Guanghua School of Peking University and Alibaba Cloud Jointly Released the “List of Ten Major Trends of the 2020 Digital Economy”
Catch the replay of the Apsara Conference 2020 at this link!
By Suchen, General Manager of Alibaba Cloud Research and Strategy Advisory Department
Each Trend Represents a Future that is Taking Place
On September 17, Guanghua School of Management of Peking University and the Alibaba Cloud Research Center jointly released the “List of Ten Major Trends of the 2020 Digital Economy” at the “Digitalization Billboard” ceremony during the Apsara Conference 2020, giving an interpretation of Digital China.
In 2020, the “Digital Intelligence Era” is speeding up. How does digitalization change people’s lives, refresh the outlook of industries, and restructure the governance of governments now and in the future?
With three major fields and ten major trends from Digital Life, Digital Industry, and Digital Governance, the Trend List of “Digitalization Billboard” brings together the academic research achievements of Guanghua’s research team. From the perspective of the Alibaba economy, the team outlines a digital world with insight, experience, and exploration value toward the whole industry and the general public.
At this ceremony, Guanghua School and Alibaba Cloud also jointly released the “Sky and Cloud Digital Ecosystem Program,” which is dedicated to combining classic digital transformation research from enterprises with cutting-edge practices. Through joint case research and development, special topics, and new media promotion, the Program aims at deeply constructing the cognition of the Chinese government and enterprises on digital transformation and promoting the process of digital transformation.
Trend 1: The Rise of Multi-Center and “Distributed” Commerce Makes Digital Consumption “Ubiquitous.”
The happenings of 2020 were unprecedented. COVID-19 has brought many changes to people’s daily lives and work. During the pandemic control period, all walks of life were halted, but China’s digitalization process was accelerated. In the long period of home isolation, people communicated with others through the Internet, bought daily necessities through take-out and e-commerce platforms, and experienced online classes and working. In just a few months, digitalization has deeply penetrated all aspects of people’s lives. The per capita Internet access duration of 900 million Chinese netizens this year has also increased sharply to more than 30 hours per week. The digitization of daily demands, the normalization of remote communication, and the integration of multiple scenarios have become new trends this year. As a result of the pandemic, people had to figure out how to meet all of the consumers’ needs through the network, as digital consumption is no longer limited to commodities. For example, in the past, take-out services were mainly used to meet demands for food and drink. Today, take-out services include ready-made meals as well as fresh food, medicines, clothes, books, furniture, and household appliances. “Take-out services can sell anything,” bringing previously unimaginable things directly to your doorstep.
Trend 2: “Remote Communication” Has Become the New Normal with Many People Turning to Online Platforms Simultaneously.
The production resumption of different industries was more or less realized by digitalization. Many scenarios that were mainly based on offline services soon transferred to online platforms, as it was called “the suspension of work without stopping producing and the suspension of classes without stopping learning.” The rapid development of cloud education, cloud medical care, cloud office, and other sectors has shown unprecedented vitality. In March 2020, the number of DingTalk users exceeded 300 million. The monthly turnover of an online education platform for kids reached the same levels achieved during the 2019 summer vacation. The coverage rate of online education has rapidly increased from 15% to 85%. After the effective control of the pandemic in most parts of China, gradually returned to normal, but the achievements of digitalization remained to help people complete their work with higher efficiency and meet the needs of life in more diverse ways. For example, the popular online medical inquiry will not end after the pandemic stops. Instead, it will be combined with offline medical care to improve the efficiency of obtaining medical information and resources. The pandemic will end, but remote communication will become the new normal in people’s life.
Trend 3: A Large Number of Crossed Scenarios Appear in the Digital Field and Content-Oriented Consumption Scenarios Erupt.
With the upgrading of Internet technologies, the penetration of mobile Internet among network users has reached 99.3%. Digitalization begins to appear in various scenes and increasingly shows clear crossed and integrated trends in many scenes. For example, people used to watch videos on mobile devices and shop on mobile phones, but with the progress of digital technology, the intersection and connection between these scenarios will become smoother.
In a word, people’s consumption will not simply return from online to offline after the pandemic is under control. On the contrary, digitalization will become a part of people’s daily life. How can we integrate online services and offline scenarios, combine different scenes, and better meet people’s evolving consumption needs? These are urgent problems and the main reasons for the digital transformation of enterprises.
Trend 4: The First Year of “New Infrastructure” Initiates Integration of New and Traditional Infrastructure, Creating the New Value Network.
