Wang Guangyu: Industry and Finance Integration is Key in Promoting Innovation
On January 31st 2016, “China’s Supply Side Economics 50 People Forum 2016 Annual Conference” was held in Zhengzhou. This year’s conference theme is “leverage supply-side reform in leading the 13th five-year developments.”
In his speech titled “The Revolution in Cognitive Technology and Opportunities for Industry-Finance Combined Capital,” CSC Chairman Mr. Wang Guangyu said that, industry and finance must be combined in order to drive innovation. The crux of new supply side reforms is the “eight doubles and five equals,” one of them being innovative path for the country and call for entrepreneurship, valuing innovation, increasing technological spending, enhancing the productivity of technical elements are crucial in shifting China from the world’s largest manufacturing powerhouse to a smart manufacturing super power.
Summary of Speech:
Mr. Wang shared about his thoughts on technology and innovation from 3 aspects:
1. The smart computing era has begun:
The news of Google AlphaGo robot’s triumph over a human go champion has made everyone wonder whether robots can really challenge professional players. Google’s robot used two strategies: policy network and value network, which help the robot select good moves, showing deep machine learning and evolving abilities, and ability to overtake its adversaries in a short period of time. Artificial intelligence is becoming the most salient mark in the new technological revolution, technology companies in the fields of machine learning, quantum computing, and artificial intelligence are reshaping the industry landscape, and triggering the deep reform of social structure and financial markets.
From the earliest relationship between man and machine to the current intelligent cognition era, computers evolved from “executing after programming” to interactive learning with man, to enabling self-programming and executing new tasks; previously man adapted to computers, now computers are learning to adapt to man. Through cloud computing, social networks, mobile terminals, virtual reality etc., people realize their needs for technology and expand their problem-solving capabilities.
2. Cognitive technology brings disruptive innovation
Cognitive systems help people tackle the complex problems that arise from rapid developments in our world, such as environmental protection, diseases, poverty etc. A parallel universe already exists outside our reality, made of a massive and interconnected data information world from social network sensors, business, R&D, military and government, at 100% growth every year. This parallel world is recording information from 7 billion people continuously, and cognitive technology is the brain of this world, that simulates our efforts in understanding our reality better. For instance, how a mega city is run internally, and how the city and people relate to each other, is something both the city management and citizens need to understand.
The Netherlands initiated a data triangle project two years ago, as 20% of their land is above sea level, they need dam and data system to stop and split sea water, river water, and rain water. They need to integrate a big data system to improve the water grid’s intelligent management, monitor timely all the dam structures, use satellite and embedded sensors to continuously monitor hydrology data, build models to predict dam’s normal reaction vs. alarms of abnormalities, integrate historical and current data for forecasts etc. This huge eco-system cannot be completed by the government alone, but through a public-private collaborative data system, they can develop cognitive technology, invite government, universities, and enterprises to participate in order to provide valuable references on city administration.
Cognitive technology has made significant developments in the healthcare and finance fields. For instance, in financial mergers, under the cognitive technology development trend, companies can process merger information better, deploy crisis management and competitive analysis, evaluate acquisition targets comprehensively using the new technology system, identify risks, and uncover synergies. The biggest disruption applies to the areas combining internet and finance, where blockchain shared finance is changing traditional finance; whether micro-small businesses, individuals, or traditional funds/banks/insurances are all considering how to handle the network-facing innovative finance.
Cognitive science is leading many changes in the transportation, energy, and industrial sectors, but we remain in the early stages of cognitive science development. The new era is not decided by machines, but people who make and use these machines. The goal of cognitive system is not to replicate human brains and replace humans with machines, but to promote better collaborations between humans and machines. Machines are more rational and analytical, with encyclopedic data storage and computing power; while humans are superior in judgment, intuition, emotions, morality and creativity; combining the two will bring significant improvements in technology, and extend and improve our life on earth.
3. Combining Industry and Finance Integration is the Key in Promoting Innovation
The crux of new supply side reforms is the “eight doubles and five equals,” one of them being the innovative path for the country and call for entrepreneurship, valuing innovation, increasing technological spending, enhancing the productivity of technical elements are crucial in propelling China’s shift from the world’s largest manufacturing powerhouse to a smart manufacturing super power. Capital markets value high tech companies at a premium, and gives cognitive technology strong support. Why is the US so powerful and able to attract so many high tech talents? Without Wall Street, there is no Silicon Valley. If china cannot build such technology and finance system, it would be very difficult in clearing the channel for industry-academy-research. Only given high capital premium, can experts and researchers value the industrialization of R&D and bring high returns, instead of stalling at the academic exchange and bonus level. Chinese capital markets valuation system will go through major changes, and only when listed companies are encouraged in increasing R&D spend instead of copying, and only when investors give emerging tech companies higher valuations, will there be technological innovations. There needs to be more investments in the cognitive technology projects, and different financing institutions need to provide more support and conveniences to R&D personnel, and future capital markets at different layers need to open their doors to tech companies.
Cognitive technology is valued worldwide. In 2013, the EU and the US announced 1 billion and 3.8 billion funds respectively to initiate the human brain initiative. China should plan for artificial intelligence and cognitive science from a national strategic level. In our book “2049: Emerging Intelligence,” we called for valuing China’s aritificial intelligence development as much as aeronautics technology. China cannot be left behind in this field.
Cognitive technology is a real revolution, as future machines will release humans from repetitive and tedious labor and increase the use of human rationality and imagination, to create a better future.