Scholars' views

Solid Progress in the Deep Integration of Artificial Intelligence with Real Economy

In 2016, scientists in China proposed the concept of AI 2.0 for the first time. Different from traditional artificial intelligence (AI 1.0), AI 2.0 is defined as data intelligence based upon the cyberspace, i.e., a new generation of artificial intelligence. With a new generation of technological innovations, including interactive Internet (Web 2.0), Internet of Things, big data, cloud computing, blockchain, and 5G, the interaction and integration of the cyberspace, the physical world, and social space have determined “data and computing” to be “key factors of production” that drive economic and social development, which has significantly improved societal-level productivity, leading human society into the era of smart economy.

As the engine of the Fourth Industrial Revolution, artificial intelligence ought to be considered a general-purpose technology. Similar to steam engine, electricity, and computer, all of which emerged from the previous three industrial revolutions, general-purpose technologies can only bring about sustained economic growth by empowering the real economy when they are deeply integrated within the economy and society. As core technologies gradually mature, the economic competitiveness of countries and regions, as well as the global economic paradigm, will be influenced or determined by the efforts to realize deep integration of artificial intelligence and the real economy, and subsequently, a new wave of technological innovation and a significant increase in productivity.

1. Artificial Intelligence as a General-purpose Technology

Science and technology constitute the primary productive forces and are the eternal driving forces for economic and social development. Depending on the level of impact on economic activities, technological innovations can be divided into two major categories: industry-specific technologies and general-purpose technologies. Industry-specific technologies refer to technologies that emerge in a specific domain, whose impact on the economy and society is partial, short-term, and gradual. General-purpose technologies are pivotal technologies with a wide range of applications, whose impact on the economy and society is comprehensive, long-term, and radical. Only general-purpose technologies can serve as the foundation for an industrial revolution, for example, steam engine in the First Industrial Revolution, electricity in the Second Industrial Revolution, and computer technology in the Third Industrial Revolution. Artificial intelligence is a typical general-purpose technology with a revolutionary impact on economic and social development.

General-purpose technologies are integrated into the economic and social development through the creation of “key elements”. “Key elements” refer to low-cost inputs brought forth by the development of general-purpose technologies, with a wide range of applications and unlimited supply, such as electricity, motors, and chips. “Key elements” can be widely adopted to transform traditional industries, resulting in changes in the economic structure and increases in societal-level productivity. The “key elements” created by artificial intelligence are “data and computing”. Considering the output and input of “key elements”, there are two basic components of the smart economy: core industrial sectors and integrated industrial sectors. Core industrial sectors refer to sectors created under the industrialization of artificial intelligence, for example, the Internet, Internet of Things, big data, cloud computing, blockchain and 5G, which produce “data and computing”. Integrated industrial sectors refer to the sectors created from the integration of artificial intelligence and the economy and society, which consume “data and computing”. Such sectors include smart manufacturing, new retail, smart cities, smart transportation, and smart healthcare.

The positive interactions between the core and integrated industrial sectors or the formation of an innovation cycle is the prerequisite and basis for an explosive growth in the smart economy. Based on a profound understanding of the essential characteristics of artificial intelligence as a general-purpose technology, China put forward the “New-generation Artificial Intelligence Development Plan” and “Guidelines on Advancing the Deep Integration of Artificial Intelligence and the Real Economy”. At the 7th Session of the Central Committee for Comprehensively Deepening Reform on March 19, 2019, General Secretary Xi Jinping stated: “To promote a deep integration of artificial intelligence (AI) and the real economy, we must comprehend the characteristics of the new generation of artificial intelligence development and focus our efforts on fulfilling its industrial application and meeting market demand. We also need to press ahead with reform and innovation and foster an enabling environment for institutions to promote enterprise innovation and boost internal forces driving development. Moreover, we have to explore paths and methods for applying innovated achievements based on incorporated features of different industries and sectors, and set up a smart economic formation that is not only driven by data, but also achieves human-machine collaboration, cross-industry integration and mutual creation and sharing.

2. The development of the integrated industrial sector

In order to study the current status and development trends of artificial intelligence industry, the China Academy of New Generation Artificial Intelligence Development Strategies has established a database of 797 main artificial intelligence enterprises in China. Of the 797 enterprises, 581 are in the integrated industrial sector. Research shows that they are widely distributed throughout 18 different application areas. Among them, two application areas, enterprise technology integration and solution provision and intelligent robots, account for the highest proportions, with 15.43% and 9.66%, respectively. Key technology R&D and application platforms, new media and digital content, smart healthcare, smart hardware, technology finance, smart business, retail, and smart manufacturing all also have relatively high proportions, with 8.91%, 8.91%, 7.65%, 7.03%, 6.65%, 6.52%, and 6.15%, respectively. The proportion of smart agriculture is the lowest, with only 0.75%. Enterprise technology integration and solution provision and key technology R&D and application platforms rank first and third among all areas, indicating that technology integration and the innovation of special technology play a vital role in the integration and development of artificial intelligence and the real economy. The area of intelligent robots comes in second, showing that the intelligentization of the manufacturing industry is necessary for the development of artificial intelligence.

