Big Data and the Digital Economy

Author: Mei Hong (Vice President of the Academy of Military Sciences, Academician of the Chinese Academy of Sciences)

In recent years, the rapid development of the digital economy, the wide range of radiation, and the unprecedented depth of its impact are becoming a key force in reorganizing global factor resources, reshaping the global economic structure, and changing the global competitive landscape. At the 34th collective study of the 19th Politburo of the CENTRAL Committee, General Secretary Xi Jinping made an important exposition on the great significance of developing the digital economy, the development trend and law of the digital economy, and the strategic measures to promote the healthy development of China's digital economy, which pointed out the direction of progress and injected a strong impetus into the development of China's digital economy.

First, big data opens a new stage of informatization and gives birth to the digital economy

The historical experience of the development of human society shows that every major change in economic form often gives birth to and depends on new factors of production. Just as labor and land are the main production factors in the era of agricultural economy, capital and technology are important production factors in the era of industrial economy, data is gradually becoming a new production factor driving economic and social development in the era of digital economy.

"Big data" as a concept and trend of thought originated from the field of computing, and then gradually extended to the field of science and business. In the past 10 years, big data-related technologies, products, applications and standards have developed rapidly, gradually forming a big data industry pattern covering data infrastructure, data analysis, data applications, data resources, open source platforms and tools, etc., and has undergone changes from basic technologies and infrastructure, analytical methods and technologies, industry applications, big data governance to data ecosystems.

Big data provides a new way of thinking and a new means for humans to understand complex systems. Theoretically, digitizing the real world on a sufficiently small time and spatial scale can construct a digital virtual image of the real world that carries the laws of operation of the real world. Given sufficient computing power and efficient data analysis methods, an in-depth analysis of this digital image will make it possible to understand and discover the operating behaviors, states, and laws of a real-world complex system. Big data provides human beings with a new way of thinking and a new means to explore objective laws and transform nature and society, which is also the most fundamental reason for its economic and social changes.

Big data is an inevitable product of the development of information technology. Informatization has experienced two waves of rapid development, the first is the digitization (informatization 1.0) with the large-scale popularization of personal computers in the 1980s with the large-scale popularization of personal computers. The second is the networking (Informatization 2.0) with networking applications as the main feature, which began in the mid-1990s and was promoted by the large-scale commercialization of the Internet. At present, we are entering the intelligent stage (informatization 3.0) with the deep mining of data and the fusion application as the main features. Under the background of the three-element integration of "man-machine-material", with the goal of "all things need to be interconnected and everything is programmable", digitalization, networking and intelligence have shown a new trend of integrated development. Another important manifestation of the opening of a new stage of informatization is the transformation of information technology from an auxiliary tool to a supporting social and economic development to a core engine leading social and economic development, which in turn gives birth to a new economic paradigm - "digital economy". After decades of accumulation and reserves, data resources have been gathered on a large scale, laying a solid foundation for the development of the digital economy.

Second, the connotation and extension of the digital economy

The term "digital economy" first appeared in the 1990s when the American scholar Don Tapscott published his 1996 book Digital Economy: Prospects and Risks in the Age of Cyber Intelligence, which described how the Internet would change the way the world's affairs worked and spark several new economic forms and activities. In 2002, the American scholar Beomsoo Kim defined the digital economy as a special economic form, the essence of which is "goods and services are traded in the form of informationization." It can be seen that the word was mainly used to describe the impact of the Internet on business behavior in the early days, in addition, the impact of information technology on the economy at that time was not yet subversive, but only an assistant tool to improve quality and efficiency, and the term digital economy also belonged to the object of attention and discussion of futurists.

With the continuous development and in-depth application of information technology, the degree of social and economic digitization has been continuously improved, especially the advent of the era of big data, and the connotation and extension of the term digital economy have undergone important changes. The current widely recognized definition of the digital economy originates from the G20 Digital Economy Development and Cooperation Initiative adopted at the G20 Hangzhou Summit in September 2016, that is, the digital economy refers to a series of economic activities that use digital knowledge and information as key production factors, modern information networks as important carriers, and the effective use of information and communication technologies as an important driving force for efficiency improvement and economic structural optimization.

