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Policy Suggestions on IT-Driven Transformation and Upgrading of China’s Economy During the 13th Five-Year Period


By Li Guangqian

Research Report Vol.18 No.3, 2016

I. Major Features of the Next Round of Informatization Development

In recent years, represented by the Internet of Things, cloud computing, big data and mobile Internet, the next generation information technologies have been exerting huge impacts on informatization development in China, showing several significant features as follows. 1. The new generation information technology spawns intensive chain-style innovation following the information life cycle Since 2008, the new generation information technology, such as the Internet of Things, cloud computing, big data, and mobile Internet, emerge altogether, creating unprecedented clusters of science and technology innovation. With a careful look, however, it is possible to find out such technologies have internal relationships and laws. They appear one after another following the information life cycle (as shown in the figure below). The Internet of Things produces not only all kinds of structured data, but unstructured and semi-structured ones, all of which, increasing day by day, are transmitted, through mobile broadband, to the center platform of cloud computing. Big data analyzing technology is used to explore and present the results. Therefore, data analysis and processing have become the internal driver for the growth of the new generation information technology. 2. The new generation information technology makes informatization development possible With traditional technologies, in order to boost informatization development, an organization has to build local area networks, computer rooms, and data centers, and set up corresponding business systems as well as departments for their maintenance, which always requires a lot of human, material and financial resources. As a result, ordinary small and medium-sized enterprises find it difficult to complete the task, let alone individuals. But, the above-mentioned obstacles have been largely removed and cleared thanks to the new generation information technology, making it possible to launch IT application. Specifically, the Internet of Things has realized information exchange among people, between people and things, and among things, which helps apply information technology in a wider and deeper way. Cloud computing technology makes it possible to share and use efficiently the technology, products, equipment and data of IT application. Besides, big data technology guarantees real-time processing of various data, and presents results to users in a simple and clear way. Moreover, mobile broadband technology has not only accelerated data transmission, but also broken space limits of applying information technology. These technological advances lead to specialized divisions of the process of IT application, rather than the previous integration of traditional informatization and IT application. In particular, with cloud computing technology, enterprises can rent infrastructure and services of some specialized technical enterprises to start IT application, instead of investing heavily in building their own information infrastructure. In this way, large decrease can be seen in the investment, necessary technical conditions and daily maintenance cost, so that small and medium-sized enterprises, even individuals, are capable of starting information-based business. So we will name IT application under the new generation information technology “light informatization”.

3. IT application facelifts industries in the following three aspects The new round of informatization, based on the new generation information technology, is exerting significant and profound impacts on China’s industrial structure, and change the existing industry development, mainly in the following three aspects. The first is to create new growth areas because of new technologies like the Internet of Things, cloud computing, big data and mobile Internet. For instance, Gartner expects that the global market of cloud computing will exceed $200 billion by 2016; and IDC predicts that of big data technology and services will reach $32.4 billion in 2017. The second is to transform traditional industries. Applying information technology, these industries can transform, improve themselves and realize innovative growth, which is especially obvious in traditional manufacturing industries, with IT application playing an increasingly important role. The third is to create integrated new industries. Based on existing Internet platforms, Internet enterprises, in some key parts, combine with traditional service industries, like medicine, logistics, and catering. Thus integration of several industries has become a major way to ensure innovative growth.

4. IT-based manufacturing has become the priority of international strategy It is worth noting that the focus of international informatization has shifted to the manufacturing industry from e-government, e-commerce and urban informatization since 2010. Germany and the United States launched their own strategy of new type of industrialization. The former proposed “Industry 4.0” in 2010, and GE of the latter put forward “Industrial Internet”, a specific plan of realizing “Reindustrialization” and “Revitalizing American Manufacturing” proposed by the Obama Administration since 2009. At present, the manufacturing industry has become an important part of international informatization and the key to improving competitiveness of world’s major economies.

II. IT-Driven Transformation and Upgrading of China’s Economy

Since 2008, China has made good use of opportunities brought by the new round of technology innovation, and strengthened their role in informatization development in all industries, thus creating new engines for its economictransformation and upgrading. 1. Major changes have taken place in the informatization drive, with e-commerce becoming the main driving force China’s informatization drive was first driven by e-government. However, since 2008, e-commerce in China has been accelerating and penetrating into other sectors. In 2013, online retail volume accounted for 8.0% of the total retail volume in China, making it the largest e-commerce market in the world. At present, China’s e-commerce economy has started independent innovation rather than imitating other countries. On the one hand, e-commerce has changed the growth of traditional commercial circulation; on the other hand, logistics and the third-party electronic payment, brought by e-commerce, become new tools and means to promote innovative development of other industries, transforming China’s information economy from consumer Internet to industrial Internet. Currently, e-commerce platforms, logistics and the third-party electronic payment give momentum to the innovative development of China’s economy. 2. “Internet Plus” becomes the basic informatization framework for China’s economic transformation and upgrading During the process of integrating informatization with industrial development, we have been studying and accumulating effective experience for China’s economic advance, and we have created an innovative way of promoting information economy with Chinese characteristics, which is reflected in tactics of enterprise management and national development strategy. As for the tactics for enterprise operation, “Internet thinking” and “O2O” (Online to Offline) represent ideas and ways of how China’s Internet enterprises transform and innovate traditional industries with information technology. With such ideas and ways, informatization is accepted by the whole society and becomes an ideological basis for the transformation and upgrading of all walks of life. In terms of national strategy, “Internet Plus” is key to mobilizing the whole country and all social resources, and integrating China’s economy into the new round of IT application. ...

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