The digital economy has the power to bring “fundamental change” to how economies and businesses operate, according to Daniel Zhang Yong, chief executive of ecommerce giant Alibaba Group Holding.
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“Generally speaking, China’s infrastructure was not ready […] so when the digital economy came along, there was an opportunity to rebuild the infrastructure based on the most advanced technology and apply this infrastructure in all business areas,” Zhang said on Tuesday at a two-day conference hosted by the Luohan Academy in Hangzhou.
Alibaba’s ecommerce platforms not only connect buyers and sellers, but also touch upon various parties in the value chain that include production, distribution, and sales, in which new job opportunities are created, he added.
“There are many people behind a web store and that’s the segregation of responsibilities. That’s how the economy developed in the past 2,000 years and it also applies in the new digital world. The segregation of responsibility has created new roles,” Zhang said, citing livestreamers who promote and sell products during live broadcasts.
He stressed the need to include all participants in the rule-making process. “At Alibaba, I always tell my team that we are not the owner of the platform. We operate the platform but we are one party, one participant in the platform […]. Together with our buyers, sellers, and service providers, we form this ecosystem.”
The inclusion of digital have-nots and smaller players as key participants in the process were some of the major topics discussed at the conference, which brought together a variety of experts to discuss the future of the digital economy. The academy asked the scholars to ponder 10 key issues when it came to the future of the digital economy, including inclusive growth opportunities, job loss and creation, international economic cooperation, and ethics.
More than 200 scholars and entrepreneurs from around the world arrived in Hangzhou for the event, which was held at the headquarters of internet giant Alibaba, which founded the Luohan Academy last year. New York-listed Alibaba is the parent company of the South China Morning Post.
The event comes at a time when China is trying to shift its development model to one driven by the digital economy and AI technologies as part of wider efforts to secure the country’s future in what has been called the new industrial revolution. The digital economy, worth 27.2 trillion yuan (US$3.9 trillion) in 2017, contributed to 55% of growth of China’s gross domestic product, according to official figures.
However, as the digital technology advances in China and globally, the prospect of entirely new industries and jobs being created is counterbalanced by concerns over potential job losses from AI and robotics.
The Luohan Academy was founded to address universal challenges facing societies due to the rapid development of digital technologies.
“We proved in China, Rwanda, Cambodia, and the Philippines that all the small guys really love and benefit from [the digital economy], so we [need] detailed research on how and why it can help,” Jack Ma, founder and executive chairman of Alibaba, told a group of economists and academics in a closed-door meeting ahead of the event.
China’s process of digital transformation can be used to inspire and benefit other parts of the world, economists believe.
“What I was really struck by is the suppliers of the weaker services. Sometimes they start with a little help with new technology and some financing to get it installed, and they get the job done. The potential [in China] on a global basis, especially in a full range of developing countries […] [is worth] digging into,” said Michael Spence, New York University professor and a Nobel Prize Laureate in Economics.
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