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SHI Zhanzhong:Opportunities emerge from the pandemic crisis for this industry to buck the trend

Office of Alumni and External Relations 2020-03-26

When Chinese New Year was approaching in 2020, a novel coronavirus outbreak swept across the country. The epidemic disrupted China's economic growth, brought huge uncertainties, and wrought havoc upon many industries to various degrees. However, opportunities emerge from the pandemic crisis for the "intelligent+" industry to buck the trend and gather the momentum.

The pandemic will eventually pass, but its broad impact on China's future industrial economy will remain far-reaching. China's economy will be galvanized by the priority given to innovation, the expectation of new economy and the focus on "intelligent +" industry. New models of intelligent manufacturing, new pan-Internet business forms, and new ways of caring for life and health will also gradually become emerging trends of social and economic development in China.


"Emerging trends" in the development of three industries

There will be "emerging trends" in the development of three industries amidst the pandemic.

First, industrial intelligence will speed up. Artificial intelligence (AI) technology is driving industrial revolution. "Industrial intelligence" has become the prevailing trend in modern economic development, with new technologies, products, models, and business forms gradually taking shape. A slew of national policies and scientific research funds have supported and incentivized the prompt launch of AI-driven innovation projects in various regions, resulting in rapid growth in the "intelligent +" industry. According to a list of Top 100 Chinese AI Companies released by CCID Consulting, China's core AI industry is expected to go beyond RMB200 billion yuan in 2021. It's projected that this pandemic will greatly shorten the period for digital and intelligent transformation of traditional industries, especially manufacturing. AI, big data, cloud computing, etc. will once again undergo explosive growth, while machines will replace humans at a faster pace in enterprises, with numerous unmanned workshops and factories expected to fuel the wheels. For example, Foxconn has completed "lights-out factories" for precision machine components, intelligent cutter, precision assembly, and package testing etc. These "lights-out factories" have saved manpower by 88% and improved efficiency by 2.5 times, breaking the conundrum that workers were unable to return in time during the pandemic. Industrial intelligence is the only approach of transforming "Made in China" into "Intelligent manufacturing in China", and it will exert a huge impact upon whether China can evolve from a "large economy" to an "economic power" in the world.

Second, some service demands have shifted from offline to online. The pandemic has the most direct impact on offline service industries, where some consumption scenarios have started to shift online, further adding to the percentage of online consumption. For example, the Spring Festival blockbuster "Lost in Russia" broke the traditional business model of movie theater by streaming online. Alibaba, Tencent and other Internet companies have swiftly developed big data to find missing persons, search nearby fever clinics, and receive online medical services, meanwhile educational training, office meeting and other industries have also gone online, with e-commerce, short video, games, pay-for-knowledge, online office software, etc. have witnessed peak traffic.

Third, 5G integrated applications have created new business models. During this pandemic, fixed-point deployment and slicing application of 5G took the spotlight, underscoring the advantages of 5G - "high speed, wide connectivity, low latency" and other technical features. 5G, converged with AI, big data, cloud computing and other intelligent technologies, is further applied in the sectors of intelligent manufacturing, telemedicine, large-scale live streaming, online education, distributed office, etc., thus gaining valuable experience for innovation in 5G application. For example, 5G + VR technology has enabled netizens to watch the entire process of the construction of Wuhan Leishenshan Hospital as "cloud supervisors". In the meantime, 5G network has supported 4K / 8K remote high-definition consultation and high-speed transmission and sharing of medical image data.


"Intelligent +" industry has been galvanized

in response to the pandemic

The COVID-19 pandemic has formed an overwhelming force providing an unprecedented opportunity to develop "intelligent +" industry and reshape the ecosystem for intelligent economy. It is crucial to shift from input-driven growth to innovation-driven, high-quality growth by seeking opportunities from disasters, reshaping the organic growth mechanism of intelligent economy and society, seizing the "time window" of digital, internet-powered, and intelligent development, making breakthroughs in "new technologies, business forms and models" and exploring new growth momentum and development path.

First, auxiliary diagnosis and treatment with intelligent healthcare ensures safe diagnosis and treatment in hospitals. In diagnosis, AI medical imaging technology is well capable of completing early CT scan reading. In medical diagnosis, online consultation on the Internet platform provides professional remote guidance for stay-at-home patients with mild symptoms, effectively relieving fever clinics from overload. In research of new medication, AI, underpinned by big data and computing power, is capable of screening data from massive literature and experiments to assist scientific research institutions in shortening R&D cycle. It is also capable of providing comprehensive data support for the R&D of targeted drugs against the virus by studying its variation sites. In tracking epidemiological history, big data analysis bolsters the establishment of infection models, precision analysis and scientific prediction. In treatment, Shanghai Children's Medical Center (SCMC) has launched an AI robot "Xiaobai" to assist medical staff in making consultations and remote ward rounds in the isolated area for suspected cases.

Second, building smart cities helps better prevent and control the pandemic while improving work efficiency in this regard. During the pandemic, the smart city brain system platform is capable of monitoring dynamic data of non-local vehicles into the region in a real-time fashion, especially vehicles with license plates in key regions via regional data resource aggregation and analysis, and submitting relevant information to the pandemic prevention and control command center, which gets all the more efficient in decision-making based on the judgement of the pandemic prevention situation with the support of vehicle entry monitoring and big data analysis. It is projected that investment in smart cities will increase in many cities after the pandemic to facilitate the upgrading of urban network communications infrastructure, integrate healthcare big data platforms across various hospitals and regions, and consolidate smart city systems such as early warning for epidemic outbreak and emergency management. This will also bring huge development opportunities for AI companies with strong technological capabilities and system integration solutions.

