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China 's High Tech Covid-19 Response: Another Step Towards Global Technological Leadership?

2020/03/26
COVID-19

China’s high tech Covid-19 response: Another step towards global technological leadership? 

China’s entrepreneurs are getting it right. What lessons should global leaders learn from it? 

Co-written by Sandrine Zerbib and Aldo Spaanjaars – China veterans and experts of “Dragon Tactics”. 

 

China’s high tech Covid-19 response

• The SARS epidemic (2002-2003) fueled the early successes of China’s e-commerce and with it laid the foundations for the unprecedented digital development the world has seen in China. 

• The speed and innovation of China’s digital companies are propelling many of them towards global leadership. 

• Corona innovations may create an entire new stream of possibilities. 

In 2003, Richard Liu, the founder of JD.com saw no alternative but to sell his multimedia products online when the SARS outbreak affected the country and brought traffic to his offline store down to a trickle. 

Alibaba became an even bigger success story that can trace itself back to the days of this deadly respiratory disease. Taobao, its consumer platform was launched in July 2003, and within two years the start-up surpassed eBay – then the number one marketplace in China - and today has become one of the world’s largest e-commerce platforms and a driving force behind many digital innovations including Alipay. 

For the last decade and a half, we have seen an unprecedented digital development in China. From the ubiquitous WeChat involved in so many daily user journeys, to Fintech solutions, Facial recognition to the rise and increasing global leadership of AI and Machine learning. 

Not surprisingly, China’s response to the COVID19 epidemic has been decidedly high tech. 

And Covid-19 may well be the catalyst to get it ahead globally with technological innovations. 

Once again, the public sector has worked hand in hand with the key private companies of the Chinese digital landscape – the BAT (Alibaba, Tencent, Baidu) as well as the rising stars of Artificial Intelligence, SenseTime and Megvii …– to develop - in a record time - solutions that manage all aspects of the crisis. 

If we were to highlight one particular solution only, it would be the Health QR Code. 

Initially developed by Alipay, with and for the city of Hangzhou, it uses the data collected by mobile operators, mobile payment APPs and other mobile service providers to assign people a health code (green, orange or red) which they show at the entrance of buildings or public transportation. Meanwhile, in France, people can only leave their homes with their manual self-declaration on a piece of paper and in countries like Germany and The Netherlands no declaration is needed at all leaving governments struggling to prevent people from gathering while simultaneously issuing rules that have severe commercial impact. 

Economies around the world are suffering extensively due to inevitable lockdowns to slow the rate of COVID19 infections. A situation we all know cannot continue indefinitely. A digital tool that enables people to start moving around again, resume a daily activity and most importantly allows commerce to continue seems to be the right solution to stop both the spread of the virus and the economical carnage. 

Meanwhile, Corona is driving other significant digital advances that without a doubt will lead to many innovations for years to come. 

- Artificial Intelligence and big data used extensively in the search for a vaccination and treatment. 

- 5G technology, only in its test phase before the outbreak, is scaled up to geolocalize cases and transfer medical files and data. 

- Acceleration of the use of drones, autonomous vehicles and robots, be it to deliver food and other products to confined citizens or to perform necessary tasks in hospitals like cleaning or distribution of medicines to patients. 

- APPs for the general public developed – all in very short time - additional services to inform, reassure and entertain citizens in times of crisis and lockdown, to pinpoint infections in the neighborhood, even help to distinguish between true and fake news and provide hygiene and medical advice and tips such as to where to buy masks and sanitizers, … often all in one APP. 

Of course, one could argue that China has a massive advantage of enjoying more data than any other market, due to the size of its population, the relative homogeneity of its internal market, the pace of its digitization as well as less constraining cyber protection regulations. 

This is only one part of the story. Often not hindered by legacy architecture, Chinese entrepreneurs aggressively invest in building the systems that collect, bring together and interpret various streams of information. 

But what really makes the difference is the speed, the tenacity and the ability to “learn forward” combined with a strong sense of the collective interest and the ability of private companies to partner with government authorities when it can serve public needs. 

Chinese entrepreneurs have always been very close to the market and extremely reactive to consumers. In many cases their speed of new product launches is incomparably higher than in Western markets. 

With the wealth of data available in China, the ability to understand consumers’ reactions and act on it has increased massively and seems to further prove Chinese entrepreneurs’ approach right. 

Today, this is demonstrated by the way the Covid-19 crisis is taken on. Tomorrow, it will be market leading consumer products. Something to learn from. 

Business success in China – and increasingly outside its borders – is based on a new set of management beliefs and practices which are particularly suited for our rapidly digitizing societies and their inherent increase in scale, speed and complexities. Some of these practices, we argue, should be an inspiration for Western businesses. We call them “Dragon Tactics”.