Earlier this year, 15 of our tech leaders headed to China to learn how they approach tech and innovation. Here, Stuart talks about some of his key takeaways from the trip.
Artificial intelligence and machine learning are frequently heralded as the future of our industry. However, what this actually looks like is often less well defined, and in reality many businesses already have some form of intelligent computer algorithms supporting the human decision makers. So what does genuine innovation look like? Approaches and products developed in China may provide a glimpse.
China has a strategy to dominate the world of AI by 2030. Following a recent trip to explore how AI is being deployed across this vast economy, it would be hard to bet against it. The first thing that hits you in China are the omnipresent cameras. These are constantly capturing facial images as you travel around towns and cities. The sheer number of cameras installed has quickly built the largest monitoring system on the planet. China is a world leader in Facial Recognition technology, developing, deploying and training applications to drive access to services. The Robot Hotel, where check in is done via facial recognition, is a striking example of this. Connected to the Chinese identity system, the lift recognises guests, stops at the floor they need, and then opens the door to them!
In the Chinese market, the enormous volume of data available – and the ever-growing power to interpret it – has resulted in exponential levels of product prototyping, happening at exceptional speed. For example, a wide range of micro insurance opportunities has been generated at Chinese companies. Inexpensive short-term policies – for example to protect goods in transit – are generated at point of sale, offered to consumers and accepted in a matter of moments which, when delivered at the scale of China’s enormous population, becomes a very attractive proposition, despite the low value of each transaction.
These propositions are generated and delivered direct to consumers’ mobile devices via highly specific models driven by big data, using predictive modelling and machine learning. A good example of this is Alibaba’s partnership with insurer Zhong An, which ensures every item is covered with purchase guarantee insurance from the time of distribution to delivery.
The Alibaba/Zhong An collaboration is a good example of a new partnership model which has facilitated and driven innovation across industries and sectors in China. An entire ecosystem has developed where companies are teaming up to create something unique for the customer which wouldn’t have been possible on their own. Perhaps this, more than anything else, is where the UK can quickly learn and adopt Chinese practices.
One of the key outcomes of the growth of the ecosystem model for Chinese consumers is that a small number of ‘superapps’ are becoming increasingly ubiquitous, ever present via smartphone screens and offering the solutions to many of the challenges of daily life. Alibaba, for example, continues its march towards becoming a one-stop shop for every digital need, adding an average 33 million users every month
in its most recent quarterly results, while other key players in the Chinese digital market include Baidu and TenCent.
This approach clearly has huge commercial appeal for big players in the UK, with an eye to the way Alibaba is hoovering up increasing amounts of consumers’ attention span and spending power, as well as for ambitious start-ups looking to emulate its success. Consumers, too, appreciate the convenience of having easy access to goods and services without having to shop around, and appreciate, perhaps without always understanding in detail the vast data infrastructure behind it, the benefits machine learning can bring to the way they buy and manage goods and services.
Clearly some of the developments we are seeing in the Chinese market are likely to find their way to the UK. The challenge for companies seeking to maximise the benefits of AI and machine learning – and their regulators – will be to focus on how to deliver customer-friendly integrated solutions which feel genuinely personalised, add value for the customer and don’t compromise privacy. The future will be bright for the companies which strike the right balance.