Highlights of the Computing Conference 2018 — Empowering the Economy through Data and Technology

Hangzhou Government Officials: Digital Hangzhou for a Younger Hangzhou

Daniel Zhang: Alibaba Drive Economic Growth through Technology

Simon Hu: “Hangzhou Plan” Has Become a New Term

Hangzhou ET City Brain 2.0 Expands Scope of Jurisdiction

Wang Jian: Paving Digital Roads in Cities with Data

Ant Financial’s CTO Cheng Li: Alipay Building Overseas pPresence

Jeff Zhang: Alibaba Sets Up New Chip Subsidiary

Jack Ma: Embracing New Manufacturing for the Future

Appendix: Transcript of Jack Ma’s Speech

  1. From New Retail to New Manufacturing
  2. This is the ninth Computing Conference, and ten years has passed. It is said to have attracted a record level of 60,000 attendees, which has already reached the venue’s maximum capacity. Everyone here comes with belief.
  3. Only 300 to 400 engineers showed up at the first conference, which was held in a hotel. There was nothing to show and nothing to see. What we had were only some exchanges of ideas and thoughts. But now, we have gathered here the world’s most cutting-edge technologies and high-tech wonders. The Computing Conference is different from other science forums and exhibitions. Many people come here not to sell products but to demonstrate and share ideas.
  4. Today we are here because we choose to believe. We see because we believe. That’s why we come here every year. We hope we never suspend this conference, where we can hear many new concepts and ideas.
  5. In 2016, I talked about my vision of the future of society. China, in particular, will enter an era of New Retail, New Manufacturing, New Technology, New Finance, and New Energy. Many people disagreed with the concept. Some even said they could make up hundreds of such “New” things, and others told me that the “New” word was inappropriately used. I knew it was inappropriate. They tried many adjectives for what is now New Retail, but I personally thought all these adjectives were inappropriate, so I just called it New Retail for the moment.
  6. In fact, New Retail has practically redefined the retail sector. Today, we will focus on New Manufacturing, because it will soon bring sweeping threats and opportunities for China and even the whole world. When I was in Shanghai a few days ago, I also talked about New Manufacturing. In the next 10 to 15 years, everyone in the manufacturing industry will suffer unprecedented hits. We must get ready and be fully prepared for the future.
  7. The manufacturing laggards, instead of the manufacturing industry, will be doomed
  8. Some say that the days of physical manufacturing are numbered. In my opinion, it is not the manufacturing industry, but the manufacturing laggards, who will be doomed. This technology revolution will last for 50 years. The next 30 years will see the application of change in every aspect of society, not only in technology but also in ideology. Whereas IT aims to control the future, DT seeks to create the future. Whereas IT turns human beings into machines, DT seeks to make machines human-like.
  9. Whereas the age of IT nurtures the manufacturing industry, the age of DT shall nourish creativity. Whereas IT depends on knowledge, DT requests the wisdom of human beings. Whereas IT is to benefit ourselves, DT is to benefit others. DT is based on a platform thought. A platform should not pursue the expansion of scale, but aid others in development.
  10. Some people say that when an enterprise grows big, it will become a platform. I say, an enterprise becomes a platform only when it seeks to benefit others and help them grow. The age of IT requires standardization, whereas the age of DT asks for uniqueness, personalization, and flexibility. New Manufacturing is derived from DT thinking.
  11. In the next 10 to 15 years, traditional manufacturing enterprises will suffer grave pain. In the face of the technology revolution, increasing challenges from the external environment will make it more and more difficult for a traditional enterprise of high resource consumption to survive. Turning away from New Manufacturing is like driving in blindness, because you won’t know who your customers are and what they want.
  12. The whole manufacturing sector should be well aware of this situation and refrain from being content with the status quo, especially for some enterprises that have profited somewhat from online marketing. It doesn’t matter whether you have embraced the Internet or not, every manufacturing enterprise should prepare for tomorrow and think about how to cope with the future. In the future, a successful manufacturing enterprise must be a New Manufacturing player who is good at using the Internet, the IoT, cloud computing, and big data. Because those who are bad at these new technologies will be laggards and will be doomed to fail.
  13. New Manufacturing will redefine the manufacturing industry
  14. New Manufacturing will redefine the customer market, supply chain, and all kinds of manufacturing, business operations, and services. It will lead a technology revolution. New Manufacturing does not mean the simple combination of Internet enterprises and traditional industries, or a product plus a chip. New Manufacturing requires customization, personalization, and intelligence. You must know who your customers are and whether there is data in your means of production. In the Industrial Age, people invented assembly lines to realize mass and standardized manufacturing. However, assembly lines in the digital age should also enable personalized manufacturing.
  15. The Industrial Age requires the ability to manufacture one kind of product at scale, whereas the digital age calls for the ability to manufacture various kinds of products. In the past, producing 2,000 of the same garment in 5 minutes using an assembly line might be impressive. From now on, producing 2,000 different garments in 5 minutes will be more impressive! Two decades ago, fashion brought all the ladies in a village or even a whole province the same garment to wear. Today, fashion brings every lady a different garment to wear.
  16. The core of on-demand manufacturing lies in data. Future manufacturing will rely on data, which will become an essential means of production. In the past, manufacturing depended on electricity, whereas future manufacturing will depend on data and computing power. Chips, AI, big data, and cloud computing will reshape today’s production workshops in the same way that steam machines and petroleum oil changed the handicraft industry.
  17. In the current fledging IoT market, many players are still selling hardware and software products, but the difference is that they use the IoT concept to boost sales. IoT is essentially an Internet of Intelligences (IoI). An IoT without intelligence is no more than a vegetable. We already have numerous cameras connected to the Internet. Yet without sufficient computing power to process the data, those cameras are only used for imposing fines. What a waste of data!