The “New Infrastructure” refers to new infrastructure construction. There is an old saying that goes, “to be rich, build roads first.” It means that infrastructure construction plays a vital role in regional economic development. Over the past 40 years of reform and opening up, China has placed great emphasis on infrastructure construction and has achieved rapid social and economic development driven by infrastructure construction. Compared with traditional infrastructure construction, “New Infrastructure” emphasizes the construction of necessary infrastructure in the Digital Economy Era. It will provide strong support for the comprehensive digital transformation and intelligent upgrading of the social economy. 2020 is being called the first year of the “New Infrastructure.” The digital-technology-oriented new infrastructure construction is growing rapidly. Achievements of new infrastructure construction can already be seen in some fields, such as the Intelligent Transportation Operation and Coordination Center built based on big data in Chengdu this year and the transformation of major power grids from traditional power grids to digital power grids. Over the next few years, more advanced infrastructures will be constructed.
Trend 5: Full-Domain Data Integration Reconstructs Enterprise Operation Models.
With the digital upgrading in areas like enterprise and social governance and the rapid development of new retail in recent years, online and offline data integration has been further accelerated. The integration of data in larger ranges can provide more convenience for people’s living and consumption. The novel service models will certainly promote the transformation and upgrading of enterprise operation models as well, which will greatly impact enterprise R&D, production, and other activities, and promote the transformation and upgrading of the supply chain system and structure. For example, with the help of cloud services and the Full-Domain Data Middle Platform, Red Dragonfly, an established shoe enterprise, not only achieved work resumption on the cloud during pandemic control but also improved marketing and operation efficiency through a more accurate understanding of customers. It also provided customers with personalized services and obtained leading rapid response and innovation abilities with data-driven management decision-making on strategies, finance, supply chain, and talents.
Trend 6: Intelligent Scenarios Erupt, Creating New Product Forms and Business Models.
Along with the trend of full-domain data, integration is the eruption of intelligent technology’s application scenarios. AI is essentially a kind of data mining technology. By collecting extensive, sufficient, higher quality data, it can be foreseen that AI technology will be applied to more fields. With the development of intelligent industries under the development trend of full-domain data integration, the employment structure of enterprises will undergo great changes that will create many new occupations. Relevant reports show that China lacks over 5 million professionals in the AI field. The integrated development of the industrial chain, education chain, and professional chain is a new talent training model that is currently being explored, with the aim of providing professionals for the New Infrastructure.
Trend 7: Financial Services Enter Various Life and Production Scenarios and Further Upgrade from “Internet Plus.”
The financial industry has always been the forerunner of information technology-driven innovation. The deep integration of digital information technology, AI, and the financial industry has continuously provided innovative vitality for financial development. Today, financial enterprises are embracing new technologies and building new finance. An important feature of new Internet-based technologies is openness. The development of information technology is gradually eliminating barriers to social resources and promoting cross-border flow and sharing of digital production factors. In this context, the financial industry is bound to develop towards openness, transparency, sharing, and inclusiveness. In “Bank 4.0,” Brett King says, “Banking services will be ubiquitous in the future, but not in banks. Young people may have a clearer understanding of this opinion because they hardly go to bank offices to deal with services. For them, banking services exist in mobile phone applications and consumption scenarios. The scenario-based banking services certainly do not mean that traditional financial institutions, such as banks, will disappear, but that the forms of providing and getting financial services will change in essence.”
From the Internet to the Internet of Things (IoT), China has been from exploring and following to applying and leading the way, constantly tapping into the technological dividends in the Digital Economy Era. It is also because of the rising of the “New Infrastructure” and the integration of full-domain data that intelligent scenarios can achieve breakthroughs in many fields and the digital economy can be so impressive.
Trend 8: Transformation from Fragmented Works to Overall Intelligent Governance
Digital Governance is not just simply to set up a few government websites or migrate offline works to online platforms, but to change the interaction model between government, citizens, and economic organizations represented by enterprises through interconnected data APIs of all departments. In the past, when people went to government agencies to go through formalities, they usually had to go back and forth between different agencies. That is because each department has its own data management system and information is not shared. Digital Governance aims at interconnecting data of various departments to form a centralized data platform at the “back end.” By doing this, people can go through formalities in one place instead of several agencies. The realization of Digital Governance requires collaborative governance of the government across departments, levels, and regions.
For example, through an online service platform called “Zheliban”, people in Zhejiang province can get more than 500 services at home, such as inquiring about social security funds, applying for medical insurance cards, and handling birth certificates. The society is like a big network. There used to be many nodes in the network and every node must be reached for going through formalities. Now, these nodes are connected through scientific and technological means, so any formality can be completed in just a single step. In the past few years, the Chinese government has promoted “Internet Plus Government Services” and improved the accessibility, efficiency, and quality of government services with the help of the Internet, so the public can feel more satisfied. With the ability to complete the processes in a single step in Zhejiang province, and the “approval in seconds” and online approval in Guangdong province, Jiangsu province, and other places are all using the Internet to reshape government services and realize the transformation from fragmented works to overall intelligent governance.
