Innovation and entrepreneurship hold the key to China’s future, because they would boost its productivity to continue raising its living standards and maintain its competitiveness, a member of the Managing Board of the World Economic Forum told China Daily in an exclusive interview.
While China’s rise as a global economic power was fueled by the flow of rural labor toward industrializing and urbanizing regions of the country, this flow is slowing. As such, China will need to boost its productivity, a key indicator that defines how rapidly an economy can grow without rampant inflation, said Lee Howell, head of WEF’s Global Programming.
He made the comments ahead of the Annual Meeting of the New Champions, also known as Summer Davos, taking place on Sept 9-11 in Dalian.
“This[the productivity concern] is why the meeting will convene in Dalian under the theme of Charting a New Course for Growth,” Howell said.
The meeting, a leading global gathering on innovation, entrepreneurship, science and technology, will welcome more than 1,700 participants from 90 countries.
This year’s meeting is highly technology-focused, with two of the six thematic tracks devoted to the topic.
“Arguably, science and technology are the greatest agents of change in the modern world. As for China, such changes are already underway: A new generation of digital entrepreneurs are disrupting industries, and a new generation of researchers are filing more patents than any other country in the world,” Howell said.
He said while the first “machine age” began with the steam engine, which substituted our physical power, the second machine age will be driven by artificial intelligence and ubiquitous connectivity. In short, machines will substitute and augment our cognitive power. Many technologists expect that artificial intelligence will go beyond recognizing our friends’ faces and driving our cars for us: The utopian scenario is that technology will make rapid communication, information acquisition and knowledge-sharing more accessible and widely available.
In China, Internet Plus has become a national strategy as Internet and mobile technology are changing the landscape of retail, health, finance, transport and housing – virtually every industry. For Howell, it is an excellent example of how China is moving from an efficiency-driven stage of development to an innovation-driven one. It is also a very positive move toward unleashing the creative potential of China’s huge human-capital resources.
“This is critical, as I believe that human talent, not financial capital, will be the great driver of growth in the 21st century,” he said.
In addition, Internet Plus builds on an area where China is already an innovator, not just in terms of companies, but also in terms of business models, as many Chinese Internet companies have had to find commercial success without the strong advertising markets that companies in the West have been able to build on, according to Howell.
He said WEF shares China’s assessment that the Internet and related industries – while being a driving force behind the evolution and growth in the global economy over the past decades – remain “underused” and would benefit from further public-sector investment.
The Chinese government has given high priority to “mass innovation and entrepreneurship” to spur the vitality of the economy. As a staunch preacher of innovation, the founder and executive chairman of WEF, Klaus Schwab, recently remarked that countries will be described not so much as “emerging” or “advanced”, but rather as “innovation-rich” or “innovation-poor”.
“I fully agree with him that the winners will be those countries that have been successful in implementing long-term structural reforms to enable businesses to flourish and talent to be developed in ways that allow wealth to be shared across all the population,” Howell said.
He said China’s leaders have signaled their clear intent to pursue such policies and are showing promise in implementing them despite near-term economic challenges. He stressed that it is important to frame future competitiveness in terms of “the entire enabling environment”, rather than one set of factors.
Technology also plays a pivotal role in efforts to address climate change, and this year WEF has specially devoted one of the six theme tracks to that topic (“environmental boundaries”).
Last year, China and the United States reached a landmark agreement to cap emissions by 2030. Howell said this was a breakthrough in terms of breathing fresh life into the process leading up to the UN climate talks in December.
“And China’s emergence as an increasingly prominent voice in the debate offers us great encouragement that a global commitment can be reached,” he said.