Mr. Guo Chongqing, Advisory Dean of the School of Economics & Management of Tongji University and also academician of CAE delivered a speech entitled “Internet Plus: a disruptive innovation in the form of industrial, economic and social reform” at the “Internet Plus Management Science Seminar” held in Tongji University on 6^th June 2015. In his speech, Mr. Guo first introduced the definition, scope and connotation of the term “Internet Plus”, and then elaborated on major economic issues and social concerns based on the innovative development and vision of internet technologies. Through the elaboration, he actually pointed out the direction of China’s industrial reforms in this internet era. According to Mr. Guo, “Internet Plus” totally changes the traditional approach of industrialization and the old pattern of economic and social development. It is a kind of soft power that can help China promote economic and social transformation and upgrading. China will one day stand out because of “Internet Plus”.

If captured, opportunities will come; if missed, challenges will arise

President Xi Jinping pointed out in his recent speech that China is at a historic juncture of a new round of scientific and technological revolution, industrial reform and economic transformation. If we seize this critical moment, we seize the opportunities for development; But if we miss the moment, we will be faced with great challenges.

“Now we have to face the reality that the integration of human society, computers and the physical world has led information service into a “computing for the masses” era. This is an epic.”

Mr. Guo pointed out that the information technology is changing dramatically and without limit. Its scope and pace is way beyond our expectation. Information revolution has exerted much bigger influence than industrial revolution. Each industry has to integrate information techs through reform in order to keep up with the time and survive. Today the traditional manufacturing industry is faced with the real problem: our products and services are falling way behind the trend of information technology development in that they are not digital, intelligent and inter-connected. For example, the traditional manufacturing just replaces the animals (mostly cattle) of the agrarian age with diesel engines for the making of tractors. It’s far from intelligent and the manufacturing industry finds it hard to meet consumer demands.

The change of the new era has attracted global attention. The United States drew up the “National Strategic Plan for Advanced Manufacturing” in 2012. Later Germany issued “Maintaining the Position of An Industrial Base in the Future—Proposition of the Future Plan of ‘Industry 4.0’”. In this year China launched the “Internet Plus” and “Made-in-China 2025” initiatives. Andy Grove, the former CEO of Intel, once said: “The Internet will redefine IT”. Today the Internet will redefine every industry.

What is “Internet Plus”?

“Internet Plus” has become one of the hottest buzzword in China and people have been rather interested in it. Then what on earth is “internet plus” and what is the connotation of the phrase?

Mr. Guo gave a detailed definition of “Internet Plus”, that is, using internet technologies (mobile Internet, cloud computing, big data and the Internet of Things) to reform the traditional manufacturing industry, economy and the society based on the Internet concept of openness, equality, collaboration and sharing, with the aim of achieving a sustainable economy and society featuring openness, justice, harmony, competition and cooperation. “Internet Plus” advocates openness, public participation, benefits for the masses, disintermediation, equality and justice so that it weakens geographical distance and information asymmetry in economic activities and helps strengthen the dominant position of consumers.

“The past is about cement and concrete iron. Now it is all about fingertips and clicks.” Mr. Guo said. The way the cities develop and the way we live have changed profoundly. With the integration of information and the physical world, the energy level of China’s economy and society will surely be upgraded.

Mr. Guo believes that “Internet Plus” is a kind of destructive innovation. The process will not be smooth, even full of pain and resistance. But it will lead us into a brand-new economy and society.

The world being changed by market-driven technologies

Mr. Guo repeated in his speech by saying “Today the world is being changed by market-driven technologies.”

He pointed out that “Internet Plus”, when implemented, will surely encounter economic and social problems. An open internet economy naturally requires the breaking of the country’s closed industrial pattern. Therefore, we may expect changes in sectors including finance, energy, military industry, transportation, telecommunication, education and medical service.

Platform-based open innovation is an inevitable path for mass innovation. Given the fact that technological resources are allocated globally, the competitiveness of a business is decided not only by its own tech resources, but also by its ability to integrate social and global resources. Now it is difficult for a single company, or even a single country to have advantages through the entire value chain of a certain product. So businesses have to work hard to keep competitive only in areas with the biggest added value. Today manufacturers around the world find it impossible to develop products on their own as they did in the past.

According to Mr. Guo, “Hardware plus Software plus Service Integration” may summarize the future trend of product development. In other words, the future products and services will be defined by software. The core value of the products in the market no longer lies in the products themselves, but in the services provided. Consider Google, LeTV, smart phone apps, and the worldwide popular Uber app. These companies are marketing their services in order to get a bigger presence. So it is necessary to redefine each phase of the manufacturing value chain from R&D, design, manufacturing, from sales to service, and to launch new products, procedures and services based on internet technologies.

When talking about the “Internet Plus Medical Service” program, Mr. Guo quoted statistics saying that in China the annual amount of outpatient services is up to 7 billion, and there are 200 million hypertension cases and 170 million diabetes cases nationwide. From a positive side, as the Internet develops, artificial intelligence may one day assist doctors in making the majority of diagnoses online. Moreover, departments such as surgery, testing, medical imaging, chronic disease management and pharmacy may be separated from hospitals and patients can have access to one-to-one medical services at home, thus possibly making households the main place for medical care. Mr. Guo also discussed the idea of “Smart City” in his speech. He believes the building of “smart cities” requires new governance concepts, open data and the engagement of internet enterprises. For example, Guizhou, a once remote province in China, now leads the nation’s “Smart City” program with its cloud service platform. This wouldn’t have been possible without an open and forward-looking local government.

When talking about the “Internet Plus Smart Countryside” program, Mr. Guo said that China used to focus on the construction of the hard environment in rural areas in its effort to build a new countryside. Now as the Internet develops further, online education, employment, shopping, medical service and entertainment will give new impetus to the development of the rural areas. The integration of information and the physical world will help propel the building of a new and smart countryside in China.

Lastly Mr. Guo discussed education based on the Internet. He believes in the age of Internet, abundant information technologies and resources can help stimulate students’ potentials in six aspects, namely, language, communication, observation, logic, imagination and creativity. He quoted Harvard President Drew G. Faust as saying that: “Universities are especially good at ‘thinking differently’. To every generation facing a daunting task”. The “Internet Plus Education” program aims at training students across many disciplines. Students of science and engineering in particular are the main driving force of the “Internet Plus” project. The public is looking forward to universities to think differently. Ren Zhengfei, Liu Chuanzhi and Hou Weigui have become role models. Ma Yun, Ma Huateng and Li Yanhong have also gained reputation with their achievements. Mr Guo expressed the hope that there will be more youth entrepreneurship like Kuangchi Science and DJI-Innovations to really make a difference of the new “Internet Plus” age.