Outlook Special Edition – The Soaring Smart New Economy

2016-03-10 Posted by:admin Categor:Project cooperation
The smart new economy (second economy) concept is rapidly spreading all over the world. In China, it is being increasingly used to promote industrial integration as well as industrial restructuring and upgrading.
The smart new economy is also known as the “Second Economy.” It is a new economic form combining traditional industries with more complex information, communication and Internet technology.
Brian Arthur is one of the first economists to propose this concept. In his writing he defines the “Second Economy” as follows: The original brick-and-mortar businesses are becoming digital businesses. Many business processes that used to occur person to person are being completed electronically and taking place in a fully digital realm. The “Second Economy” relies on big data, the IoT and other emerging technologies to a great extent. It fully combines brick-and-mortar industries with the virtual economy to cover production, circulation, consumption and living, forming a smart and upgraded new system.
Over time, the new generation of entrepreneurs has applied the second economy to China’s economic life. RECON Group is an industrial and financial conglomerate practicing smart economy development in China. RECON’s Chairman of the Board, Xia Jiantong, is one of the first entrepreneurs to advocate and practice the concept of the “Smart New Economy”. In practice, relying on smart information technology, with the smart information systems platform at its core and innovative finance and smart circulation as two pillars, RECON is committed to building a new ecosystem for the smart economy industry by investing in and integrating urban life, health and agriculture, transportation and new energy, logistics and tourism, culture and sports.
Digital Approaches and Smart Technologies
Since the smart new economy largely relies on big data, the IoT and other emerging technologies, such as IT-based platforms like the big data center, must be in place before we can apply the concepts and tools of the smart new economy.
Today, people increasingly rely on the internet’s digitalization technology in work and life. When we talk about “Internet+”, when the state promotes the implementation of the “Internet+” strategy, everything must actually be achieved on a digital basis, and we must stress the innovation of combining digital technologies with traditional industries.
For example, in the development of RECON’s smart industry chain, RECON started with the smart city industry chain. As early as ten years ago, Teamax Technology Group, founded by Xia Jiantong, began infrastructure construction and planning for smart city-related industries, and promoted the shift of some domestic cities from “digital cities” to “smart cities”.
Whether RECON’s earlier “digital cities” or later “smart cities”, the core technologies, such as the geographic information system (X-GIS) and the data-sharing platform (EHUB), are based on the smart big data platform.
Teamax’s sky map geographic information system (XGIS), for which Teamax has independent intellectual property rights, has been applied to urban management, emergency warning, command and public services, energy management, resort management, water conservation and hydropower, and shipping logistics in many domestic cities. RECON’s integration of related resources is also based on technology-provided big data and the construction of its own big data center.
Digitalization is a prerequisite for the smart new economy as well as the cornerstone of smart living. Smartnessis a higher level of operation based on digitization. Smartness requires not only the capability to gather varied digital information but the capability to comprehensively analyze and apply various needs represented by digital information as well. Only with these capabilities will it be possible to realize smart production and smart living, or as economists say, basing production on sales, distributed manufacturing and shared living.
From smart production to smart living, this new economic ecosystem encompasses many industries. If an enterprise is equipped with the smart new economy concept, the capability to apply smart technologies, and a strong ability for capital operation, it can become an emerging enterprise to harness the smart new economy (second economy).
Driving Industrial Restructuring and Transformation
Some experts believe that in the economic “New Normal”, the smart new economy concept can facilitate breakthroughs and the transformation of traditional industries. Of course, the enterprises that are capable of leading the transformation must be those with technological reserves and digital application abilities.
RECON is again a good example. Five years ago, following the construction of the smart information infrastructure system, Xia Jiantong began to strategically build a financial and logistics platform. In its industrial development plan, RECON identifies smart information technology as the engine, and capital finance as the driving force integrating industrial resources.
RECON Capital has set up a number of industrial buyout funds and has long begun to attempt a variety of models of industrial acquisition and reorganization. Its idea for acquisition and reorganization is to provide traditional industries with smartness, and observe and transform traditional industries from a higher level and a broader angle. Therefore, RECON often does not just acquire and merger a single enterprise on the industry chain, but also acquires and mergers upstream and downstream enterprises in the industry chains of traditional industries. In doing so, RECON can control their logistics, sales and other platforms, conduct big data analysis of the market demand and the operating situation of the industry chain, base production on sales, improve the operating efficiency of all enterprises on the industry chain, and ultimately realize smart industrialization and industry intelligentization.
It is understood that RECON is providing some local governments with integrated “smart city” solutions to cure the “city diseases” in urban operation and management, urban construction, urban investment and industrial development. The information thus obtained can also serve RECON’s six industry platforms, help its subsidiary companies make the right marketing decisions, and provide consumers with smart products and services. At the core is still the smart information system based on the sky map geographic information system (XGIS) and the data-sharing platform (EHUB), as well as the capabilities to analyze the big data.
Some industry experts pointed out that the remodeling of Lotus MSG is a typical case of RECON using the smart new economy concept to give smart pillars to traditional industrial enterprises. Although the post-merger integration is still in progress, and RECON’s integration of the smart agriculture and general health industry chain is ongoing, the synergistic effect is already manifesting itself, and Lotus is again showing vitality.
Smart and Humanistic
The concept of humanistic care is also integrated into the smart new economy, which clearly facilitates the spread and practice of the smart new economy concept.
The “smart city strategy” of RECON and Teamax is inseparable from big data analysis, the IoT and other smart technologies, but the ultimate goal is precisely humanistic smart cities.
From a global perspective, smart city construction can be divided into three stages: First, the technology-based smart cities centered on digital technologies, and focusing on the development of advanced information, communication technology, and infrastructure construction; second, the management-based smart cities centered on municipal management and focusing on enhancing urban management and operational efficiency; third, humanistic smart cities based on humanism and focusing on improving the cities’ livability and humanistic care.
Cities are generally places where human resources are the most concentrated. Management-based smart cities simply combine the original urban management and related traditional industries with new technologies. Technology-based smart cities just combine information technology, communication technology, and internet technology with traditional industries to a higher level, and while the combination produces a new economic form, the degree of smartness is inadequate. At best, the technological, operational and organizational models of traditional industries are systematically upgraded, but the integration of brick and mortar industries and the virtual economy is far from perfect, making it impossible for the social economy to achieve a breakthrough from quantitative to qualitative changes in terms of scale and efficiency.
Humanistic smart cities represent the ultimate direction of smart city development. As people’s understanding of smart cities deepens and “people-oriented” urbanization progresses, more and more people have realized that technology and management are the goal of smart city development, and that smart cities should ultimately make city life better. To achieve this goal, we must instill more humanistic care into smart technologies. Only after that can we facilitate the full integration of the brick and mortar economy with the virtual economy, drive humanistic urban construction and management, and achieve real breakthroughs of related industries in terms of scale and efficiency.
Smart technologies do not actually stop at the technological level. Reporters were told that in the course of practicing the concept of smart new economy, RECON incorporates the elements of Chinese culture and a human life philosophy, and is committed to “the practice of combining modern smart theories and technologies with traditional Chinese cultural values”.
What the smart new economy advocates is to ultimately achieve smart living and smart production. At the level of city life, it aims to build a smart city ecology, improve urban management and operation, and provide better public services so that people can enjoy convenient transportation, livable environments, and a healthy and happy life created by human smartness. At the production level, it aims to achieve smart production, avoid waste of resources, and curb overcapacity. (Text / Reporter Zhong Zhiyuan)