The Shanghai Municipal People’s Government issued the Action Plan of Shanghai to Build a High Ground of Innovation in Future Industries and Develop and Grow Future Industrial Clusters (“Action Plan”) on October 11. According to the Action Plan, by 2030, an array of solid results, innovative enterprises and leading talents with worldwide influence will emerge in areas of future health, future intelligence, future energy, future space and future materials in Shanghai with an industrial output value up to about RMB 500 billion, and five future industrial clusters and about 15 future industrial pilot areas will be built. Among them, the future health industry will cover areas such as the brain-computer interface, biosafety, synthetic biology, and gene and cell therapies. The Action Plan also proposes to enhance the “Zhangjiang R&D + Shanghai manufacturing” carrying capacity in Pudong and other areas and build a future cluster for the health industry.

Professor Zhang Yucheng from the Department of Innovation and Strategy (under preparation) of Tongji SEM has recently been interviewed by the 632 Observation column of the Oriental Financial Pudong Channel. During the interview, he focused on the development of future industries and expressed his views on how Pudong New Area can lead the development by relying on its advantages and promote the development of future industrial clusters by legislation.

Q1: What are future industries?

Zhang Yuchen: Future industries are key industries that can drive huge changes in the global economy and society in the next two decades. They have the following four common characteristics: firstly, high dependence on technology, especially ground-breaking technological innovation; secondly, ability to create or stimulate new demand; thirdly, expansion of people’s cognitive and living space; fourthly, motivating people to continuously innovate and promoting the sustainable and healthy development of the economy and society.

Q2: In this Action Plan, Pudong is among the key areas of several future industrial clusters. In terms of building the future health industry cluster, the Action Plan directly mentions the enhancement of “Zhangjiang R&D + Shanghai manufacturing” carrying capacity. What do you think is the purpose of highlighting this point? What role does Pudong play in this Action Plan?

Zhang Yuchen: As I mentioned earlier, future industries highly depend on original innovation, and such complex original innovation has two characteristics.

Firstly, high talent intensiveness. In today’s science, it requires an aggregate of highly intensive high-level talents to accomplish original innovation and it is impossible to rely on individuals. And such aggregates must be rare in the world. They are cores of cores. So, I think Pudong is qualified for that. If we want to accomplish real innovation, we must emphasize the role of Pudong. Innovation is what matters to make subsequent industries feasible.

Secondly, an integrated ecosystem. Pudong is an important national science center that earns its fame not only by the title or the gathering of some scientist teams. We have built a quality and large ecosystem around the Pudong science center. So, I think Pudong has conditions rarely seen in China and even the world and is a rare area that plays a core role. So, Pudong must be emphasized and must play a leading role.

Q3: “Industrial clusters” are specifically mentioned in the Action Plan. The formation of an industrial cluster involves a lot. So, what kinds of roles should be played to achieve such a goal?

Zhang Yuchen: Generally, when we talk about clusters, there is a theoretical model called the diamond model. To form a good model, an industry should possess all the four elements of the diamond model, in which several entities are involved: firstly, competitive enterprises; secondly, entities with demands, such as hospitals that are willing to use the brain-computer interface; thirdly, an abundant supply of production factors, such as talents; fourthly, possession of infrastructure and an industrial chain. There are two additional factors. One is the government: the government should play a promoting role, create good conditions for startups, provide infrastructure and create conditions to enrich production factors. The other one is opportunities, which mainly means that some regions make the best use of the circumstances. For example, the government promotes or guides the industrial layout so that various resources or elements gather in a specific advantageous area; enterprises in the cluster obtain better conditions for development; then an industrial belt is formed and strives to meet international professional standards. “Industrial clusters” will be developed through the efforts of enterprises under the escort of the government.

Q4: Pudong has the responsibilities as a Leading Area and has been given the legislative power over itself, so what contributions can the regulations of Pudong New Area provide? What are your expectations?

Zhang Yuchen: Firstly, encouraging the creation of conditions. Many of the ground-breaking technologies required by future industries involve two aspects: firstly, the cognitive aspect, namely, whether people can accept them; secondly, the ethical aspect and long-term social conventions. For example, the use of the brain-computer interface should be protected by law. If not, there will be problems caused by abuse, and overly conservative people may not use it for fear of breaking the law. So, there must be regulations to tell people it can be used within the modest range. As long as the technologies are not malicious and are exploratory, we should encourage the use of them.

Secondly, constraint management. As long as the door is opened, a large number of good and innovative enterprises, startups and entrepreneurs will be willing to enter the fray and some ill-disposed people will sneak in. So, we must identify and restrain them. When problems develop to become common ones, we need the law to regulate them.

So, new industries are prone to new problems and need the law to provide escort and correspondingly restrain their growth.