The digital economy is usually divided into two aspects: digital industrialization and industrial digitalization. Digital industrialization refers to the development of the information technology industry, including digital-related industries such as electronic information manufacturing, software and information service industry, and information and communication industry; industrial digitalization refers to the digital transformation of traditional industries and all elements of the upstream and downstream of their industrial chains supported by a new generation of information technology, and through the deep integration with information technology, to achieve value assignment and empowerment. From the perspective of extension, economic development is inseparable from social development, the digitization of society is undoubtedly the soil of digital economic development, digital government, digital society, digital governance system construction constitutes the environment for digital economic development, at the same time, digital infrastructure construction and the digitization of traditional physical infrastructure lay the foundation for the development of digital economy.

The digital economy presents three important characteristics: First, it is led by informatization. Information technology penetrates deeply into various industries, promotes its digitization and accumulates a large number of data resources, and then realizes sharing and aggregation through network platforms, and makes the industry more intelligent by mining data, extracting knowledge and condensing wisdom. The second is open integration. Through the openness, sharing and flow of data, we will promote large-scale collaboration and cross-border integration between departments within the organization, between enterprises in the value chain, and even across different organizations across the value chain and industries, so as to achieve the optimization and reorganization of the value chain. The third is universal universalization. The ubiquitous information infrastructure, the cloud model of on-demand services, and various service platforms such as commerce and finance have lowered the threshold for participation in economic activities, making the digital economy appear inclusive pattern of "everyone participating, co-building and sharing".

Third, the current situation and trend of the development of the digital economy

Countries around the world attach great importance to the development of big data and digital economy, and have introduced relevant policies. The United States is the first country to lay out the digital economy, since 1998, the U.S. Department of Commerce has released the "Emerging Digital Economy" series of reports, and in recent years, it has successively released the U.S. Digital Economy Agenda, the U.S. Global Digital Economy Grand Strategy, etc., and will develop big data and digital economy as the key to achieving prosperity and maintaining competitiveness. In 2014, the European Union proposed a strategic plan for the data value chain to promote innovation around big data and cultivate a data ecosystem; subsequently launched the European Industrial Digitalization Strategy, the EU Artificial Intelligence Strategy and other plans, and in March 2021, the European Union issued the "2030 Digital Guide: European Path to the Digital Decade" outline document, covering the EU's vision, goals and ways to achieve digital transformation by 2030. Since 2013, Japan has formulated a comprehensive strategy for scientific and technological innovation every year, promoting scientific and technological innovation from the perspective of "intelligence, systematization and globalization". In 2017, Russia included the digital economy in the "Catalogue of The Main Strategic Development Directions of the Russian Federation for 2018-2025" and completed the Russian Federation Digital Economy Plan. In 2015, the Fifth Plenary Session of the Eighteenth Central Committee of the Communist Party of China elevated big data to a national strategy, and then issued more than 10 policies to promote the development of the digital economy industry, and since 2017, the digital economy has been written into the government work report for five consecutive years.

The global digital economy is growing rapidly. According to the China Academy of Information and Communications Technology, in 2020, the size of the digital economy in developed countries will reach 24.4 trillion US dollars, accounting for 74.7% of the global total. The digital economy of developed countries accounted for 54.3% of GDP, far exceeding the level of 27.6% of developing countries. From the perspective of growth rate, the digital economy of developing countries increased by 3.1% in nominal terms year-on-year, slightly higher than the growth rate of 3.0% of the digital economy in developed countries. In 2020, the added value of the digital economy in 47 countries around the world reached 32.6 trillion US dollars, an increase of 3.0% in nominal terms year-on-year, and industrial digitalization is still the main engine of the development of the digital economy, accounting for 84.4% of the digital economy. In terms of scale, the US digital economy continues to rank first in the world, with a scale of nearly $13.6 trillion in 2020. In terms of proportion, the digital economies of Germany, the United Kingdom and the United States occupy a dominant position in the national economy, accounting for more than 60% of GDP. From the perspective of growth rate, China's digital economy increased by 9.6% year-on-year, ranking first in the world.

