In 2022, the concept of Industry 4.0 was introduced, marking the tenth anniversary of the launch of the first industrial internet platform (Predix). Over the past decade, with the promotion of policies and the development of emerging technologies, the industrial sector has experienced a new wave of technological upgrades, equipment replacement, and even business model transformations. This has also ushered in a new era for the market of corporate services like automation and informatization.
In recent years, under the continuous catalysis of the policy environment, the industrial internet sector has embarked on a market-driven path. Market mechanisms centered around demand and supply, competition and cooperation, and industrial chain and division of labor are accelerating the operation of enterprises, technology, products, and capital. In 2023 and even the coming years, the following three major trends will have a profound impact.
The market mechanism has been established.
In recent years, with strong promotion from the Ministry of Industry and Information Technology, the industrial internet has not only vertically advanced the industrial and information technology systems of various provinces and cities but has also received substantial support from ministries such as the National Development and Reform Commission, the Ministry of Science and Technology, and the Ministry of Emergency Management, creating a significant policy synergy. With the joint efforts of all levels of departments, the digital awareness of numerous enterprises has been enhanced, several advanced models have been selected, and hundreds of digital service providers have been attracted. However, from the revenue of several types of service providers a few years ago, the policy announcements were loud, but the market orders were small.
This situation improved in 2022, with emerging platform service providers carving out a presence in niche markets such as automation and informatization. Taking the Flexible Production Line project as an example, at the bidding site, we can see not only fierce competition among automation manufacturers but also various industrial internet platforms. Although new vendors have yet to establish their own advantages, the frequent "head-to-head" competition between new and established players indicates that after years of policy-driven cultivation, the market mechanism has quietly taken shape.
The demonstration effect is pronounced.
In 2022, large clients with orders in the tens of millions to even hundreds of millions have become a key target for many platform service providers, particularly central state-owned enterprises and corporate groups with ample budgets and a greater emphasis on solution integration capabilities. From the perspective of customer needs, beacon factories and group-level industrial internet platforms are emerging as the gold standard of leading platforms, attracting sustained attention from major clients and igniting the ambitions of corporate decision-makers and enterprises.
III. Social Impact Elimination
In 2023, as social impacts dissipate, China's economy is poised to rapidly return to normalcy, with the recovery in consumption and exports driving revenue growth for small and medium-sized enterprises (SMEs). The economic recovery will fuel a resurgence in digitalization demands among SMEs, particularly for over 40,000 "specialized, refined, new," "mini-giants," and manufacturing sector "single champions." These businesses will be a focal point for service providers. Naturally, SMEs' sensitivity to product functionality and cost-effectiveness will also test the product capabilities of service providers.
