Things happen quickly in digital transformation—and not just in terms of digital disruptions.
A few years ago, it seemed China was lagging behind in digital transformation—content to produce copycat apps and services but not investing in their own innovative piece of the digital marketplace. Fast forward to 2019, and China has become a true global powerhouse, accounting for 40 percent of global e-commerce transactions (compared to just 1 percent a decade ago) and set to play a leadership role in the rollout of the ubiquitous—and highly necessary-5G. Indeed, with a new influx of savvy, innovative digital workers moving into the country, China has the chance to start making its own tech disruptions—even in areas like AI and machine learning, which previously belonged to Silicon Valley. It’s time for American companies to take notice.
Raise Your Hand If You’ve Been Ignoring China’s Tech Boom
You’re not alone. Even we at Futurum had doubts about its ability to pull rank and lead in digital transformation. That time is officially over. The following are just a few reasons we should all be paying attention to China’s tech boom.
- Competition. I think we can all agree we underestimated China’s ability to become a global manufacturing powerhouse. After losing a lion’s share of its manufacturing business to China in the 1990s and 2000s, millions of Americans lost their jobs. Indeed, many experts agree it was China’s growth—not automation—that led to American job loss in that time period. Do we really want to underestimate China’s ability to innovate on the tech side, to an even costlier detriment? Clearly, the answer is no. American businesses need to start looking at China as a powerful competitor in digital transformation—not just a lagging bystander.
- Opportunity. In 2016 alone, China accounted for 11 times the mobile payments of the United States, and the value of those payments was greater than France, the United Kingdom, Germany, Japan, and the United States combined. As a business person in digital transformation—that’s something to pay attention to! The country’s key digital players (Alibaba, Tencent) reach is in the billions. In that sense, China’s tech boom isn’t a small bang, it’s an absolute explosion. American companies need to start thinking where they can harness that magnitude of China’s tech boom with their own digital innovations.
- Partnership. It’s projected that by 2020, the U.S. will take over China in global manufacturing due to its advanced smart factories and predictive analytics capabilities. China will undoubtedly make up the difference somewhere—most likely in technology. That’s not bad for the United States. Traditionally, China has had trouble adding business value to its services. Business leaders worldwide may be able to harness some of the new technologies coming out of China and utilize them in new and innovative ways in their own businesses. Partnering together to our strong suits, we may be able to develop unbelievably impactful business solutions. Global leaders like Qualcomm have already noticed the opportunity, working with China to develop the company’s 5G infrastructure
Why China’s Tech Boom Could Be Good for All of Us
I may be alone here, but I don’t think China’s tech boom is bad for the rest of us. Though the country may be responsible for taking some jobs from Americans in the past, I think the global economy is changing so rapidly that there is plenty of room for us both to benefit from the country’s advancement. From 5G to fintech, we’re seeing a bigger focus on consumer-driven tech development in the country, with new business models that may inspire change here, as well. For instance, China has been expert in “disintermediation”—removing the middle man by connecting consumers directly to their favorite suppliers in almost any industry. They’ve also been key in “disaggregation”—separating certain tech services to make them more efficient and accessible to different people.
What I know for sure is this: all of us should be constantly learning from one another in digital transformation. That’s how the biggest and best ideas are born. From what I see, China is in a place where they can now teach us valuable things, and where they can play more meaningfully on the powerful things we teach them. Whether you see the country as competition or potential collaborate partner—it’s time to start paying attention.
The original version of this article was first published on Futurum.
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