Shanghai takes aim to become global capital for digitization

City to use data for intelligent manufacturing and high-end services

Shanghai, on track to become a global capital for digitization by 2035, has reported breakthroughs in digital transformation and companies are keen to unlock more potential by giving full play to the new trend.

A blueprint released by the Shanghai government in January 2021 said Shanghai's digital transformation will post remarkable achievements by 2025 and a basic framework to be a global capital for digitization will soon be built. By 2035, the city will become a digital capital with global influence.

The region in East China released a white paper in August called Shanghai: The Global Digital Metropolis 2035, which discusses the significance, aims, fields and action principles of the city's digital transformation.

According to the report, Shanghai will use data, a new production factor, to further advance intelligent manufacturing and high-end services.

Shanghai has accelerated the digital transformation of its traditional industries for more than a year and sped up innovation in multiple application scenarios such as social governance, public services, production and livelihoods.

The Shanghai Data Exchange was established at the end of 2021 in Pudong New Area to promote the circulation of data elements, the development of the digital economy, and further release digital dividends.

So far, more than 70 enterprises are trading digital assets on this platform. The exchange has also partnered with many time-honored brands in Shanghai to boost awareness of those brands among younger generations.

At the end of October, the Shanghai government released an action plan to further support the digitalization progress among manufacturing businesses.

The plan said all manufacturers above designated size in Shanghai, normally with annual industrial output value of more than 20 million yuan ($2.76 million), will have digitalized their diagnosis systems.

Production of more than 80 percent of manufacturers above designated size has to be digitalized. The overall industrial output value of core businesses within the industrial internet industry will reach 200 billion yuan.

There will be 10 demonstration industrial parks, 200 demonstration smart factories, 30 industrial internet platforms, 40 enterprises which hold core positions in the industrial chain and can support upstream and downstream business development, and 50 application scenarios which could serve the wider needs of companies in Shanghai by 2025.

By then, the city will be a highland for the integration of new generation information technology and the production industry.

Long-run strategy

Zhang Xun, managing director of Accenture Strategy and Consulting in Greater China, said digitalization is an important strategy for Shanghai to forge ahead as a world-class city. He also noted that the digitalization should not be regarded merely as an upgrade of internet technology.

"Digitalization is a necessary lever for Shanghai to diversify its economic stimulation and fulfill local residents' need for better services," Zhang said.

Shanghai is among a few cities in China that depend more on imports than on exports. Its imports value was almost 1.6 times the amount of exports in 2021.

"As China marches toward a new era of high-quality development, it is necessary for Shanghai, as a leading city both economically and socially nationwide, to leverage digitalization as a robust enabler to continue advancing its economy," he said.

Zhang said that based on Accenture's research, Shanghai has its own advantages for advancing digitalization.

The city abounds in industrial resources due to its location. Shanghai is the center of the Yangtze River Delta region and boasts a port that has been rated as the world's largest container port for 12 consecutive years.

"Its information infrastructure is laying a solid foundation for digital transformation of diverse sectors. Statistics showed Shanghai had built more than 60,000 outdoor 5G base stations and 210,000 such stations indoors by the end of July," he added.

A report on the digital economy of Chinese cities released at the China Urban Digital Economy Forum in December 2021 said Shanghai was the city that has the best-established digital infrastructure.

The city attracts globally excellent professionals, including those from the digital industry, and high-tech companies, Zhang said, adding that it helps boost Shanghai's digitalization.

Despite Shanghai's superiority in promoting digitalization, there is room for improvement. Zhang said he thinks the city should integrate innovation in different fields, such as telemedicine, intelligent transportation and smart garbage classification.

The digitalization needs to be advanced by diverse industries, instead of merely by several companies, he said.

Digital technologies should be utilized to promote the real economy in Shanghai.

Zhang said he suggests Shanghai double down on the industrial internet and sustainable development under the digitalization environment.

The accumulation of sectors is an important feature of Shanghai, Zhang said, adding that the city may consider how to integrate related services into the industrial internet and firmly advance it.

Low carbon is not merely a pursuit of things such as low emissions, but using digital technologies to improve abilities in sustainable development, he said.

Embracing opportunities

In recent years, companies in Shanghai have been increasing their commitment and investment in digitalization for long-term development.

"We see growing opportunities from Shanghai's development. Blueprints and policies developed in Shanghai strengthen Rockwell's confidence in Shanghai, which enable us to better communicate with local partners and empower each other toward a digitalized future," said Ian Shih, president of Rockwell Automation China.

Shih said Rockwell Automation will strengthen development in fields such as new energy vehicles, life science, nonferrous metals and fine chemicals to support China's digital transformation.

It will accelerate the construction of ecosystems for industries such as high-end buildings and data processing centers to support China's industrial upgrade and quality development.

At the fifth China International Import Expo, Rockwell Automation has introduced the Rockii Alliance, a nonprofit organization in collaboration with partners, with the aim to create a smart manufacturing ecosystem to empower digital transformation in China.

The alliance includes more than 100 members such as the Shanghai Intelligent Manufacturing Industry Association, Lingang Group, Accenture, Cushman & Wakefield and Mercer.

"Via the Rockii Alliance, we will join hands with more upstream and downstream businesses to help our partners to accelerate innovation and facilitate China's manufacturing industry toward a brighter future," said Shih.

Shipping business operators in Shanghai are also embracing digitalization to boost operational efficiency and service quality.

"At MSC, we strongly believe that digitalization is the way forward, enabling not only greater operational efficiencies, reliability, transparency, speed, security and sustainability, but also greater collaboration and customer experience," said Andre Simha, global chief digital and information officer of MSC Mediterranean Shipping Company.

MSC has introduced MSC electronic Bill of Lading, also known as MSC eBL.

"This user-friendly solution is offered via an independent blockchain platform called Wave BL, ensuring that all the parties involved in a cargo shipment booking can issue, transfer, endorse and manage the bill of lading in a few clicks and within minutes through a decentralized network," said Simha.

Besides the MSC eBL, Simha said the company has also been investing in developing an e-Business platform, named myMSC, to add new features and tools to provide enhanced visibility and ease of doing business online for its customers.

MSC has also been an early investor and leading advocate for the smart containerization of the industry.

According to Simha, equipped with an internet-connected device, smart containers can generate a wide range of data. By leveraging digital innovation, customers can get more visibility over what's happening to their cargo, they can receive an alert if a container door opens unexpectedly, or if there are variations in temperature and humidity within the container, or sudden shocks and vibrations to it.

These measures can be critical for shippers of sensitive and perishable cargo, Simha said.

Simha anticipates there will be more important documents to be digitalized in the upcoming years. Cargo traceability from warehouse to destination is another key area.

In the shipping industry, reliability of shipping and port operation is crucial. So MSC has close collaboration with ports to facilitate more digital technology, in order to increase logistics efficiency in a more sustainable way, Simha said.