August 2, 2022
Global management consulting firm McKinsey artificial intelligence team QuantumBlack released a research report on the 21st titled "Exploring the New Frontier of Artificial Intelligence: China's Economy Welcomes Another $600 Billion Opportunity". By 2030, artificial intelligence is expected to be in China's transportation and other key industries. Leveraging huge economic value in the industry, it is estimated that a series of artificial intelligence use cases can create economic value of more than 600 billion US dollars per year.
Today, AI penetration is high in China's financial, retail and high-tech industries, which together account for more than a third of the national AI market. McKinsey believes that in the next 10 years, artificial intelligence will bring huge growth opportunities for some key industries in China, especially in innovation and R&D spending such as automotive, transportation and logistics, manufacturing, health care and life sciences, enterprise software, etc. have been lagging behind. in the industry of global counterparts.
China is the world's largest auto market, with more than the United States in terms of ownership. Such a large scale provides a fertile ground for the development of artificial intelligence. The McKinsey report pointed out that artificial intelligence has the greatest potential impact on the automotive industry, which is expected to create more than $380 billion in economic value, mainly from the following three areas: self-driving or driverless cars (about $335 billion), providing car owners with Personalized experiences (~$30 billion) and fleet asset management (~$15 billion).
In manufacturing, China is transforming from a low-cost toy and clothing manufacturing hub to a leader in precision manufacturing of processors, chips, engines and other high-end components. Artificial intelligence can help facilitate the transformation of manufacturing from production execution to manufacturing innovation, creating $115 billion in economic value. Among them, the vast majority of the value created (about $100 billion) will come from process design innovation, which needs to be realized through rich artificial intelligence applications. The rest of the value creation (about $15 billion) is likely to come from product development facilitated by AI.
Like other countries and regions, Chinese companies have embarked on digital and artificial intelligence transformations, driving a new local enterprise software industry to flourish, providing support for building the necessary technological foundation. The solutions provided by these companies could create an additional $80 billion in economic value, of which cloud services and AI tools are expected to contribute more than half of the value creation (equivalent to $45 billion); AI-driven SaaS (software that is services) is expected to contribute $35 billion in economic value.
In recent years, China has stepped up investment in AI innovations in healthcare and life sciences. AI-enabled R&D can add more than $25 billion in economic value in accelerating drug discovery, optimizing clinical trials, and supporting clinical decision-making.
Alex Sawaya, a global senior managing partner at McKinsey & Company, pointed out: “These new economic value creations come from either the revenue generated by AI-enabled products or services, or from cost savings from improved efficiency and productivity. Across industries, AI use cases have the potential to be a 'battleground' for businesses as it will spawn future industry leaders."
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