China and the "Aerial Industrial Revolution"

2019/08/19

In his article "An Outline of a Theory of Civilization" (April 2019 issue) published in this magazine, Jun Murai introduced an illustration from the beginning of Yukichi Fukuzawa's "Things Western (Seiyō Jijō)." It can be interpreted as "Steam assists people, and electricity transmits information (Shin)," depicting a courier striding across the four seas on a globe to connect humanity. This could be linked to the idea of "The Internet connects people."

An extension of this imagination is the theory of the "Fourth Industrial Revolution," which views the current series of technological innovations—such as artificial intelligence, IoT, robotics, and nanotechnology—as changing the world.

The arrival of a society where everything is connected to a network is called the "Age of IoT (Internet of Things)." The number of mobile phone subscriptions per 100 people worldwide exceeded 100 in 2016. By the end of 2018, more than half of the world's population of 7.6 billion had internet access. The development of the internet and devices prepared in the 2000s covered the world in the 2010s in the form of the rise of the digital economy.

What about in the sky? Aircraft equipped with multiple propellers, commonly called drones, have become capable of flight due to lighter batteries and enhanced motor functions. In the world of the internet, a "democratization of computing" occurred, moving from machines that occupied entire floors called mainframes to the era of personal computers and then to smartphones. In the sky, options have expanded from $200 million commercial airliners and $5 million helicopters to $700 consumer drones.

What can be achieved by utilizing the sky, specifically low-altitude airspace? This is the puzzle posed by drones. Around the world, including Japan, applications are gradually expanding from aerial photography to infrastructure inspection, pesticide spraying, amusement, and logistics. However, if terrorist groups equip drones with plastic explosives, they also become tools for unmanned aerial bombardment. The "democratization of aerial photography" exists side-by-side with the "democratization of aerial bombardment."

Chinese companies have become the main players in the development and production of drones as aircraft. DJI (Da-Jiang Innovations), which has become the world's largest consumer drone manufacturer, is currently said to have a 70% market share. Founded in 2006, it has now become a representative of new-generation companies in Shenzhen, a high-tech city in southern China. For those in the drone industry, it has the image of being DJI's city, but more broadly speaking, the headquarters of Huawei, a major telecommunications equipment terminal company, and Tencent, which operates WeChat with over one billion users, are located in this city. The supply chain for smartphone manufacturing merged with an overwhelmingly young demographic and an ecosystem for launching and nurturing startup companies.

Attending a drone exhibition held in Shenzhen, one is surprised by the number of manufacturers other than DJI. Particularly in industrial applications (for fire departments, police, and oil and gas facility inspections), which DJI did not initially set as its main market, leading companies are emerging based on the large domestic Chinese market. Chinese e-commerce giants have begun developing automated logistics systems that incorporate drones.

The social implementation of technology cannot be realized through terminals alone. Currently, Chinese society has become a massive IoT testing ground. In cases like drones, where it is necessary to create new value while ensuring flight safety, social implementation will not progress through increased regulation alone.

I cannot forget a scene I witnessed while staying at Shenzhen University in Nanshan District, the center of Shenzhen, for overseas research. There was a large lawn on campus, and drones frequently flew there on weekends. The students would glance at the flying drones but pass by as usual. This is because it is a daily occurrence for them. When I accompanied a team doing aerial photography at the University of Tokyo's Hongo Campus, a crowd gathered. When witnessing a new phenomenon, it can be said to have spread when it moves beyond the stage of surprise and into the stage of being recognized as part of daily life. If we stop being surprised when seeing SoftBank's Pepper in the city, that is progress.

In his recent book, "Purely Mechanized Economy: Brain Capitalism and the Decline of Japan" (Nikkei Publishing), economist Tomohiro Inoue examines a world where artificial intelligence becomes a prerequisite for society, deeply juxtaposing optimism and pessimism. Among these, what caught my interest was that Mr. Inoue perceives China as the one boldly supporting artificial intelligence technology through policy and reaping the fruits of the next industrial revolution. I thought he stated this quite boldly.

It is a fact that Chinese companies and society are boldly and fully utilizing what the mobile internet has made technically possible. Behind this, in addition to the role of the government and its policies, there is an ecosystem where startup companies propose unknown services.

The future where technological progress connects the four seas has been achieved. However, challenges are piling up in that connected future. In the context of US-China friction, technological hegemony and fragmentation are discussed. The phrases to be written as an extension of steam, electricity, and the internet have yet to be decided.