Summary Report of Roundtable on Internet Economy

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1 2014/SOM2/043 Agenda Item: 4.3 Summary Report of Roundtable on Internet Economy Purpose: Information Submitted by: China Second Senior Officials Meeting Qingdao, China May 2014

2 Regulatory Roundtable (Proposed by China, for Information) The Regulatory Roundtable was held in the morning of 23 rd April, 2014 and was chaired by Ms. Duo Liu, Vice President of China Academy of Telecommunication Research of MIIT, People s Republic of China. The theme of the roundtable was Promote the Internet Economy through ICTs. The Regulatory Roundtable invited nine experts from research institutions, government, regulatory bodies and industries from the following economies, China, USA, and Singapore. Opening Ms. Sulyna, the TEL chair, gave an opening address, emphasized the important role of internet economy. Mr. Hishida, the LSG convener, also delivered a speech and hoped that the roundtable will be constructive and successful. Session 1 The first session theme was internet economy foundation and ecosystem. The first speaker, Mr. Gao Xinmin, Vice Chairman Internet Society of China, under the title of Fundamental factors driving internet economy expansion, outlined the following themes: On the definition, he said, Internet economy = e-commerce+ Part of ICT Industry related to Internet. He described evolution and expansion of internet economy as three stages, from e- Commerce, to supply chain e-business, and then to internet-based industry. On fundamental factors driving progress, he mentioned three aspects, which are extremely rapidly diffusion Internet across the society and intensive deployment of high speed broadband, emerging strategic technology such as IOT, M2M, APPs, Big Data, Cloud, Cyber Physical Space (CPS), and the impact of traditional ecommerce on other industry. He depicted development trends of e-commerce by Interaction and combination online platform with off line business(o2o Model) and from B2B/B2C/C2C forward to C2B2c. He selected a case study of Trace Parts to compare traditional e-commerce with ecosystem for supply chain e-business. Finally, on policy measures, he referred to support new companies or smart-ups and to create technological clusters The second speaker, Mr. Scott Smith, from United States of America, under the title of Internet Economy Ecosystem, outlined the following themes: On the concept of ecosystem, he mentioned natural ecosystems, and then suggested venture market ecosystems and the internet economy ecosystem behave in some ways like an ecosystem and it may be a useful model for thinking about them. An ecosystem is a community of living organisms and non-living components, interacting as a system, but unlike mechanical systems ecosystems can be thought of as having traits like health and maturity. In contrast to architectural or mechanical systems, which are planned, built and maintained, outcomes in an ecosystem tend to be spontaneous, and it is more appropriate to think about promoting the health and diversity of the system and allowing successful outcomes to emerge on their own. Citing Silicon Valley as an example, he argued a successful start-up ecosystem depends on the complex interaction of many factors. The complexity of the interactions and uncertainty about future outcome which are critical to allowing new innovation make it nearly impossible to manage. Attempting to manage will typically reduce complexity and uncertainty, from which new ideas emerge. The connected, global Internet Economy is unprecedented in its size, complexity, and rate of change. It is producing more new ideas, new behaviors, and new business models, more rapidly than ever before, and many of these are qualitatively different from those we are familiar with in the traditional economy. Mr. Smith also outlined the 14 ideas described in the OECD Internet Policy-making Principles - an attempt to describe in a balanced way the range of features function together that

3 support the Internet Economy - and suggested this might be a useful framing document for thinking about possible APEC actions. Mr. Smith then described several examples in which developments on the Internet economy were unanticipated: based on new models, greater than might have been expected based on previous experience, and exhibiting different traits or behaviors. One example involved a range of new technologies and industries that grew out of the public release of satellite and geographic data. These included new understanding of meteorological and geological sciences including climate change and improved forecasting, development of new navigator and mapping industries, better ability to map and visualize data geographically, and improvements to infrastructure operation and management such as displays of real-time traffic information, Building further on this, people's ability to post information and to interact with maps allow additional value as individuals contribute content to a richer information environment, from posting pictures, to reporting potholes needing repair, or rating service providers such as restaurants. He even noted popular use of platforms like OpenStreetMap that allowed volunteer crisis mappers to dramatically improve the map of Haiti and aid disaster response teams following the 2010 Haiti earthquake. He also talked about the power of mass collaboration, using examples like Wikipedia, and the ability of gamers solving puzzles in a game called Fold-it to achieve a medical breakthrough in only 10 days that researchers estimated might take them 10 years. He noted that rapid reiteration, for example with online games, allows the trial, improvement, and reiteration of new business models extremely quickly as lessons are being learned and tested constantly. The result has been generational, evolutionary changes to the industry in the span of a few short years. He argued that the Internet Economy is pushing assumed bounds of e-commerce and challenging business in areas not usually associated with the Internet. Platforms such as Angie's List are changing how we find and choose service providers such as doctors or plumbers and, in turn, improving market information and quality of service. He closed by noting the profound economic and social benefits from the Internet Economy, including: more economic opportunity, economic inclusion, and access to information and education online, which can disproportionately benefit those who have faced limited opportunities such as women, minorities, or micro-enterprises. There will, of course, be issues and problems to address, and there are emerging new ideas we do not yet understand. We will need to better understand phenomena like convergence, abundance, empowerment, and permission less innovation. Session 2 The second session theme was innovative development of internet economy. The first speaker, Mr. Wang Junwei, Chinese Academy of Sciences, on the topic of Development Trend of Internet of Vehicles, declared that: Internet of Vehicles (IoV) is a successful application utilizing integration of communications and automotive technologies. This leads to maximize road-safety and transportation efficiency. It supports the key APEC goal of free and open trade through the safe transportation of goods and people. The second speaker, Ms. Ms. Huang Linli, Baidu Inc. under the title of The New Business and New Model of Internet Company, shared the following cases and ideas: Firstly, she talked about new era of mobile internet and thought that it is the right time to discuss something new, and that mobile make it economically and operationally possible. On new business and new model, she declared that everything becomes a service. She selected several cases to explain the idea that search as service, such as search disease, search movie, new way to search, search by picture and Online to offline service. Session 3 The third session theme was the integrative development of internet economy with industry and service sectors.

