China’s financial sector used to be famous for its poor service and imperviousness to innovation. Even today, when customers go to make a transaction at one of the country’s big state-run banks, they often take a bag of snacks with them—they know they’re in for a long wait. But things are changing fast in the Middle Kingdom. A new generation of digital finance firms is taking the country—and the global markets—by storm in everything from digital payments and micro-lending to insurance and wealth management. How will China’s lumbering state-run banks react? Will tightening regulation nip this revolution in the bud?
In the eyes of insiders, if you are not talking about “AI and Finance,” then you risk being left behind–just as stubborn holdouts in another era were stranded when they failed to accept the Internet. Traditionally, finance has had two core functions: to lower transaction costs and to improve asset pricing. The use of the Internet has undermined the first by enabling more direct transactions, and AI is now disrupting the second by improving the speed and accuracy of asset pricing. Threatened by this are services like asset allocation, investment advisory and insurance pricing, which affects not only banks, but also investment and insurance firms.
Imagine a city where commuters are chauffeured to work by self-driving cars and artificial intelligence systems control every power plant, traffic light and light bulb, making road accidents, power cuts and even traffic jams a thing of the past. Thanks to 5G, the latest protocol for mobile communications, this vision may be realized soon. The world’s leading telecoms companies are already testing the next generation of wireless internet and the first 5G services could be rolled out in 2019. China and the US are locked in a furious battle for control of this and the winner will gain a big economic advantage for years to come.
Google Home and Amazon’s Alexa have been catching on very quickly. Google reports that it sells a voice-controlled speaker every second. While this could just be a fad, some analysts argue that the voice-activated speakers may mark the biggest shift in consumer technology since the smartphone. “Humans don’t really communicate that effectively using text,” says Richard Watson, a futurist in London. Vocal computing should speed up a lot of queries, given that most people can speak much faster than they can type. What has voice-control changed? What are the new opportunities vocal computing will offer?
Chinese tech giant Tencent surpassed Facebook in market value this November, and is the first Asian company worth more than $500 million. Unlike Facebook, which earns 97% of its revenue from advertising, online advertising only represents 16.9% of Tencent’s revenue, according to the company’s Q3 2017 report–lagging behind domestic competitors like Alibaba in terms of ads gain. Determined now to gain a larger slice of the digital advertising market, Tencent focuses on improving targeting and algorithms to intensify ads on its ubiquitous platform WeChat while not undermining the user experience, as well as leveraging opportunities in the company’s other products and services, including mobile games.
BGI, China’s biggest genetics company, offers genetic testing services around the world and did an IPO on the Shenzhen Stock Exchange in 2017. In 2016, the company recorded revenues of RMB 1.7 billion ($261 million), with a net profit of RMB 350 million ($54 million)–an increase of 28% over the previous year. However, in a country prone to market hype, there are those who view BGI’s dramatic stock performance with a dash of skepticism: The market valuation of BGI is high, mainly because there is room to imagine future developments in the genomics industry. BGI’s future success will hinge on its ability to lead the technology change, and that is no small challenge.
What does it mean to have a mind? What is the nature of intelligence? Such questions have motivated Brian Christian, a computer scientist who holds a philosophy degree. He has been studying the gaps and overlaps between humans and machines, and investigated dehumanized communication as a result of increasing machine interactions in his bestseller The Most Human Human. In his second book, Algorithms to Live By, co-authored with cognitive scientist Tom Griffiths, he says that computer science actually gives us a way of thinking in new terms about what it means to be rational.
Are smartphones making us smarter? Bosses are especially concerned about this at the workplace because people check their phones as often as 150 times a day–meaning we may be distracted more than 50% of the time at work and have lower productivity. However, our devices are good for relationship building, and having a good friend at work tends to extend an employee’s stay at a job. In addition, smartphone use helps ensure that the workday never really ends and work time can extend into evenings and weekends. This could be both good and bad news because long hours can translate into lower productivity and, eventually, illness.
How do big multinational companies innovate? According to Kapil Kane, Director of Innovation at Intel China, there are three ways: partnership, acquisition and in-house development. The problem with the last of these is that in-house R&D laboratories may be good at invention but not at innovation—that is, finding new uses for, or making improvements to, existing products and processes. Kane aims to fix this at Intel China with his Ideas2Reality (I2R), a startup program nested inside Intel’s China operation that encourages employees to submit ideas, which are vetted, incubated and accelerated using the same principles used by leading Silicon Valley accelerators like Y Combinator.
Although China views space exploration as important for bolstering national prestige and influence, boosting national defense, and promoting domestic industries and economic realignment, the country’s space program is still far behind the United States. It has fast caught up fast with other nations, however. China aims to send a rover to Mars and launch a manned space station by 2020, and is also testing the ability of astronauts to stay on the moon for extended periods. And while the government increases its efforts, private companies are also joining to make a presence in space exploration.