Trend 9: The Transformation from Imperative Governance to New Collaborative Governance of Government, Society, and Individuals
Digital Governance not only makes it more efficient and satisfying to go through formalities but also brings about changes in governance logic from a more profound level. In the past, the handling of affairs relied on top-down administrative imperatives, but there were always many special situations at the grassroots level. Therefore, it was difficult for administrative imperatives to pay attention to all sides. However, under the new model of Digital Governance, there are also bottom-up feedbacks to form a cooperative governance model of interaction between the government and the public. For example, there is an online virtual village in Ninghai, Zhejiang, which connects villagers and the service team composed of village cadres, agricultural technicians, and comprehensive grid workers. When villagers need to ask questions or reflect their demands, they can upload questions or demands in text, pictures, voice, and other ways. All members of the service team can view these issues and respond quickly. The channel for uploading appeals and issuing feedbacks was constructed, so the enthusiasm of the villagers’ participation in village affairs was stimulated. Today, over 180,000 villagers have registered in the online village, and there have been more than 20,000 appeals uploaded over the last year.
Trend 10: Production and Governance Begin to Integrate with Precise Online Services for Enterprises Becoming a Focus of Governance.
In addition to solving people’s living problems, providing precise online services for enterprises is an important focus of Digital Governance. With the development of digital technology, massive data accumulated over a long time can be used by the government for data mining to empower enterprises and support the development of industries. Take the “Qinqing Online Digital Platform” in Hangzhou as an example. The Platform has become a channel for government departments to provide enterprises with policy supports and become a platform for interaction between enterprises and the government. As an application serving as City Brain, the Platform can coordinate data of government departments at all levels at the back end through the central system of City Brain, while quickly responding to and dealing with applications from enterprises at the front end. For example, enterprises that wanted to declare housing subsidies for employees needed to submit five to six materials and certificates before. Now, after logging on to the Platform, they can obtain data through the central system of City Brain for comparison and directly distribute subsidies to employees’ personal bank accounts. Another example is that after the launch of the Enterprise Code, the government can realize real-time data sharing by establishing enterprise data warehouses, data supply chains, data central systems, and data sharing mechanisms. The comprehensive use of these data can better price the loan risk of enterprises as well. Therefore, enterprises can access the Zhejiang Financial Comprehensive Service Platform to obtain fast financial loans in seconds.
With the help of science and technology, efficient Digital Governance has become more popular, and people’s ever-growing needs for a better life have been solved.
“Guanghua School of Management — Alibaba Cloud Sky and Cloud Digital Ecosystem Program” Has Officially Released
The “List of Ten Major Trends of 2020 Digital Economy” shows profound changes brought by digital technology in all aspects. Before COVID-19, digitalization may have only been used to enable some enterprises to live better. After the pandemic, digitalization has become the key to the survival of many enterprises. To jointly and actively explore the transformation and development path of enterprises in the fields of organization and management, business model, transformation, and upgrading in the Digital Economy Era, Guanghua School of Management and Alibaba Cloud have explored innovative cooperation areas in the research of digital economy and digital transformation. The two parties jointly released the “Sky and Cloud Digital Ecosystem Program.”
The Program is dedicated to combining classic digital transformation research from enterprises with cutting-edge practices to promote the digital transformation of the Chinese government and enterprises. According to the Program, both parties will rely on the Digital Ecosystem Program to jointly conduct benchmark enterprise visits and in-depth surveys on “industrial analysis, enterprise digital transformation, digital organization, and leadership.” They will work together to develop cutting-edge cases of digital transformation in China and explore innovative digital case forms. They will also work together to develop digital transformation courses and create communities for high-end professionals’ communication about digital innovation.
Appendix: “List of Ten Major Trends of 2020 Digital Economy”
Research Team of Guanghua School of Management, Peking University:
Zhang Ying, Vice President and Professor of Marketing Strategy and Behavioral Science, Guanghua School of Management, Peking University
Lei Ying, Professor of Department of Marketing, Guanghua School of Management, Peking University
Wang Chong, Professor of Department of Management Science and Information Systems, Guanghua School of Management, Peking University
Yi Xiwei, Professor of Department of Organization and Strategic Management, Guanghua School of Management, Peking University
Catch the replay of the Apsara Conference 2020 at this link!