China has head start in fourth Industrial Revolution

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Originally published by Asia Times

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NEW YORK – 5G networks that run factories, warehouses, ports and urban transportation can increase productivity tenfold or more, industry experts believe.

Chinese industry leaders claim that thousands of 5G industry applications are now installed, mostly in the pilot stage, compared to hundreds in the rest of the world. The race towards the Fourth Industrial Revolution is still in early days, but China appears to have an impressive head start.

Telecom giant Huawei alone is building 5G applications for almost 2,000 Chinese manufacturing firms and 5,300 Chinese miners, according to a senior company executive. Enterprise solutions providers and industry consultants promise productivity gains of an order of magnitude and more with the application of Big Data/Artificial Intelligence technology to manufacturing, healthcare, logistics and even agriculture.

What its promoters call “Industry 4.0” promises to solve the great economic policy problem of the past three decades, namely stagnant productivity. Total factor productivity growth (see chart at bottom) has tapered out in all the major industrial economies. The IT revolution had minimal impact on productivity in other sectors. The country or countries that learn to transform other industries with AI and Big Data will dominate the 21st century.

Industry skeptics, though, point to several high hurdles before such gains can be realized, including high upfront investment costs, turf wars between telecom companies and technology solutions companies, fragmented technological standards and regulatory uncertainty.

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