Expert Roundtable: The Road to Acceleration of the Industrial Internet

What is the current status of industrial Internet development in my country? What challenges will enterprises encounter when applying the Industrial Internet? How should third-party industrial Internet platforms "dance" with enterprises? With these questions in mind, CEConline interviewed Professor Wu Qingsheng from Shanghai Jiaotong University Antai School of Economics and Management and Engineer Yin Yangpeng from the Institute of Informatization and Industrialization Integration of China Academy of Information and Communications Technology. They share relevant insights as experts.

Definition and Industry Status

CEConline: How to define industrial Internet applications and how to distinguish them from other concepts? How does the Industrial Internet promote economic development?

Yin Yangpeng: By definition, the Industrial Internet is the product of the deep integration of a new generation of information technology and industrial economy. The comprehensive connection of the value chain promotes the formation of a new manufacturing and service system, provides new infrastructure support for the digital transformation of various industries, and promotes the real economy to become bigger and stronger.

Industrial Internet is the second half of the Internet. The name "industry" is mainly to consider its current industry as the main application scenario, but it is not only the application of the Internet in the industrial field, but also the manufacturing industry. Starting from the starting point, it will continue to penetrate into other areas of the real economy such as energy and transportation, and support the integrated development of primary, secondary and tertiary industries.

The Industrial Internet mainly promotes economic development through the following means: First, it provides infrastructure support for the development of the industry. The second is to integrate industry resources, promote industrial synergy, extend the industrial value chain, and promote new kinetic energy. The third is to generate new business formats, driving the expansion of sharing economy, platform economy, big data analysis, and supply chain finance.

CEConline: The Internet of Things, big data, artificial intelligence, cloud/edge computing, and 5G technology form a complete system, just like a set of formations in martial arts novels, without any one missing. item, its power will be greatly reduced. So what role do you think the Industrial Internet plays in this system?

Yin Yangpeng: These all belong to the new generation of information and communication technology. These technologies are combined to empower each other, and are connected in series through the Industrial Internet to form an all-round, multi-angle, and deep-level action system. The Industrial Internet plays the roles of bearer, connector, and integrator, and is the key infrastructure and core empowerment for building such a system. The development of the Industrial Internet is the development consensus of countries around the world under the new wave of industrial revolution and technological revolution, covering all major subjects of government, industry, academia, and research. As the main body of "use", the practice of enterprises represents the final implementation of the development of the Industrial Internet, which directly reflects the application level and effectiveness of the current Industrial Internet.

CEConline: What related industries are mainly included in the Industrial Internet? What is the current overall development of these industries in my country?

Yin Yangpeng: On the one hand, the industrial Internet promotes the reconstruction, fission and upgrading of traditional industries, and gradually forms industrial digital equipment, industrial interconnection automation, industrial Internet network industry, industrial Internet security industry, and industrial software and APP industry and other five supporting industries; on the other hand, emphasizing the intelligence of the whole process, the industrial cloud platform industry and the industrial Internet-related service industry for equipment data collection, storage, analysis and processing, etc. have been derived. Therefore, the Industrial Internet mainly covers the above seven categories of related industries.

In recent years, my country's industrial Internet has developed rapidly, forming an industrial Internet industry system with comprehensive coverage and complete layout. First, supply-side enterprises such as UFIDA and Kingdee have formed supply capabilities covering the entire industrial Internet industry. Enterprises such as Loongson, Shenwei, Dujiangyan, and Taiji have also formed independent technological breakthroughs in the upstream areas of the industrial chain such as chips and operating systems.

In addition, my country's domestic enterprise resource planning system (ERP) and manufacturing execution system (MES) already have certain market competitiveness in some domestic traditional industries, and the backbone enterprises of domestic industrial automation and industrial software are also Actively deploy the emerging fields of Industrial Internet.

In the two emerging fields of edge computing and industrial Internet platform, my country has basically kept pace with the advanced level of foreign countries.

Application and Practice

CEConline: What is the current situation and characteristics of enterprises in the field of Industrial Internet?

Wu Qingsheng: Generally speaking, China's industrial Internet has had a good start, but it is still in the initial stage of development, and the achievements cannot be overestimated. The current application is mainly in the interconnection of devices, and there is still a long way to go to truly dig deeper.

Secondly, we clearly feel that there is a large gap in enthusiasm and development level between different enterprises and industries. For example, due to global competition, the automotive industry will have higher requirements for manufacturing, so the application, power and actual development level of the Industrial Internet will be higher. The more traditional manufacturing enterprises are less motivated to invest in this aspect.

Yin Yangpeng: On the one hand, my country's industrial Internet application has achieved initial success, and the digital transformation of the real economy has entered a period of accelerated development. First, the current industrial Internet is widely promoting the transformation and upgrading of all walks of life, and is accelerating the formation of a good trend of coordinated development of the primary, secondary and tertiary industries.