It can be expected that the digital economy will maintain rapid growth for a long time in the future and show the following trends:

In terms of infrastructure, the new generation of information technology with the Internet as the core is gradually evolving into the infrastructure of human social and economic activities, and will complete the in-depth informatization transformation of the original physical infrastructure, thus greatly breaking through the temporal and spatial constraints of communication and collaboration, and promoting the rapid development of the new economic model.

In terms of industry and industry, digital transformation has become an inevitable choice, from the consumption and service field to the manufacturing field, each format around the main line of informatization in-depth collaboration, integration, to complete their own transformation, upgrade change, and constantly spawn new formats, but also make some traditional formats to die. In this process, various elements such as labor, land, capital, technology, management, and knowledge are digitized and digitized, which multiplies the efficiency of production efficiency and forms a new type of data productivity.

In terms of governance system, the development of the digital economy poses many challenges to the government regulatory system and the international governance system. The next 10 years will be a decade of profound reshaping of the global governance system. The G20 divides the Digital Governance Framework into two main components: one is to promote connectivity, and the other is to establish global governance systems and norms. In October 2021, the United Nations Conference on Trade and Development released the "Digital Economy Report 2021", saying that the current data-driven digital economy is showing great imbalances, calling for a new global data governance framework to meet the challenges of global data governance. The construction of a digital governance system is already on the agenda.

Fourth, the challenges facing the development of the digital economy

The digital economy has become the most dynamic, innovative and widely radiated economic form at present, but it also brings many challenges.

First, the lack of understanding of data elements has led to challenges in the cultivation of data elements market. As a new type of production factor, data elements can be understood from two perspectives: one is the ontological perspective, the data itself contains a lot of information, knowledge, laws and even wisdom, contains value; the second is the methodological perspective, data becomes the digital space "twin" of other production factors, so as to achieve assignment and empowerment. Data elements have unique characteristics such as non-competitiveness of acquisition, non-exclusivity of use, non-exhaustion of value, and non-scarcity of sources, which can improve efficiency through the dataization of other production factors. At present, data elementization is facing many challenges: the asset status of data has not yet been established, the problem of data rights confirmation has yet to be solved, there are many obstacles to data sharing and circulation, and the data security and privacy protection system is not yet perfect. The cultivation of the data element market is a comprehensive system project, which requires overall planning, strengthening innovation, and steady progress.

Second, the current international governance system is facing great challenges brought about by digital transformation. Digital governance is in the context of digital transformation, taking the digital world as the object, with the purpose of building an open and pluralistic new governance model, mechanism and rule that integrates information technology and multi-subject participation, covering the complex system engineering of the state, society, institutions, individuals, digital technology and data governance. Digital governance includes two meanings: one is digital governance, taking digital transformation as the background, taking effective strategies and measures to ensure the implementation effect and value of digital transformation; the other is the digitalization of governance, using information technology platforms, tools, etc. to implement digital transformation of the current governance system. At present, the construction of digital governance system is facing many challenges. For example, the supervision ability of The monopoly of Internet companies needs to be strengthened urgently, and the rapid development of digital platforms has gradually formed a market pattern of "one big family" and "winner takes all", which has brought about problems such as market monopoly, tax erosion, data security, etc., and it is difficult to follow the traditional anti-monopoly rules to supervise them; the ability to control emerging technologies needs to be urgently improved, all kinds of emerging digital technologies are developing rapidly, all kinds of threats are spreading from virtual cyberspace to the real physical world, and the economy and society are facing unprecedented risks and security challenges. Other ethical issues such as the runaway management of network public opinion, the disorderly expansion of financial digital business, and the application of big data and artificial intelligence technology have become important issues that must be faced and solved.

