China will become the global leader on the internet of the future

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Added On December 4, 2017

by Luigi Gambardella

In Europe, we are used to joke about why women so much appreciate French and Italian men and why Germans produce the best cars in the world. This may sound like stereotypes, but there is a truth behind it.  Latin lovers are curious about their partner and her interests. They want to make her feel special and seek to anticipate their wishes: make a remark that tunes in into her thoughts, invite her to a restaurant she will like, give her a present that she was silently dreaming about. In fact, Latin lovers spend a lot of time talking and listening so as to understand and predict their partner’s wishes.  And nothing is more seducing for a women, than a man who can anticipate her wishes. Northern Europeans spend that time at work or designing new products. Their view is that economic success will allow them to afford all commodities that women could dream of.

This reflects the dilemma of mankind:  invest time in affective relations or in productive activities?

But the internet will soon allow to overcome the dilemma. The dilemma will be the common threat of the gathering this weekend of the most influential key decision makers and high tech company leaders in Wuzhen for the World Internet Conference.

Open sharing goes together with digital economic development.  Open sharing generates consumer data, which on its turn, allows better focusing products and services.  This is what is known as the revolution brought about by big data and artificial intelligence. And China is now in the lead for two reasons.

The first is a huge market of more than a billion consumers. The essence of ‘big data’ is to use data from an as vast as possible population to find correlations and predict future behavior. The size of the Chinese market contributed decisively to the success of Ctrip and Alibaba. These companies collected a massive amount of data about consumer choices. In a second stage, their algorithms deduced from these data, predictions allowing to make targeted proposals to clients, which on its turn, increased sales.

A second reason is the tremendous development of IT processing power. Predictive algorithms are still in their infancy but can be improved and refined by computers on the basis of whether or not the predictions derived from these algorithms materialized. The world’s fastest computers are China’s Sunway TaihuLight at China’s National Supercomputing Center and the Tianhe-2 at the National Supercomputer Center in Guangzhou.

At the same time, China can still learn from Europe. Today two paradigms for the development of the internet are competing: the Chinese model, government led, and the US model, Wall Street led. The problem that I see with the US model is that Wall Street has no interest for the rural areas. The ‘digital divide’ is a hot issue also in Europe. President’s Xi Jiping’s October speech for the 19th Party Congress reflected concerns in China, very similar to these in Europe. Avoiding a digital divide at the expense of the rural areas is a priority issue. Like in other areas, China and the EU share very similar concerns.

More than many European countries, China is confronted with massive migration from rural areas to the Beijing-Tianjin-Hebei area.  In the digital age, it should no longer matter so much whether you live in the capital town or rural areas. But what we see is massive network investment in the densely populated areas and less or no investment in the poorer, rural areas.  Given its geographic size, the problem is even more acute in China than in European countries. But solutions are similar. I think for example that a government led single 5G and fiber network deployment in the rural areas, open for all Chinese telecom operators, would be a best practice of China that would be copied globally.

The global advantage of China is in equipment and services relating to high capacity digital communications. However, opportunities for China will only be maximized if globally fiber to the home networks are deployed, which will also serve as the basis for 5G networks. There is a ‘chicken or egg’ paradox. If Chinese industry wants to reap the full benefit of its technological leadership, a pre-condition is the global deployment of pervasive fiber to the home networks. Chinese companies should therefore cooperate and create joint-initiatives with European fiber to the home companies, to help the latter in increasing their footprint. Once deployed, fiber networks will be the superfast internet infrastructure on which Chinese artificial intelligence will thrive.

As an Italian, I should likely fear that outcome. Once the Chinese developed artificial intelligence will allow any man in the world to learn and anticipate the wishes of his partner, we latins will lose our current unique advantage.