What are the challenges?

CTI-2501 The first is the uncertainty caused by industrial digitalization. While digitization enables the transformation and upgrading of traditional industries, it also brings more uncertainties. First, the uncertainty brought about by industrial digitalization itself. Industrial digital transformation is undergoing from the information management of enterprise resource information systems such as traditional ERP and CRM to the value system reconstruction based on emerging digital technologies such as cloud computing, big data and the Internet of Things. However, the complexity and influencing factors of the systems built by digital transformation are increasing compared to traditional industries, so the advancement of digitalization also brings uncertainty. Second, there is great uncertainty in the results of digitalization. In the process of industrial digital transformation, high costs and high risks will bring greater pressure to enterprises, and will largely affect the final transformation results. Even if the transformation is successful, it remains to be seen whether digital applications can improve enterprise performance, which also increases the uncertainty of digitalization. Third, industrial digitalization brings uncertainty to regulation. Digitalization is generally characterized by the integration of various fields, and the existing government governance system is mainly oriented to specific regions and specific fields in terms of function setting. Therefore, the development of industrial digitalization has brought certain challenges to the supervision of government functional departments, and has put forward higher requirements for the follow-up and update of regulatory means of government departments.

CTI-2501 The second is the imbalance caused by industrial digitalization. With the development of digital technology, the problem of industrial digitalization imbalance has become increasingly prominent. First, the formation of a specific digital divide. Under the background of digital economy, participants need to master sufficient information resources and advanced digital technology to survive and develop. However, the progress of the construction of the new generation of digital infrastructure and the richness of data resources vary greatly, mainly concentrated in the native digital enterprises with sufficient capital and technical foundation. The traditional economic organization is restricted by many factors, and it is difficult to obtain the corresponding resources, which forms the obstacle of development. Second, some leading enterprises exist monopoly phenomenon. In the process of industrial digital transformation, Metcalfe’s law phenomenon exists in the digital economy, that is, the value of the network increases at the rate of the square of the number of users. Therefore, under the role of network externalities, digital transformation is easy to form a “winner-takes-all” situation, and the market structure tends to be monopolistic. Third, the degree of digitization varies greatly among enterprises. According to IDC statistics, there are still more than 55% of enterprises in China have not completed the digital transformation of basic equipment, and there is a large gap in the level of digital development among enterprises, and more than 50% of the digitalization of manufacturing enterprises is still in the stage of single point test and local promotion, it is difficult to produce synergies.

CTI-2501

CTI-2501 The third is the technical barriers faced by industrial digitalization. The technical barriers in the process of industrial digitization hinder the process of digitization. First, the technology is unaffordable. In general, the technology of smes is difficult to meet the requirements of digitalization, and they often rely on third-party digital platforms to integrate their own resources. However, the external data platform is difficult to meet the individual needs of enterprises, and there are many restrictions in use, and the use of high costs, which increases the technical barriers of enterprises virtually. The second is the lack of digital awareness. Many enterprises still remain in the application stage of traditional information technology such as ERP and CRM, while the development and iteration of emerging technologies are fast, and traditional manufacturing enterprises have certain difficulties in understanding, applying and mastering these technologies. Third, the lack of digital talent. An important problem faced by smes in the process of digital transformation is the lack of suitable digital talents. The lack of professional and technical personnel has also led to the obstruction of enterprises in the transformation process and increased the technical barriers faced by enterprises.

CTI-2501 Finally, there is the employment impact of industrial digitization. Industrial digitalization has a great impact on the original employment form. First, the digital economy affects traditional employment methods. The continuous development of digital economy has a great impact on the traditional economic operation mode, such as the impact of the rise of online shopping on the traditional retail industry. Compared with traditional economic practitioners, emerging digital enterprises can quickly occupy the market because of their obvious advantages in technology and capital, affect the interests of practitioners in traditional industries, and impact the employment of traditional industries. Second, the development of the digital economy has reduced the demand for low-skilled personnel. The digital economy has increased the demand for high-tech talents, increased the employment of high-tech talents, and increased the skill premium, but the employment number of low-skilled talents has decreased significantly, and the wage income of labor factors has continued to decline, widening the income gap between high-tech talents and low-skilled talents. Third, the development of the digital economy makes more and more capital substitute for labor. The uneven distribution of wealth between capital and labor exacerbates the wealth inequality of people with different assets. Although AI increases labor productivity and improves output efficiency, the substitution effect of technology will reduce labor’s share of economic value added, thereby reducing the demand for workers and increasing inequality among workers. Fourth, the digital economy will intensify the “Matthew effect” of talent. China’s economic development is unbalanced, the development between urban and rural areas and between regions is unbalanced, there are differences in digital infrastructure between regions, and the education level of talents is significantly different. Such differences will make high-quality talents continue to gather in regions with a high degree of digitalization, and aggravate the imbalance in industrial digitalization in different regions.