Third, as the core kinetic energy and infrastructure of the digital economy, the development of information technology faces many challenges. The underlying hardware of information technology has been developing under Thermo law and has attracted worldwide attention, but its basic theory and von Neumann architecture have not changed fundamentally. The linear increase in data processing power brought about by the progressive development model of computing systems has lagged far behind the exponential growth of data, and it can be predicted that the scissor difference between data processing needs and capabilities will continue to expand over time. According to statistics, due to insufficient computing power, the average retention rate of acquired data is only 2%, and a large amount of data is discarded without being processed and utilized. Looking back over the past 10 years, big data management and processing technology, big data analysis methods and big data governance technology have made great progress, but in essence, they are all adjusted and optimized through software technology on the existing general technology system, facing the needs of big data. This technological development model faces a series of major challenges, such as the data model is independent, the data is difficult to relate and share; the load type is different, the cold and hot data are different, it is difficult to optimize and dispatch different hardware resources; the computing-centric data processing mode often needs to perform massive data "moving" operations, resulting in performance bottlenecks. Driven by the demand for big data applications, it is necessary to reconstruct the computing technology system, the new data system technology centered on data has become an important direction, the information technology system will be transformed from "computing as the center" to "data as the center", and the new basic theory and core technology problems still need to be explored and solved.

V. Some Thoughts on the Development of China's Digital Economy

Since the implementation of the "National Big Data Strategy" in 2015, China's policies to promote the development of the digital economy and digital transformation have been deepened and implemented. The State Council issued an action plan for promoting the development of big data; the National Development and Reform Commission, the Ministry of Industry and Information Technology, and the Central Cyberspace Administration jointly approved 8 big data comprehensive pilot zones in Guizhou, Shanghai, Beijing-Tianjin-Hebei, and the Pearl River Delta; and provinces and cities actively promoted the development of the digital economy, and by the end of 2020, more than 60 action plans and industrial plans for the development of the digital economy have been issued. China's digital economy is developing rapidly, and new products, new formats and new models are emerging in an endless stream, becoming a new engine driving China's economic development. General Secretary Xi Jinping pointed out that "informatization has brought a once-in-a-lifetime opportunity for the Chinese nation"; "the development of digital economy is of great significance and is a strategic choice to seize the new opportunities of a new round of scientific and technological revolution and industrial transformation". We must firmly grasp the opportunities, actively respond to challenges, overcome obstacles to development, and promote the prosperity and development of the digital economy.

Accelerate the cultivation of data element market and activate the potential of data elements. China has officially implemented the Data Security Law and the Personal Information Protection Law, providing a bottom-line guarantee for the development of the digital economy. In order to accelerate the cultivation of the data element market, it is necessary to further study and promote the formulation and revision of relevant systems and regulations such as data confirmation, transaction circulation, and cross-border flow, and clarify the boundaries of the rights and responsibilities of the government, industry, organizations and other parties in the data element market. At the same time, we will strengthen theoretical research and technological research and development to provide effective technical support for data confirmation, interoperability, shared circulation, data security, and privacy protection. At present, breaking the information island and revitalizing the data stock is an urgent task, especially in the field of government data, logical interconnection should be carried out first, physical centralized follow-up, improve the management system and standard specifications such as data registration, classification and grading, and quality assurance, build a government data resource sharing and exchange system with physical dispersion, logical unification, credible control and consistency at a certain level, and clarify responsibilities and rights without changing the ownership and management pattern of existing information systems and data resources, so as to ensure the efficient sharing and utilization of data resources. Encourage the exploratory practice of data elementization in areas with conditions, encourage new business formats of data operation and processing, and promote the cultivation of data element markets in a market-oriented manner.