Third, intelligent logistics responds to urgent needs during the pandemic to ensure livelihood. During the pandemic, intelligent logistics system has effectively ensured the production and living needs for urban residents. For example, Dada Group deployed its transport capacity during the Spring Festival to ensure the delivery of living supplies for residents during the epidemic, and launched “contactless delivery service" to minimize risks, while largely enhancing logistic efficiency via Lights Out Operations (LOO) in sorting and distribution by introducing intelligent solutions such as trackless AGV, intelligent sorting line, intelligent tridimensional storehouse etc. JD Home launched a big data price monitoring mechanism and joined hands with other businesses on the platform to fully ensure various anti-epidemic supplies and stabilize prices. Meanwhile, the demand for unmanned delivery spurred by the pandemic has created new market space for the service robot industry.

Fourth, intelligent education meets the needs of e-learning, driving innovation in education. During the pandemic, intelligent education is capable of helping students learn online at home to avoid the risk of infection caused by gatherings on campus. Following the postponement of class resumption in primary and secondary schools, remote education and video classrooms have been widely promoted, resulting in an explosive growth in demand for online education. The Ministry of Education (MOE) has launched 22 online curriculum platforms offering 24,000 high-quality courses for free. Traditional offline educational training agencies such as New Oriental, TAL, etc. have launched online courses. Starting from February 17, relevant live streaming courses on China Education TV Channel 4 (CETV-4) via satellite-based platform has covered remote and impoverished rural areas, especially those with weak network signals and no access to cable TV. Zhixue.com of iFlytek has provided its public cloud education platform for primary and secondary schools in Hubei free of charge, while intelligent education companies like "LAIX" have also offered free online learning resources to the public.

Fifth, intelligent manufacturing further enhances productivity and sustains high-quality economic growth. Most manufacturers in China remain situated in individual premises without strong desire for remote office and multi-site collaboration. The pandemic has once again highlighted the advantages of intelligent manufacturing with Internet-based multi-site collaborative control in effectively addressing labor shortage. The demand for production and work during the pandemic will spur ever faster intelligent transformation of more and more enterprises with larger investment in unmanned factories, workshops, and higher productivity via intelligent manufacturing. A robust rise is expected in high-tech industries such as unmanned retail, unmanned catering, intelligent logistics, drone delivery, and drone inspection, with programs providing scenario experience expected to attract attention again, such as VR / AR.


Policy advice for faster growth

in "intelligent +" industry

First, efforts should be made to adjust relevant fiscal and monetary policies, accelerate the development of intelligent economy, and strengthen the counter-cyclical adjustment where people's livelihood is concerned. It is advisable that government take the lead in setting up a special fund for pandemic relief to appropriately subsidize some potential “intelligent +” enterprises with difficulties in operation; to increase credit guarantee for companies hard hit in the pandemic to apply for loans while adjusting bank lending interest rate as appropriate; to encourage insurance companies to strengthen business innovation, improve the efficiency of claims, and help certain enterprises and industries pull through; to adjust fixed tax payment for fixed taxpayers and private business owners, allow tax deferral for enterprises, and adopt tax relief policies for key entitled enterprises against the pandemic.

Second, 5G-led “Double Gigabit Broadband Cities” at a faster pace and a public service platform for 5G applications should be built. Efforts should be made to build a new generation of IT infrastructure at faster pace, by striving to build "Double Gigabit Broadband Cities" where 5G mobile network gigabit and fiber optic broadband network gigabit coexist, strengthening forward-looking layout, increasing effective investment, and going all out to raise urban energy level and core competitiveness. Efforts should also be made to deeply explore 5G application scenarios for COVID-19 diagnosis, treatment, prevention and control, and overcome key problems and mass-producing a batch of intelligent equipment and products for auxiliary diagnosis, rapid testing, accurate temperature measurement and case identification, etc. to facilitate intelligent diagnosis and treatment, and improve the efficiency of management and control. We should further tap the potential of digital technologies such as 5G, big data, AI, Internet of Things (IoT) in pandemic prevention, monitoring and control.

Third, an AI open innovation platform should be created to enable SMEs to innovate and grow faster. Efforts should be reinforced to encourage leading companies to create AI innovation service platforms that are open-source, shared and collaborative, as well as to form a big data resource pool, algorithm and technology core platform, to facilitate algorithm development and iterative optimization by SMEs, effectively reducing their cost, and speeding up their collaborative innovation. Government demonstration application projects need to be standardized, meanwhile special investment funds can be established for developing the AI industry, broadening investment and financing channels for the "intelligent +" industry in an effort to enable SMEs to innovate and grow faster.

Fourth, we should prioritize key areas such as education and healthcare, urban management and intelligent manufacturing for scenario-driven application of intelligent technologies. For urban management, we should give full play to the advantages of government resources, develop and apply various types of intelligent systems at a faster pace relying on research strengths of all parties concerned, as well as improve resource reserve and response capacity under emergency or extreme events. For healthcare, we need to propel the application of products such as remote online intelligent diagnosis and treatment system, promote R&D of surgical robots and corresponding operating systems, and intensify the intelligent monitoring and prevention of sudden illnesses, epidemics and common diseases. For education, we need to build intelligent campuses and online education and training platforms for personalized learning, thus transforming and innovating education and teaching. For intelligent manufacturing, we have to remain committed to building intelligent decision-making and machine learning models based on enterprise production data, as well as enhancing human-machine interaction and collaborative production capabilities underpinned by AI technology.