The negative effects that industrial revolutions unleash on human society always stem from an overestimation and abuse of the power of new technologies. It has never been more important to heed this point than today. Big data and artificial intelligence (AI) are bringing forth a new industrial revolution, and the blind worship of these innovations is already on full display in some quarters.
Chinese auto startup Nio just had its $1 billion US initial public offering. While the share price fluctuates, investors ask the same question: will the Shanghai-based upstart supplant Tesla as the world’s top luxury electric car brand? Like Tesla, its cars offer sleek, space-age designs. It also has a flair for marketing stunts: in Nio’s case, setting the fastest lap ever recorded by an electric car at Germany’s Nürburgring. But Nio is offering cutting-edge technology at jaw-dropping prices. Its ES8, priced at RMB 448,000 ($70,000), costs only around half as much as a Tesla Model X does in China.
China’s hospitals are becoming overstretched as population aging and urbanization send demand for health care soaring. But a new wave of world-leading Chinese health technology firms believe they can lift the burden on the country’s frazzled doctors, saving them from the repetitive tasks like reading CT scans. Indeed, the AI health care field has developed incredibly fast in China, with most companies focusing on medical imaging systems that help doctors analyze X-rays, CT scans and tissue analyses for signs of dozens of diseases, from cancers to liver disease.
People love video games. They feel relaxed and entertained in the virtual world. However, there is a trend towards games that are practical and serious—games that are used to teach and train for certain skills. Soldiers, surgeons, securities traders and workers in many other professions train with specialized games. The Brookings Institution estimates that the US military alone spends more than $6 billion a year on video games. “Serious games allow a safe way of rehearsing actions and learning about their consequences as well as transferring previously learned knowledge in as efficient and effective a way as possible,” says computing expert Dr. Andreas Oikonomou.
Few people outside China will have heard of Bytedance, the Beijing-based software startup that creates fiendishly addictive content apps using world-leading artificial intelligence technology. However, more than 200 million people in China—or over one in four of the country’s mobile users—use Bytedance’s products every day, and now the company has ambitions to hook the rest of the world on its apps too. Huge traffic brings customized contents to Bytedance users, which is the magic code for its success. But copyright lawsuits and competition from the BAT companies are just two of the challenges Bytedance faces.
Cities across China are making huge investments in order to transform themselves into world-class innovation hubs. So far, the Pearl River Delta Greater region, led by Shenzhen, Guangzhou and Hong Kong, is the most promising area. Connected by high-speed railways and land bridges, barriers between Hong Kong and mainland have been removed. With Hong Kong as the financial hub, Shenzhen as the innovation center and Guangzhou as the long-term trade harbor, China’s “Greater Bay Area” is taking shape. Will the regional integration create a new innovation engine that China urgently needs?
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.
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.
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.
The sharing economy exploded in China this year, with companies for all kinds of shareable objects taking part in this new business model. While there are businesses familiar to Westerners—shared offices, cars and rides—there are also ideas that seem a little kooky, such as shared basketballs and umbrellas. Although some call it innovative, many realize these companies are just “rental 2.0” companies, assisted by digital technology. As the concept reaches fever pitch, however, it is also facing a reality check, especially as many firms, ballooned by venture capital funds, start to show signs of failing.