As China continues its journey to more balanced growth, based on greater domestic consumption and services, its digital capabilities will determine much of its success. The widespread use of the internet puts the country in a uniquely positive position. China has more than 670 million internet users – and counting and is leveraging its online connectivity in innovative ways with further room for growth.
As noted in the World Economic Forum’s Digital Transformation in Industries reports, companies such as Didi Kuaidi (on-demand mobility) and Alibaba (ecommerce) have raced to billion dollar plus valuations by delivering the speed, convenience and on-demand access that have re-defined the customer experience.
According to a Cisco survey on retail innovation in the Internet of Everything (IoE) era, 89% of Chinese survey respondents are using independent shopping apps (such as JD.com or Tmall) on a smartphone at least once per week, compared with 40% globally.
But further research shows that to realize the full potential of digitization, China will have to go beyond the internet and consumer sectors and ensure that technology permeates all industries and enterprises. A recent Accenture Strategy analysis shows that 22% of the world economy can be attributed to digital skills, capital and intermediate goods and services. In the US, that reaches 33% of GDP, equivalent to $5.9 trillion. In China it amounts to 10.5% of GDP or $1.1 trillion.
In order for China to fully apply digital solutions and add value across its entire economy it will have to invest further in the digital infrastructure on which companies and industries depend for growth and innovation.
Beyond the obvious need for boosting internet connectivity, mobile broadband subscriptions and the number of ICT specialists, China’s greatest requirement is to digitalize business behaviour. In the Accenture Technology Vision 2016, we’ve identified technology trends that are critical to digital success for a company anywhere in the world, not just China. The report identifies five technology trends fueled by a people first principle that are essential to business success in the digital economy. The trends include:
1. Intelligent automation.
Embracing automation – even in a country the size of China that has an unparalleled workforce. Powered by artificial intelligence (AI), robotics and augmented reality, companies can fundamentally change the way their business operates and drive a new, more productive relationship between people and machines.
2. Liquid workforce.
Develop a workforce that has the ability to quickly learn and shift gears so that teams can move from one project to another, adapting to the latest technological trends. Flexibility, continuous education and collaboration are all key buzzwords to re-shifting how we shape employment.
3. Platform economy.
Industry leaders are unleashing the power of technology by developing platform-based business models to capture new growth opportunities, driving the most profound change in the global macroeconomic environment since the Industrial Revolution.
This is reinforced by 81 per cent of our survey respondents who agree that platform-based business models will become part of their organization’s core growth strategy within three years. Leaders in this area include Chinese e-commerce giants who have been bringing together businesses from varied industries.
4. Predictable disruption.
Fast-emerging digital ecosystems are creating the foundation for the next wave of disruption by straddling markets and blurring industry boundaries; forward-thinking leaders can proactively predict these ecosystem trajectories to gain a competitive advantage. Again, China is already embracing this on the retail front, with mobile payment systems and apps that showcase a nation ready to embrace new ideas.
5. Digital Trust.
Trust is a cornerstone of the digital economy, said 83 per cent of survey respondents. To gain the trust of individuals, ecosystems and regulators in this new landscape, businesses must focus on digital ethics as a core strategy; better security alone won’t be enough.
These are all technology trends that Chinese companies could embrace to further digitalize their company and stay ahead of the competition. They are trends that underscore industries – and nations – that embrace digital as a means to improve efficiency, encourage education, and redefine best practice. If Chinese companies pursue these strategies they will put in place a sound foundation for broader-based growth.