Second, typical large enterprises form a complete production system and management process application, so that small and medium-sized enterprises can use their platforms to complement the shortcomings of digital capabilities and form a collaborative innovation, resource sharing, and integrated development of large and medium-sized enterprises. new situation.

The third is to accelerate the emergence of innovative development models. my country has also taken the lead in exploring and practicing innovative business models that combine industrial Internet with finance and supply chains.

On the other hand, the phenomenon of uneven development also exists objectively.

First, different regions have different digital foundations and different results. A domestic research institution pointed out that the digitization rate of production equipment in Liaoning, Jiangxi, Guangxi and other provinces and cities is less than 40%, while Jiangsu, Tianjin and other provinces and cities have exceeded 50%.

Second, the level of digital transformation in different industries in my country is significantly different. Data shows that the numerical control rate of key processes in the steel and petrochemical industries exceeds 70%, while the consumer goods, textile and other industries are all less than 50%.

Third, due to the lack of resources such as funds and talents, the actual exploration ability of small and medium-sized enterprises is very limited, and the indicators such as the digitization rate of production equipment and the numerical control rate of key processes are significantly different from those of large enterprises. According to data provided by IDC, nearly 42.2% of small and medium-sized enterprises choose to "stick to the rules" in digital transformation, and they are not very proactive.

CEConline: Is there a certain threshold for enterprises to take advantage of industrial Internet technology? What challenges do businesses need to overcome?

Wu Qingsheng: The threshold is the automation and informatization of enterprises. Because the most basic requirement of the Industrial Internet is that the device can output data and report status. Without this premise, let alone accepting instructions, monitoring, and controlling the operation of equipment, this is a very important threshold from the perspective of equipment hardware. We found that there are still some enterprises that use non-automated and intelligent equipment, and have not crossed this threshold.

Furthermore, many of our companies' understanding and cognition of the Industrial Internet is actually very vague. For the Industrial Internet and for intelligence, in fact, only one term is known, or it is probably based on one's own understanding and imagination.

There are two ways to cross the threshold. One is the continuous publicity of government departments and media, so that our enterprises, especially the senior managers of enterprises, can gradually deepen their understanding and keep up with the pace of the times. Another is to modify the equipment. In fact, some local governments are already helping companies overcome this challenge. When I went to Wenzhou for research, the local government had relatively ample finances, so they provided financial support to enterprises and encouraged them to try, get in touch, and carry out small-scale renovations. These supports reduce the cost of trying new things for businesses.

Yin Yangpeng: On the whole, I think the current enterprises are mainly faced with the following types of challenges:

First, the understanding and awareness of the Industrial Internet need to be improved. Traditional enterprises do not have enough understanding of the Industrial Internet and the economic benefits brought by them, so they lack the motivation for transformation. Some enterprises blindly carry out the practical promotion of cutting-edge technologies, ignoring the application conditions and supporting requirements, and cannot achieve the expected results. These are all manifestations of ignorance.

The second is to solve the current basic problems of various applications. It is mainly manifested in a series of problems such as the difficulty of renovating many old equipment, the difficulty of interoperating data between major systems, the difficulty of data mining due to the complex production environment, and the lack of mastery of industrial models and mechanisms. This requires enterprises to establish relatively unified interfaces, protocols, and standards to realize comprehensive data collection and transmission applications.

The third is to find the application mode and path that conforms to the actual situation of the enterprise. The experience of other enterprises cannot be directly copied, but enterprises should gradually explore their own path based on the actual situation.

Fourth, it is necessary to ensure the input of resources such as capital and talents. According to data from the Ministry of Industry and Information Technology, the average profit of manufacturing enterprises in my country is only 2.59%. The problem of small and medium-sized enterprises is particularly serious, and it is difficult for enterprises to provide sufficient funds. In addition, the lack of compound talents who understand both industrialization and informatization is also a major threshold restricting enterprise applications.

World managers: Chinese enterprises vary in the degree of automation, informatization, digitization and intelligence, and some enterprises are in the stage of supplementary courses. Is now the time to apply the Industrial Internet?

Wu Qingsheng: I think this is a very good opportunity for China's manufacturing industry. In many industries, such as the field of fuel vehicle manufacturing, companies in Europe, America and Japan have accumulated rich experience in this area (such as the processing and production of mechanical parts, integration and debugging). If they follow the path of traditional technology, they must surpass the western developed countries. It is indeed more difficult.

But after the emergence of the Industrial Internet, it has brought a new development idea. Just like the current Internet of Vehicles, many of them do not rely on the technology of fuel vehicles themselves, but rely on other equipment on the vehicle to bring revolutionary changes to products, which gives Chinese companies an opportunity to surpass.