4 The first speaker, Ms. Qi Xiaoxia, Vice Mayor of Yangzhou Municipal People s Government, under the title of The Role of Local Government in Serving and Guiding Information Consumption ---- Yangzhou s Practice, shared the practice of Yangzhou government in promoting internet economy by serving and guiding the ICT industry. On developing China Voice Valley, she emphasized three key concepts, which are platform mentality, user orientation and big data awareness. The Yangzhou government is making new efforts in facilitating the use, circulation and access of terminal development of information resources, for example, to accelerate the in-depth development and utilization of information resources, to expedite the infrastructure construction of information network, to speed up the popularization of information consumption terminals. The second speaker, Mr. Wang Miao, from Haier, under the title of Smart Home with Internet Economy, shared the following cases and ideas: Firstly, he emphasized the impact of internet economy on Haier s product, strategy, marketing and organization. He introduced two features of smart home, that to say, Merge of Industry and Always on Time. He also introduced Haier Smart Home from such three elements as service based ecosystem, platform, and smart device. The third speaker, Mr. Zhang Lingxiao, from Alibaba, under the title of The Integrative Development of Internet Economy With Services Sector, outlined the following themes: Firstly, he retrospected briefly the development path of the retail industry. The network transaction is only the supplement of the traditional retailing in USA, but is becoming the mainstream of retail in China. China has become the world's largest online retail market. E-commerce trade has driven the vigorous development of E-commerce services. He took Taobao for example, behind every transaction, many service enterprises are based on division and cooperation of the Internet. Finally, he showed some concrete cases, including Logistics early-warning radar based on big data, Alipay, Yu Ebao, and Internet Finance for the Micro Enterprises. Session 4 The fourth session theme was the internet economy and inclusive development. The first speaker, Ms. Zhang Xiao, from MIIT of the People's Republic of China, under the title of Digital Leap-frogging and ICT-driven Transformation in China: Retrospect and Prospect, outlined the following themes: On development retrospect, there are three stages of China's internet development. China faces rapid growth of internet and mobile Communications. Internet applications has achieved great development. On achievements, she mentioned that Internet improved efficiency of government, internet Companies realized the Leap-frogging development, internet strengthened overall competitiveness. On ecosystem and innovation of ICT industry in China, Sheshew a simplest model of ICT ecosystem, and then explained ICT ecosystems and innovation diffusion, innovation clusters, market map of ICT industry in China, and transformation of China s ICT industry. On accelerating the process of China s modernization, she emphasized that ICT drives industrialization, agricultural modernization, urbanization and government capacity building. On prospect, she believed in that ICT industry will lead the Economy in the future, new technologies will lead to a new round of ICT innovations and revolutions, Internet economy will be deeply involved with traditional economy. On Measures to Promote Internet Economy, she referred to promote the ICT Industries, deploy the ICT as a general-purpose technology across sectors, investment in ICT as an enabling and networking infrastructure, build a favorable policy environment, evaluate the Internet economy, bridge the digital divide, and good use of Data.

5 The second speaker, Mr. Jason Teo, from Singapore, gave a presentation entitled Boosting SME productivity and growth through Information Technology, and he broadly covered the followings: Top 2 Challenges faced by SMEs are rising business costs and manpower crunch. 98% of SMEs have reaped benefits from their ICT investments within 2 years of implementation. He shared on some success stories supported by IDA, for example, a food manufacturer that adopted ERP system, and more pre-schools are adopting school management system. He also introduced how IDA helps SMEs improve their business operations through isprint Grant Scheme and ICT for Productivity & Growth program.

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