Promote digital transformation in all industries. General Secretary Xi Jinping pointed out that the digital economy has high innovation, strong penetration and wide coverage, which is not only a new economic growth point, but also a fulcrum for transforming and upgrading traditional industries, and can become an important engine for building a modern economic system. At present, information technology has shifted from the role of "tool and assistant" to the role of "leading and leading" to the role of "leading and leading" to penetrate deeply into various industries, causing a subversive impact on their production models, organizational methods and industrial forms. However, in the face of the requirements of digital transformation, some enterprises have the "three noes" phenomenon of "not wanting, not daring, and not". "Don't want" is limited to traditional concepts and path dependence, resistance to the application of new technologies; "dare not" is in the face of the possible pain period and risks of transformation, do not dare to take the lead in exploration, on the spot, hesitate and wandering; "will not" is the lack of methods, technologies and talents, as well as successful experience and paths. Transformation and development will inevitably face challenges in terms of concepts, systems, management, technology, talents, etc., of which the change in concept is the core and key, and the supply of talents is the fundamental guarantee. Digital transformation is not completed through the simple superposition of information technology and tools, it is necessary to deeply understand the connotation of "digital transformation, network reconstruction, intelligent improvement" and systematic planning; it is necessary to create a digital talent training system that meets the needs of digital transformation from multiple levels such as the state, universities and research institutes, enterprises, and society, and reserve qualified talents for the transformation and development of the next few decades.

Improve the digital governance system. General Secretary Xi Jinping pointed out that it is necessary to improve the digital economy governance system, improve laws, regulations and policy systems, improve institutional mechanisms, and improve the modernization level of China's digital economy governance system and governance capabilities. The traditional governance system, mechanism and rules are difficult to adapt to the changes brought about by digital development, and cannot effectively solve the problems of market monopoly, tax erosion, security and privacy, ethics and morality brought about by the rise of digital platforms, and it is necessary to build a digital governance system as soon as possible, and digital economic governance is undoubtedly one of its core contents. The construction of the digital governance system is a long-term iterative process, in which the construction of the data governance system must be carried out first. The construction of the data governance system involves three levels of the state, industry and organization, including the establishment of data asset status, management system and mechanism, sharing and openness, security and privacy protection, etc., and needs to provide support from the aspects of system regulations, standards and norms, application practices and supporting technologies. At present, the international digital governance system is still in the exploration period, with both global multilateral mechanisms and regional or bilateral mechanisms, as well as factual rules for private platform enterprises. Due to the different priorities and development degrees of digital governance in various countries, the future global digital governance system will present a pattern of diversified hierarchical and multi-mechanism coexistence oriented to different concerns.

Build a global partnership of "open innovation" and "mutual benefit". The essence of open innovation is from closed "mechanized thinking" to open "computing thinking", "Internet thinking" and "big data thinking", from "zero-sum game" to "win-win cooperation". Open source software, which has completely changed the global software industry landscape, is the earliest and most successful practice of open innovation in the field of technology. In the face of the new situation and new tasks in the field of digital economy, it is necessary to establish a mutually beneficial cooperation mode, actively promote international cooperation and plan the layout of transnational data sharing mechanisms and compliant cross-border data flow mechanisms, and share the dividends of the digital economy with other countries, so that China can get more development opportunities and more development space.

Carry out the research and development and application of core key technologies of big data. General Secretary Xi Jinping stressed that it is necessary to strengthen the key core technology research, hold the "bull nose" of independent innovation of digital key core technologies, and firmly grasp the autonomy of developing the digital economy in their own hands. At present, China is still facing the dilemma of big data core technology subject to people, high-end chips, operating systems, industrial design software, etc. are the shortcomings of China's "card neck", and it is necessary to unswervingly take the road of independent innovation and increase efforts to solve the problem of independent control. At the same time, in view of the new needs brought about by the era of intelligent interconnection of all things brought about by the three-way integration of "man-machine-material", we should grasp the cutting-edge development trend, develop leading technologies, and forge China's technical long board. Most of the core key technologies have the characteristics of high investment, long time consumption and great difficulty, and it is necessary to form a scientific management system and mechanism, act in accordance with the law of innovation and development, the law of scientific and technological management, and the law of talent growth, strengthen the overall planning of innovative resources, optimize the allocation of resources, and strive to make substantive breakthroughs to ensure the safe development of the digital economy.

Source: Qiushi 2022/02