The Chi­nese AI in­no­va­tion gap

Shanghai Daily - - OPINION - Michael R. Wade and Amanda Bris gaokao

LEAD­ING economies in the world un­der­stand the im­por­tance of ar­ti­fi­cial in­tel­li­gence (AI) in gen­er­at­ing eco­nomic growth. China is no ex­cep­tion. In July 2017, the Chi­nese State Coun­cil de­clared that AI was a top pri­or­ity.

In April 2018, SenseTime Group Ltd, backed by Alibaba, be­came the world’s most valu­able AI startup, hav­ing raised US$600 mil­lion.

By 2030, it is pre­dicted that AI will in­crease China’s GDP by 26.1 per­cent.

In ad­di­tion to mas­sive in­vest­ment, China has other dis­tinct char­ac­ter­is­tics that put it at an ad­van­tage in the devel­op­ment of AI. With more than 700 mil­lion In­ter­net users, China has a clear ad­van­tage in data vol­ume that can be used to train AI-learn­ing al­go­rithms. Its so­cial­ist mar­ket econ­omy gives the gov­ern­ment eco­nomic lever­age to ex­pand its AI ini­tia­tives across many in­dus­tries.

Ad­di­tion­ally, Chi­nese busi­ness could en­joy rel­a­tively easy ac­cess to con­sumer data, a key to AI devel­op­ment.

De­spite heavy in­vest­ment and easy ac­cess to data, how­ever, we be­lieve China will strug­gle to re­al­ize its AI am­bi­tions. The main ob­sta­cle for AI devel­op­ment in China is not lack of fund­ing, but lack of in­no­va­tive ta­lent.

China is not short on raw tech­ni­cal ta­lent — quite the op­po­site. The num­ber of STEM (science, tech­nol­ogy, en­gi­neer­ing, and math­e­mat­ics) grad­u­ates has been par­tic­u­larly ex­plo­sive as part of the gov­ern­ment’s push to de­velop a tech­ni­cal work­force. In 2013, 40 per­cent of Chi­nese grad­u­ates fin­ished a de­gree in STEM, more than twice the US av­er­age.

Nev­er­the­less, we be­lieve that AI ad­vance­ments will plateau as China strug­gles with its lack of in­no­va­tive ta­lent. This lim­it­ing fac­tor can­not be eas­ily over­come by gov­ern­ment leg­is­la­tion, as it must be fos­tered through a cul­ture of en­trepreneur­ship.

In re­cent years, China has been im­port­ing its AI ta­lent from over­seas. Ac­cord­ing to LinkedIn’s Global AI Ta­lent re­port pub­lished in July 2017, 44 per­cent of the over­seas AI ta­lent work­ing in China comes from the US, fol­lowed by the UK and France as the sec­ond and third source coun­tries. The num­ber of Chi­nese AI job post­ings on LinkedIn surged from about 50,000 in 2014 to 440,000 in 2016, ac­cord­ing to Wang Di, vice pres­i­dent of LinkedIn China. China ranked 40th and 31st out of 63 coun­tries in the IMD World Ta­lent Re­port and Dig­i­tal Com­pet­i­tive­ness Re­port, re­spec­tively.

Foster cre­ativ­ity

Jack Ma, founder of the Alibaba Group, sug­gests that the Chi­nese ed­u­ca­tion sys­tem does not give stu­dents enough time to have fun, ex­plore and ex­per­i­ment. It is of­ten in these mo­ments that great ideas are born. Chi­nese stu­dents, es­pe­cially at univer­sity level, are so con­sumed by aca­demics that they rarely get an op­por­tu­nity to ex­per­i­ment with out­side­the-class­room learn­ing and growth.

A study con­ducted by re­searchers from Kyung­pook Na­tional Univer­sity in South Korea to an­a­lyze cre­ativ­ity in Chi­nese and Korean uni­ver­si­ties con­cluded that Chi­nese stu­dents at top-ranked in­sti­tu­tions were less cre­ative than those at less pres­ti­gious in­sti­tu­tions.

Once they en­ter the work­force, these grad­u­ates strug­gle to step out of their dis­ci­plined and rigidly struc­tured en­vi­ron­ment. As a con­se­quence, they tend to pro­duce su­per­fi­cial, me­chan­i­cal in­no­va­tions that re­quire lit­tle imag­i­na­tion.

Some stu­dents who en­ter top Chi­nese uni­ver­si­ties, through China’s highly com­pet­i­tive (col­lege en­trance ex­am­i­na­tion), have their cre­ativ­ity some­what muted by a mech­a­nism that tends to re­ward rote mem­o­riza­tion over orig­i­nal think­ing.

While China pro­duces twice as many col­lege grad­u­ates as the United States, it still has a long way to go in cul­ti­vat­ing en­tre­pre­neur­ial and cre­ative spirit in these highly ed­u­cated work­ers.

But fre­quent tiny and in­cre­men­tal changes can add up to large in­no­va­tions over time. Ten­cent’s WeChat started out as a di­rect copy of What­sApp, but through thou­sands of rounds of it­er­a­tive im­prove­ment, it has be­come some­thing much more im­pres­sive.

How­ever, AI is un­char­tered ter­ri­tory, and in­no­va­tions tend to be less lin­ear than for apps, games, and mar­ket­places. It re­mains to be seen if Chi­nese dig­i­tal gi­ants can use fast, in­cre­men­tal ap­proaches to com­pen­sate for a lack of AI in­no­va­tion.

China has the po­ten­tial to be­come the pre­em­i­nent global leader in AI in­no­va­tion. Money and other re­sources are avail­able and its peo­ple have bound­less in­tel­lec­tual ca­pac­ity. At the mo­ment, how­ever, the cul­tural cli­mate with re­spect to in­no­va­tion needs to be more en­cour­ag­ing.

By fos­ter­ing cre­ativ­ity from an early age, and re­duc­ing struc­tural bar­ri­ers, China’s model for AI devel­op­ment would be­come more sus­tain­able.

Michael Wade is di­rec­tor of the Global Cen­ter for Dig­i­tal Busi­ness Trans­for­ma­tion at IMD. Amanda Bris is a com­puter science stu­dent at Bos­ton Col­lege and chief in­for­ma­tion of­fi­cer at Canor, and was an in­tern at the IMD Global Cen­ter for Dig­i­tal Busi­ness Trans­for­ma­tion. Copy­right: IMD. Shang­hai Daily con­densed the ar­ti­cle for space.

Graphic by IC

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