In August, the Chinese government announced its AI plans for the country's major financial and commercial hub. The move, it said back then, would attract leading AI firms to the city, boost profits for Shanghai-based companies, and improve the population's quality of life.
The announcement came as more and more companies in China are taking their first steps towards the digital transformation of their businesses, with a particular focus on intelligent manufacturing – all in line with the governments Made in China 2025 initiative. Recent estimates by China's State Council suggest that the value of the country’s AI industries will exceed 150 billion yuan (US$22.15 billion) by 2020 and 400 billion yuan by 2025.
But Qi Wu, vice chairman of consulting company Accenture Greater China, thinks that simply concentrating AI-related science and technology in one place will not necessarily have the anticipated results. "On one side, if the government is pushing AI resources and capabilities to Shanghai, that likely will have the opportunity to develop Shanghai into a hub of innovation, and AI is part of that," Wu told PE. "That's a traditional approach that has been applied for many years by the Chinese government - pulling the capabilities and people to one place, and to have a scale effect.
"But on the other side, the true benefits will come from applying AI to the business processes, to services, and to companies, to citizens, to the government. But to apply it to these processes to create value, that will be a very challenging job."
More than a third of China's AI professionals already work in Shanghai, according to Shanghai Daily. The city itself is arguably a great testing ground for big data-related work; it runs several major databases with more than 300 million pieces of information on Shanghai’s 25 million-plus citizens and 1.8 million local companies.
Under the artificial intelligence project, the state wants to build a number of AI-focused industrial zones in the Xuhui and Pudong districts of Shanghai. In Xuhui, the idea is to create an 'Intelligence Valley' covering a million square meters along the Huangpu River. Speaking at the 2017 Global (Shanghai) Artificial Intelligence Innovation Summit, the city’s vice mayor Zhou Bo said smaller industrial parks would focus on robots, autonomous cars, big data and cloud computing and are set to be built in Jing’an, Yangpu, Jiading and Baoshan.
The move will help Shanghai to "become more competitive," Zhe Yao, a consultant at Dassault Systemes China, based in Shanghai, told PE. "I think it's not surprising that Shanghai is committing to AI as the city is trying to be at the forefront of new technologies."
The project has already taken off: a recently completed 200-meter-high skyscraper on Longyao Road, the AI Tower, will be a global AI development and exhibition centre. And work is underway on a 1-million-square-meter AI town in the Beiyang area, where companies will work on technologies such as driverless cars and facial recognition.
But Wu said that it won't be easy to get companies, especially those working in more traditional industries, to apply AI - and to start gaining benefits from AI, in a way home-grown technology like giants Baidu, Ali Baba and Tencent already do. "You may have an AI centre and bring some people there, but the challenge is what industry centres could they apply that to, that will allow them to further develop AI from the technological as well as from the business perspective," added Wu.
* Content published by Professional Engineering does not necessarily represent the views of the Institution of Mechanical Engineers.