Of the 581 sample artificial intelligence enterprises, we have access to 2019 financing data for 577. By analyzing the proportion of the financing amounts of the industrial sectors to which those 577 enterprises belong, we can see which application areas are more favored by capital. In terms of the distribution of corporate financing in AI application areas, smart retail, new media and digital content, and smart financial applications have the highest financing amounts, accounting for 18.37%, 15.96% and 15.94%, respectively. In addition, key technology R&D and application platforms, smart transportation, and smart hardware account for more than 5% of the financing amounts, which is relatively high.

In terms of the development of the integrated industrial sector, the top five active enterprises are Ping An Group, Suning Tesco, Xiaomi, Didi Chuxing and Jusfoun Big Data. Tongdun Technology, Hundson Technologies, Oriental Pearl Group, Das Intellitech, Haier Group, BGI and Mininglamp Technology are also all highly active enterprises.

The enterprises and institutions that provide technology, human capital and financial support to enterprises in the integrated industrial sector fall into five main categories: The first category is the core industrial sector, represented by AI platform enterprises such as Huawei, Baidu, Tencent, and Alibaba Cloud. These platforms provide not only application scenarios for enterprises, but also technical and human capital support. The second category is made up of universities and research institutes, including Tsinghua University, Peking University, Shanghai Jiaotong University and Zhejiang University, which provide technical support and human resources. The third category is multinational enterprises, represented by Intel, Qualcomm and Nvidia, which provide core hardware and basic software services including chips. In the fourth category, investment institutions such as Sequoia Capital China, Matrix Partners China and ZhenFund provide financial support. The final category includes network infrastructure service providers, including China Unicom and China Mobile, which offer infrastructure services.

From the perspective of technology, human capital and investment relations, we can leverage the role of open and innovative AI platforms in driving the development of the integrated industrial sector. In addition to platforms, leading enterprises in traditional industries are also important drivers of the integration of AI and the real economy. Relying on their technological and market strengths in traditional industries, leading enterprises integrate AI technology to accumulate specific technologies through cooperation with platforms, small and medium enterprises, universities and research institutions. Foreign enterprises, universities, and research institutions also play an important role in the development of integrated industrial sectors, constituting a critical part of the innovation ecosystem.

3. Innovative thinking is required for the development of the integrated industrial sector

During its industrialization stage, China has accelerated its growth into the world's manufacturing center through the introduction of mature products and standardized production technologies. However, during the high-quality development stage, both the industrialization of AI technology and the intelligentization of industries are reliant on independent innovation. In the integration and development of AI and the real economy, a series of complementary innovations and the accumulation of specific technologies are the prerequisites and for and the foundation of the promoting of economic transformation and upgrading. We need new thinking and measures to leverage AI to transform and upgrade existing industries. Attracting investment should not be the only focus of AI technology industry development. Instead, we must continue to implement innovation-driven development and strive to create an environment for innovation and entrepreneurship as well as a sound business environment.

First of all, we must build new innovation zones to advance industrial intelligence. Accelerating the aggregation of scientific and technological innovation resources is a key strategic measure in promoting the development of integrated industries. Concerning the frontiers of AI industry development, such innovation zones play an important role in promoting the integration of artificial intelligence and the real economy. Unlike traditional industrial and high-tech parks, the new innovation zone emphasizes the planning and development of cyberspace, rather than the physical space. Based on this idea, the deep integration of AI and the real economy will be promoted through the cultivation of innovation and entrepreneurship ecosystems.

Second, open application scenarios are the premise deep integration of artificial intelligence and the real economy. Artificial intelligence is a general technology, and the opening of application scenarios lays the foundation to achieve complementary innovation and specific technology accumulation.

Third, the formation of the data ecosystem is a basic condition for applying AI technology in specific application scenarios. The new generation of artificial intelligence is data intelligence, which is based on a good data ecosystem. Only by forming a data ecological advantage can the integration of artificial intelligence and the real economy be smoothly promoted.

Fourth, in order to facilitate the deep integration of artificial intelligence and the real economy, we need to speed up the construction of new infrastructure, including 5G. New infrastructure construction is necessary to integrate artificial intelligence and the real economy. From the perspective of industrial intelligence, 5G is the foundation for the development of integrated industrial sectors, including smart manufacturing.

Finally, the integration of artificial intelligence and the real economy requires a series of complementary innovations and accumulation of specific technologies as support. For example, in the integration of artificial intelligence and the security industry, the formation of a series of complementary innovations and specific technologies, including the structuring of video data, smart cameras, smart chips and edge computing, is the key to the rise and development of the intelligent security industry. These technologies will lead future development by forming clusters of integrated industrial sectors with advantages in several regions or cities in China. This change brings about the formation of a new pattern of regional economic development in China.


Source: Nankai University News Network

Article Source: Tianjin Daily, June 29th, 9th Edition