David Daokui Li: The Future of China's Economic Upgrading Lies in the Quaternary Industry
Originally published in Chinese by CNR News on September 8, 2021. Translated by ACCEPT. For the original Chinese article, click here.
On the morning of September 8, David Daokui Li, Director of the Academic Center for Chinese Economic Practice and Thinking (ACCEPT) at Tsinghua University, said in his speech at the 2021 Lenovo Innovation and Technology Conference that a new industry is emerging in the world, which he calls the quaternary industry—the information service industry. The future of China’s economic upgrading will be closely tied with the worldwide economy and China’s efforts in the quaternary industry. Professor Li predicts that the quaternary industry, or information services, will account for about 10% of major economies while also upgrading the primary, secondary, and tertiary industries.
According to Professor Li, the primary industry (agriculture) satisfies humans’ most basic need for energy to live. The secondary industry—in a nutshell, industry, but strictly speaking, industry + construction—satisfies basic human material needs, such as the production of cars, trains, and other means of travel. The tertiary industry is the personalization of these material aspects to be directly provided to individuals. In his view, the fourth industry addresses human needs for information, including information processing and the enhancement of wisdom, i.e., the information service industry.
Professor Li also interpreted new IT from an economic perspective. He pointed out that the concept of new IT is a major trend. In the future, it will attract widespread attention throughout the entire information industry and the operations of every multinational company, and will provide good guiding ideas for relevant industries.
On the development of China’s quaternary industry, Professor Li said, “I firmly believe that China will produce a large number of new leading enterprises in the quaternary industry within the next ten years. These companies are likely to be those that are already currently experienced in multinational production and hardware production. Lenovo combines hardware and software together, and this path from hardware to information services is a proper and promising path, which can serve as a model of representative significance to the whole world.”
Professor Li argues that China has three huge advantages in developing its quaternary industry.
First, China’s industrial base is very good. Development of the quaternary industry cannot be achieved without hardware infrastructure. In short, if you want to provide information services but can't produce PCs, sensors, and other kinds of equipment for people to operate, this is an unrealistic aspiration.
The second advantage is that China has a rich Internet platform, which has cultivated a large base of people eager for information services. The development of the travel, food, and shopping industries has cultivated over one billion consumers. There is no other place in the world with such a concentrated base of consumers who enjoy information services. This has laid a very good foundation for the development of the quaternary industry.
Third, China is home to many young engineers. Every year, more than one million young Chinese engineers graduate with programming skills and an understanding of information technology. This is a huge advantage, which can further be translated into a business advantage.
Professor Li stressed that China's development is inextricably linked with the world’s development. "In terms of the development of the quaternary industry, I firmly believe that a group of internationalized companies from China will work closely with companies and consumers in other parts of the world to lead the Chinese economy forward. In the process, the Chinese economy will transform and upgrade, and the global economy will also benefit,” he said.
