Frost & Sullivan Insights
China, as a global manufacturing powerhouse, contributes a high proportion of manufacturing output value but faces challenges such as a shortage of high-quality labor and rising labor costs. By investing in AI technology for production processes (such as quality inspection and patrol checks), replacing traditional manual labor with intelligent technology effectively solves the challenges faced during the transformation and development phase of manufacturing, achieving cost reduction and efficiency improvement while completing the digital and intelligent transformation of manufacturing.
Thanks to factors such as algorithm upgrades, data volume growth, and reduced computing power costs, AI technology will gradually be commercialized and applied to various industries, bringing significant cost reduction and efficiency improvement opportunities to each sector.
With the intensive application of AI scenarios during the pandemic, increased implementation channels, and continuous maturation and openness of technology, China's AI industry is expected to enter a golden period of rapid growth. On July 20th, Cui Nan, consulting director for Frost & Sullivan Greater China, said in an interview with Securities Daily that thanks to factors such as algorithm upgrades, data volume growth, and reduced computing power costs, AI technology will gradually be commercialized and applied to various industries, bringing significant cost reduction and efficiency improvement opportunities to each sector. Multiple scenarios will see an explosive period of AI technology application.
Recently, Qixin Beacon Data Research Center under Hefei Hehe Information Technology Co., Ltd. and Shanghai Hecheng Chuangxin Enterprise Management Consulting Co., Ltd. released the "AI (2010-2021) Industry Development Research Report" (hereinafter referred to as the "Report").
The Report shows that the innovation and transformation capabilities of AI technology are improving year by year, with industrial invention patents accounting for 65% of the total industry; from 2010 to 2020, the total financing amount of AI enterprises reached 3 trillion yuan, indicating broad market prospects.
Looking at the regional development of AI enterprises, the Beijing-Tianjin-Hebei region has more basic layer enterprises represented by cloud computing and chips, ranking first among the four major economic circles. The Yangtze River Delta region focuses more on application layer development, including industrial, financial, medical, and other implementation scenarios.
Text and face recognition scenarios have significant growth potential in the future
The Report found through statistics of cumulative financing events for existing enterprises from 2018 to 2021 that the main financing events in the AI industry occurred in the intelligent application layer, with a total of 2,803 financings and an amount of 736 billion yuan obtained.
In AI application scenarios, general-purpose applications such as intelligent text recognition, face recognition, smart factories, and genetic testing are gradually being widely used by the public and are also applications with high growth potential in the future.
Since 2021, China's AI industry has focused on building open-source algorithm platforms and innovating in key areas such as learning, reasoning, and decision-making, as well as image and graphics.
Under the strategic deployment of an AI powerhouse, China's innovation and transformation capabilities in AI technology are gradually improving. As of April 30, 2021, industrial invention patents (including authorized and applied) accounted for 65% of the total industry patent count. The Report shows that there are a total of 930,000 invention patents under application in the AI industry, with 350,000 authorized invention patents.
According to the Report, from 2016 to 2020, the average annual new application growth rate of invention patents in the AI industry was 5.55%, and the average annual authorization growth rate was 16.56%. The technology innovation activity in the AI field has been relatively active in the past five years.
“Taking manufacturing as an example, China, as a global manufacturing powerhouse, contributes a high proportion of manufacturing output value but faces challenges such as a shortage of high-quality labor and rising labor costs. By investing in AI technology for production processes (such as quality inspection and patrol checks), replacing traditional manual labor with intelligent technology effectively solves the challenges faced during the transformation and development phase of manufacturing, achieving cost reduction and efficiency improvement while completing the digital and intelligent transformation of manufacturing.” Cui Nan, consulting director at Frost & Sullivan, told Securities Daily reporters.
The Yangtze River Delta region focuses on application layer development
Generally speaking, there are multiple sub-industries within the three major layers of AI. The basic layer includes sub-industries related to big data and cloud computing; the technology layer includes sub-industries such as machine learning, computer vision, smart voice, natural language understanding, etc.; the application layer includes AR/VR, autonomous driving, smart application devices, supercomputers, etc.
The Report points out that in terms of geographical distribution, from technological innovation to invention patents, the AI industry is mainly concentrated in the Yangtze River Delta and Beijing-Tianjin-Hebei regions, with Beijing and Shenzhen leading the country in innovation.
Due to the acceleration of the integration process between AI and the real economy, the innovation resources of the AI technology industry are gradually showing a trend of "northward" and "southward" migration, and the competitive pattern of various innovation application pilot areas begins to emerge.
From the perspective of the regional development focus of AI enterprises, the Beijing-Tianjin-Hebei region has more basic layer and technical layer enterprises represented by cloud computing and chips, as well as AI algorithms and machine learning, ranking first among the four major economic circles. The Yangtze River Delta region focuses more on application layer development, including industrial, financial, medical, and other implementation scenarios.
“In terms of implementation scenarios, industries with high levels of digitization and large data volumes, such as internet, finance, and healthcare, have deeper AI applications, driving cost reduction and efficiency improvement in the industry. The development prospects of AI lie in application, so the regional distribution of AI enterprises is also related to the local industrial ecosystem and talent structure. The Yangtze River Delta region focuses on application layer development mainly because the region's industrial, financial, and healthcare industries are developed and have rich implementation scenarios, making it the most mature.” Yu Baicheng, dean of Zero One Research Institute, analyzed for Securities Daily reporters.
“The Yangtze River Delta region has the highest level of economic development, providing the richest variety of application scenarios. Moreover, the rapidly developing economy urgently needs AI technology to improve efficiency, so the R&D motivation for AI at the application layer in the Yangtze River Delta region is stronger, which can directly generate economic benefits. In addition, the Yangtze River Delta has strong capital, with powerful momentum to promote various R&D and technological implementation at the application layer, showing regional characteristics.” Wang Yongyuan, vice president of research at Shanghai Yichang Investment Co., Ltd., told Securities Daily reporters.
With the intensive application of AI scenarios during the pandemic, increased implementation channels, and continuous maturation and openness of technology, the Report predicts that China's AI will experience another period of rapid growth from 2021 to 2025, entering a golden period.
“By 2025, the investment of national public departments and enterprises in AI technology will exceed one trillion yuan. Thanks to factors such as algorithm upgrades, data volume growth, and reduced computing power costs, AI technology will gradually be commercialized and applied to various industries, bringing significant cost reduction and efficiency improvement opportunities to each sector. The mature application scenarios of AI technology have also expanded from early urban management to industries such as manufacturing, finance, automotive, consumer electronics, healthcare, education, etc. Multiple scenarios will see an explosive period of AI technology application.” Cui Nan told Securities Daily reporters.
*This article is reprinted from Securities Daily, authored by Shi Lu, with the original title "AI Innovation and Transformation Capabilities Gradually Improve, with the Yangtze River Delta Region Focusing on Application Layer Development". Click belowRead the original articleto view the report.