There is also the issue of the late-mover advantage. Since traditional manufacturing powers such as Europe and the United States have accumulated a lot of advantages in the technology of Industry 2.0 and Industry 3.0, it is relatively expensive to give up the original advantages. But for many Chinese companies, developing on the basis of the Industrial Internet has the advantage of being a latecomer. It could also be an opportunity to overtake on a corner that has been around for years.

Industrial Internet Platform

CEConline: What are the main functions of the Industrial Internet Platform? What changes will it bring to the existing business model?

Yin Yangpeng: The Industrial Internet consists of three parts: network, platform and security, of which the platform is the core. The industrial Internet platform is the hub of all elements of the industry, connecting equipment down and applications up. Through massive data aggregation, modeling analysis and application development, it promotes the standardization, software, modularization and serviceization of manufacturing capabilities and industrial knowledge, supporting Industrial production mode, business model innovation and resource efficient allocation.

At present, the application of the industrial Internet platform is changing from single-point informatization to cross-domain intelligence, gradually forming three levels of functions.

One is the information application based on IoT and cloudification. Including production monitoring, operation management and other software cloud applications.

The second is the deep optimization application based on big data analysis. The "model + deep data analysis" mode is widely used in equipment operation and maintenance, quality control and other scenarios.

The third is resource allocation and model innovation application based on collaborative ability. Integrate industrial chain resources with the help of the Industrial Internet, and explore innovative applications such as manufacturing capacity transactions, supply chain collaboration, and integration of industry and finance.

From the perspective of business model, the industrial Internet platform mainly brings the following types of changes to enterprises:

First, it promotes the transaction mode from industrial product transaction to manufacturing capability, industrial knowledge and other transactions .

The second is to promote the service model from product operation service to content value-added service.

The third is to promote the profit model from traditional sales to platform-based models such as function subscription and app store sharing.

CEConline: Most of the platform providers used to solve the problem of device interconnection, but now they put more emphasis on the ability to use artificial intelligence for data operations. Why does this change happen? What do you think this change represents?

Wu Qingsheng: I think this is a very welcome change.

In the past few years, at least a group of enterprises have solved the problem of equipment interconnection under the domestic propaganda, promotion and government guidance. Because the most straightforward understanding of artificial intelligence is to use data to drive, and to generate certain intelligence through data learning. There is such a change, indicating that we have at least a large group of such enterprises that have the foundation of industrial big data, and it is possible to further utilize and mine them.

In fact, the most important value of the Industrial Internet is not in the interconnection of devices. With the interconnection of devices, the use of artificial intelligence for data processing will be emphasized on this basis to better solve two types of problems: reducing costs and improving quality; making products more competitive in the market. This is the more advanced application stage.

So what does this change mean? First, the start of our country's industrial Internet is not the earliest. In general, it is actually a little later than major developed countries such as the United States and Germany. Now that we can reach this stage, I think it is a manifestation of the considerable development speed of our country's industrial Internet.

Second, I think China's manufacturing industry as a whole may undergo a qualitative leap. If a group of such companies, especially representative leading companies, can realize the Industrial Internet as a whole, Chinese manufacturing companies can better determine their own competitive advantages in the global competition, and reduce competition with Western developed countries. A country's manufacturing level or intergenerational differences will have significant demonstration significance. This could lead to a qualitative leap in our nation's businesses.

CEConline: Manufacturers may have an illusion when choosing a platform provider, as if they choose everyone. How should different platform providers reflect their differences to customers?

Wu Qingsheng: From the point of view of manufacturing companies, they will see things in a fog because they do not fully understand. From the perspective of the Internet platform itself, I think that in such a large market in China, the platform itself should not overemphasize its versatility.

In general, industrial Internet platforms are divided into three categories:

One is from a manufacturer. Such as Haier's Kaos, Sany Heavy Industry, Xugong Information, Aerospace Cloud Network, these are more typical. Such platforms usually have a relatively in-depth understanding of their own industries, and indeed have good adaptability to companies with similar manufacturing scenarios. However, the versatility of this kind of platform is not very good, and not all enterprises can adapt to it well. For example, the platform of equipment manufacturer cannot do logistics.

The second type of platform is derived from industrial software (especially ERP). This is like UFIDA, from financial software and ERP software, without a specific manufacturing background. It actually draws on the service experience of many clients from different industries. Their understanding of manufacturing is not as good as that of a platform from manufacturing, but the versatility will be better. But the problem is that it doesn't really work for anyone.

The third type of Internet company was born. This type of platform can be said to have no industrial background at all. Although they have experience in supply chain management, it is still very different from the supply chain of manufacturing. The advantage of this type of platform is that it has a full understanding of consumer big data and can help them identify.

Therefore, industrial Internet platforms should avoid overly generalized things, and the key is to build professional capabilities. The more in-depth understanding of an industry, the closer the integration with the enterprise, the higher the synergy between the two parties, and the more value it can create for the enterprise.