Broad industrial digitalization key to future growth

Since the outbreak of the COVID-19 pandemic, industrial digitalization is evolving from spontaneous moves to conscious moves and is ushering in a golden era that is still accelerating the new platform.

China's top industry regulator unveiled a five-year plan to accelerate the integration of digital technologies and real economies amid a broader push to lay down a comprehensive policy framework for the nation's industrial development until 2025. It is critical to drive digitalization and its application in various industries.

To start with, digitalization is an important direction for economic transformation and upgrading. Digital technology is based on the existing reserves of various industries and is driven by the continuous development of cutting-edge technologies.

Digitalization will drive the integration of industry and technology, and more importantly, this integration has no boundaries.

It will also help industries to be more driven by the internet and data, which ultimately will help reduce costs, improve user experience, increase revenue and upgrade business models for industries.

Digitalization has also become increasingly important because economic activities promote the exponential accumulation of data. The popularity of personal terminals and the growth of internet users have both enabled individual data to be accumulated on the internet.

Meanwhile, intensified competition among companies and their need for refined management have pushed enterprises to transform their business strategies, which in turn creates more data-related business formats.

Furthermore, the growing presence of the internet of things and 5G technologies has led to the explosion of equipment, terminals, as well as social, personal and corporate data. On the other hand, the digitalization and informatization from governments have prompted increasing demand for production, storage and consumption.

Market consultancy International Data Corp predicted that China's data growth will lead the world with an average annual growth rate of 30 percent by 2025, 3 percentage points higher than the global average. By that time, China's scale will increase to 48.6 ZB (1 ZB is approximately equivalent to 1 trillion GB), while the United States is expected to reach 30.6 ZB.

Such data will become a key element of the digital economy.

The entire life cycle of data collection, analysis and storage is inseparable from the labor of individuals or institutions. The circulation, transaction, and confirmation of data elements are also affected by business, technology and other infrastructures.

At the same time, they are also restricted by changing digital awareness that future society will undoubtedly become more digital, both in terms of production and life itself.

In the future, data will be used in various scenarios such as production, distribution, exchange, consumption, manufacturing and services, and on a larger scale.

Cross-sector innovations will become increasingly prominent. The cross-penetration of digital technologies into manufacturing, materials, energy, biology and other sectors is deepening, and is thus forming composite technologies, such as smart manufacturing, 4D printing, energy internet of things and biometrics.

The application of advanced technologies also involves technologies such as artificial intelligence, IoT, big data and blockchain. The industry tends to form an application toolbox according to the needs of different application scenarios.

In addition, the construction of new infrastructure will accelerate industrial digitalization. Digitalization in new infrastructure will generate advantages.

As physical space is limited, digitalization in new infrastructure can efficiently respond to emergencies without limits of space and time with greater flexibility and resilience. With such progress, the added value of products and services can also be raised. Also, data elements can play an unprecedented role in driving the economy to new highs.

Although the outbreak of the COVID-19 pandemic has severely affected the country's economy, the digital economy has bucked the trend, not only in maintaining a vigorous development, but also by playing an important role in stabilizing normal economic and social order.

To this end, the pandemic highlights the resilience and advantages of the digital economy, and it also reflects the necessity and urgency of industrial digitalization. In the future, industrial digitalization should create a new paradigm for the development of the digital economy.

The nationwide fight against the pandemic over the past two years has lit a fire for digital transformation of the traditional economy. The COVID-19 prevention and control measures, which were aimed at social distancing and reduced social gatherings, have prompted the shift of offline activities to online.

Life, work, study, medical treatment, consumption and other activities were all shifted online and this has ensured a normal operation of economic and social order.

China is encouraging an in-depth application of digital solutions to pandemic tracking and monitoring, as well as extensive use of related technologies into noncontact services in public services, including government affairs, finance, education, work and lifestyles.

In 2020, total retail sales of consumer goods in China stood at $5.68 trillion. During the same period, national online retail sales saw an increase of 10.9 percent over the previous year.

Now, the digital transformation of the traditional economy is mainly happening in the following four aspects in China.

First, the contactless economy has accelerated, and many industries like online retailing, online education, online medical care and online workspaces have seen stepped-up growth.

At the same time, sectors such as live entertainment, cinemas, sports, conferences and exhibitions, which largely relied on offline scenarios, have increased their migration to online platforms.

Second, new marketing methods such as live broadcast e-commerce have soared. A large number of internet influencers, as well as top executives of traditional industry giants and even local government authorities, have joined in the transformation, thus driving optimization and upgrading of the traditional industrial chain.

Third, the digital transformation of traditional financial institutions has accelerated significantly, and demand for online and intelligent services such as online customer acquisitions, digital marketing, intelligent risk control and intelligent customer service has taken off.

Finally, it has become increasingly imperative for cities across the nation to build smart cities, which include smart transportation, smart medical treatment and smart governance. The construction of smart cities has greatly improved public services and organizational capabilities of urban areas, and in turn has brought the pandemic under better control.

To sum up, promoting industrial digitalization is not only important for the cultivation of China's economic power, but also to the country's competitiveness worldwide.

The use of internet, new technologies and related applications to transform traditional industries will be carried out in a comprehensive way, and will affect the entire industrial chain.

Together, they will effectively increase factor productivity and give full play to the effect of "magnification, superposition, and multiplication" for economic development.

The writer is chief economist at JD Digits, the digital technology subsidiary of e-commerce platform JD.

The views don't necessarily reflect those of China Daily.