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Digital Platforms Boost Resilience of Industry and Value Chains

Oct 08-2022   



Digital platforms can enhance the resilience of industry chains and value chains in the three dimensions of operation, region and ecosystem by improving management efficiency, pulling and empowering digital industry belts, and facilitating key technological innovations, wrote Zhu Li, NSD Associate Researcher, in a commentary.

 

In line with global trend, China’s top authorities have made the strengthening of industry chains and value chains a major task, and the critical role of digital platforms has come to the fore. A blueprint for 2021-2023 aims for the making of three to five industrial internet platforms with international influence and further improvement in new infrastructure by 2023, observed Zhu Li.

 

She noted that digital platforms, through digital operations that cover the entirety of industry chains, not only pulls and empowers enterprises to improve management efficiency but also adds to the operational resilience of industry and value chains. Referring to Peter Drucker’s emphasis on productivity and innovation, Zhu Li pointed out that China can unlock more profits in its manufacturing prowess. She cited Japanese research which shows that a 10% decrease in production costs is equivalent to doubling in market sales, and a 1% increase in capital turnover rate is tantamount to a 10% gain in market share. Midea, a Chinese conglomerate, has made significant headway in this regard.

 

Digital platforms integrate and agglomerate offline industry chains and online industry ecosystems; as such, they pull and empower digital industry belts and solidify the regional resilience of industry and value chains. According to the research arm of Alibaba, China boasted over 3,000 digital industry belts in 163 cities in 2021, and as a whole the belts grew by nearly 30 times from 2013 to 2021. It was found that when a digital industry belt hosts 1% more suppliers, its online scale expands by 3.4%.

 

Another role of digital platforms is facilitating and safeguarding key technological innovations, so as to power enterprises high up in the value chains and augment the ecological resilience of industry and value chains. She suggested that in light of the constraints posed by bottleneck digital technologies, enterprises should build a digital ecosystem that puts the application of Chinese technologies at the core while remaining inclusive, proprietary and controllable, so as to boost the resilience and security of the country’s industry and value chains in the long term.

Digital Platforms Boost Resilience of Industry and Value Chains

Oct 08-2022   



Digital platforms can enhance the resilience of industry chains and value chains in the three dimensions of operation, region and ecosystem by improving management efficiency, pulling and empowering digital industry belts, and facilitating key technological innovations, wrote Zhu Li, NSD Associate Researcher, in a commentary.

 

In line with global trend, China’s top authorities have made the strengthening of industry chains and value chains a major task, and the critical role of digital platforms has come to the fore. A blueprint for 2021-2023 aims for the making of three to five industrial internet platforms with international influence and further improvement in new infrastructure by 2023, observed Zhu Li.

 

She noted that digital platforms, through digital operations that cover the entirety of industry chains, not only pulls and empowers enterprises to improve management efficiency but also adds to the operational resilience of industry and value chains. Referring to Peter Drucker’s emphasis on productivity and innovation, Zhu Li pointed out that China can unlock more profits in its manufacturing prowess. She cited Japanese research which shows that a 10% decrease in production costs is equivalent to doubling in market sales, and a 1% increase in capital turnover rate is tantamount to a 10% gain in market share. Midea, a Chinese conglomerate, has made significant headway in this regard.

 

Digital platforms integrate and agglomerate offline industry chains and online industry ecosystems; as such, they pull and empower digital industry belts and solidify the regional resilience of industry and value chains. According to the research arm of Alibaba, China boasted over 3,000 digital industry belts in 163 cities in 2021, and as a whole the belts grew by nearly 30 times from 2013 to 2021. It was found that when a digital industry belt hosts 1% more suppliers, its online scale expands by 3.4%.

 

Another role of digital platforms is facilitating and safeguarding key technological innovations, so as to power enterprises high up in the value chains and augment the ecological resilience of industry and value chains. She suggested that in light of the constraints posed by bottleneck digital technologies, enterprises should build a digital ecosystem that puts the application of Chinese technologies at the core while remaining inclusive, proprietary and controllable, so as to boost the resilience and security of the country’s industry and value chains in the long term.