What the U.S. Can Take From the China Internet Leap
The world’s two biggest economies are growing in their adoption of the Internet of Things, which adds value to the GDP. But since the IoT took off nine years ago, it has benefited China more than the U.S. The GDP gap between the two countries has shortened by 36 percent from 2007 to 2015.
American companies are typically at the frontline of technology innovation, while China is often criticized for being a copycat. The National Absorptive Capacity (NAC) score, published by Accenture, an international consulting firm, analyzed 20 leading countries for their abilities to innovate and to enable IoT for economic growth. The U.S. ranks at the top with 64 points, ahead of China at the 14th spot with 47 points. So how did China excel in the internet leap?
The U.S. has a more advanced technology presence, from application development and consumer electronics to operating systems and cloud computing. But how and to what extent companies and the public are using them determine how the internet could increase consumption and profits, which can further drive production and the industries that add value to the GDP.
WhatsApp, for example, launched in 2010 and now has more than 1 billion monthly active users across the world. But its function is still limited to personal messaging even after Facebook acquired the company two years ago in 2014. What if it could create another world where 1 billion users can purchase goods, book flights, reserve hotels and make hospital appointments?
One thing Chinese technology enterprises do better than those in other countries is localizing technology to enable a more connected world. WeChat was launched just one year after WhatsApp but is already creating a full ecosystem for its 700 million users, integrating every aspect of life into one platform and helping businesses monetize potential opportunities.
Kevin Wang, a Chinese citizen living in Beijing, said the convenience and all-rounded services, particularly WeChat Pay, make it “hard not to consume” through the platform. “You can pay the bill using WeChat with 20 percent discount at a restaurant and meanwhile order your favorite drinks from another vendor who hires couriers to deliver to your hands,” Wang said. Lower prices are constantly available on WeChat for different services, including in retail, hospitality and transportation.
In the U.S., Facebook Messenger is now trying to catch up, having announced the Bot for Messenger this year in April. The new technology opens up Facebook for developers and businesses to create more ways to interact with consumers, a concept similar to what WeChat has already done. The difference is that WeChat provides a set platform for people to integrate into, whereas Facebook Messenger is open for brands to build their own interactions with users. We have yet to see where that freedom will lead us to and whether it could enable another technology ecosystem to expand the U.S. economy. But it’s a good start.