  18. Chip technology is the core technology in which we are still some distance away behind developed countries and established enterprises. But in the domain of IoT and chips, we can catch up. China has the world’s largest Internet population and Internet market, which offers a good opportunity for us to build our own chips. Sometimes, a weak foundation makes it easy to achieve leapfrog development.
  19. Future manufacturing will be driven by data, with big data as a means of production, cloud computing as productivity, and the Internet as a production relationship. Big data is not merely a matter of data. It requires strong computing power. Computing power plus cloud data constitute what we now call big data.
  20. In the past, manufacturers and Internet enterprises looked down upon each other. Traditional manufacturers said they were the ones who bred e-commerce, but Internet enterprises argued that those manufacturers were unable to sell their products without e-commerce. The truth is neither can survive without the other. In the future, an algorithm expert will not work inside the office, but write code in a workshop. New Manufacturing is a melding of the manufacturing and service industries. Note that there will be no pure manufacturing or pure service industry in the future. We can no longer rely on the manufacturing industry to create jobs.
  21. New Manufacturing is a melding of the manufacturing and service industries
  22. There are people who suggest we boost employment through manufacturing. I don’t agree. Manufacturing will not be the impetus for employment because of the application of AI, that is, robots. The true engine of creating jobs lies in the service industry. While New Retail entails the integration of online and offline, New Manufacturing is not the integration of physical and virtual, but that of the manufacturing industry and the service industry. It is the perfect merger of the manufacturing and service industries. The competitive edge of New Manufacturing lies not in manufacturing itself, but in the underlying creativity, experience, and service capabilities.
  23. Manufacturing will no longer be the key to creating jobs. I think for a country like China, the modern service industry shall be the main engine for creating jobs. Because assembly lines entail standardized work that can be easily taken over by machines.
  24. Trade wars target traditional manufacturing
  25. Traditional manufacturing is a target for trade wars. We promote New Retail not for our own sake, but to introduce a new approach to retailing to everybody. And we promote New Manufacturing not for Alibaba’s sake, but to help reform the manufacturing industry. New Manufacturing will fundamentally disrupt the traditional model of value creation where manufacturing is dominated by manufacturers. In the future, manufacturing will be dominated by customers. New Manufacturing is not exclusive to large enterprises, and can be leveraged as a magic weapon for small and medium-sized enterprises (SMEs).
  26. Over 90% of the machinery and equipment in China are not interconnected. They stand separately from each other. If we can realize the interconnection of all the machinery and equipment and the intelligent control of all the production lines and their data, we will be able to revolutionize the economic development pattern. Trade conflicts are inevitable in a technology revolution and are unavoidable during the development of China-US relations. Conflicts are more than normal for the long-term economic relationship between the US and China which has a history of 30 to 40 years.
  27. I believe trade conflicts will definitely hurt many SMEs, but I also believe it will develop a number of excellent enterprises. Those who embrace new ideas, new concepts, and new technologies will be winners in the future. All outstanding enterprises have weathered economic downturns or other disasters. Enterprises that have not undergone any setbacks are unlikely to maintain their competitive advantages today even if they have grown big.
  28. In the face of the present trade war, all I want to say to all the entrepreneurs and start-ups is that no matter what they do, always maintain composure, and make long-term mental preparation. The US and China will not call a truce in this trade war in the next two months or two years. Enterprises may continue to struggle for the next 20 years, and the only thing you should do is to work in a down-to-earth manner, because 20 years is enough time to develop any enterprise into another Alibaba or Amazon. It only took 19 years for Alibaba to become what it is today.
  29. We must realize that the manufacturing in the future will be based on “made on the Internet.” The mode of trade is dominated by parcels, rather than containers, and the driver of trade is not factories or enterprises, but consumers. When manufacturing has no borders and everyone can engage in trade, all the rules will be reshaped, and trade wars will never break out.
  30. New technologies constitute the new productivity, and the development of new productivity requires the corresponding new production relations. For both the government and large-scale mature enterprises, the biggest difficulty in pursuing innovation lies not in the tolerance of failure and mistakes, but in the traps and obstacles set by obsolescent interest groups to jeopardize the new productivity. Protecting these obsolescent powers is often the most important factor in undermining innovation.
  31. The manufacturing industry is on track to reform. A few days ago, I visited the Taobao Maker Festival, and I was astonished by the creativity and innovation of today’s young people. It is not the manufacturing industry that hinders innovation, it is the traditional manufacturers; it is not China that is not creative, it is you; it is not today’s Chinese young people who do not work hard enough, it is us. The era of New Manufacturing is coming. If you don’t speed up, brace for changes, or transform, you will pay for your inaction in the next 10 to 15 years.
  32. So I urge all manufacturers who are here or not here today to join the transformation wave without delay. The challenges that retailers have faced in the past 10 years will soon fall on manufacturers. We must realize that a country protects you not because you are an entity enterprise, but because you are the future and you have a strong belief.
  33. I believe all enterprises present at the conference believe in the future and are willing to embrace the future; otherwise, you would not be here. I am impressed that all of you are sitting here listening, learning, and thinking. I hope the Computing Conference will be an event for sharing and exchanging of ideas forever, rather than just product marketing.
  34. I hope the conference will become a future-oriented genuine event without empty talks. I also hope everyone here can make more new friends and learn more new things. Thank you.

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