has significant shortcomings in some digital technologies, especially the underlying digital technology and operational technology (OT). Zhu Ying, founder & CEO of the Industics (Suzhou Industics Information Technology Co., Ltd), said that although China has world-class local technology, in general, we are still in the stage of low-quality competition rather than a high degree of collaboration in industrial standardization and industrial cooperation.
The Report proposed that a well-developed digital infrastructure is a key element in building an industrial Internet in the industry. Considering that it is difficult to build a well-developed digital infrastructure by just one enterprise or industry, the Report recommended that the government should do better in listening to industry demands, plan at the national level, and actively guide the digital infrastructure investment.
The Report argues that, in the new era, government guidance is equally important for the industrial Internet ecosystem on its way of going global. Unlike traditional enterprises, ecological platforms involve more complex relationships for exploring overseas market. To develop ecological platforms in overseas markets requires the joint development of a sufficiently diverse range of partners, and the coordinated promotion of relevant international technical standards. Therefore, the government needs to pay more attention to such ecological platforms cluster going global and actively participate in the international standard-setting of various digital technologies and development models of the industrial Internet.
Han Qi said that the Report proposed that the construction of industrial Internet ecosystem should not only be rooted in China, but also go out and combine with overseas ecosystem, including market entities. This is an inherent requirement of our development, and a trend in the future as well. It is hoped that the industrial Internet will better serve industrial entities and form an ecosystem with industrial characteristics.
Chen Kaihua, a researcher at Institutes of Science and Development, Chinese Academy of Sciences, and a professor at the School of Public Policy and Management of the University of Chinese Academy of Social Sciences, said during the round table discussion that China should improve the governance capacity of industrial Internet, such as establishing the national governance system of data elements, promoting the construction of the industrial Internet ecosystem, achieving the healthy, fair and efficient development of industries. Furthermore, we should fully utilize the market and institutional advantages to promote the construction of the industrial Internet innovation ecosystem from the perspective of industrial safety, realizing the independent development of core science and technology of industrial Internet in China, and breaking out of the "low-end locking" of industry technology, so that China’s voice can be heard in the global industrial chain. In addition, the data elements are flowing around the globe. We should always keep open minded and actively involved in global cooperation, including strengthening cooperation with the United States.
Zhu Feng, director of the Intelligent Manufacturing Laboratory of the Fundamental Industry Training Center of Tsinghua University, said that the Internet ecosystems of China and Europe industries are very different, especially in the field of IT and OT (operation technology), of which two sides are complementary to each other. In the future, both sides can strengthen exchanges and cooperation between enterprises, and jointly promote cooperation and complementarity between upstream and downstream industrial and ecological chains.
Industrial Internet becoming an important engine for China's economic growth
Zhang Wenjing said that the Report analyzed the impact of industrial Internet on GDP and employment from the data level, and provided data and references for future economic trend analysis.
According to the calculation of the Report, the real added value of the industrial Internet in China rose year by year from 2018 to 2021, reaching RMB 1.818 trillion, RMB 1.999 trillion, RMB 2.120 trillion and RMB 2.397 trillion respectively; from 2019 to 2021, the GDP growth rate of the industrial Internet was 0.22, 0.14 and 0.30 percentage points respectively, showing an overall rising trend, indicating that the industrial Internet has become one of the important drivers of GDP growth.
Through the calculation and analysis of the Report, the industrial Internet will not only become a major source of power for China's future growth, but also improve employment. At the same time, it plays a role in reducing the digital divide in regional development. Through the spatial econometrics analysis, it is found that the ecological and spatial agglomeration trend of China's industrial Internet is rising, but the spatial agglomeration effect decreases year by year. And the industrial Internet not only develops rapidly in the eastern region, but also gradually spills over to the central and western regions. At the same time, the spillover effect of industrial Internet ecology is different from previous factors such as labor, technology and capital, without strong preference for profits, which to a certain extent weakens the "Matthew effect" of the region.
The Report combines the Outline of the 14th Five-Year Plan and other documents to predict the future development of the industrial Internet. It is believed that, under the benchmark scenario, the industrial Internet will account for about 21% of China's GDP in 2035. With the continuous breakthrough and improvement of digital technology, the digital economy with the industrial Internet as an important component will become a new engine of economic growth.
Click to download the " the Report on the Development of Industrial Internet Ecosystem in China”
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