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  • Major Countries Push “Digital Innovation”as National Agenda
    2020-08-31 hit 2020

                Major Countries Push “Digital Innovation”as National Agenda

    -  The age of coexistance with coronavirus, it is a weapon to strengthen the economic constitution beyond the economic recovery  -

    -  Green project and boosting domestic demand through domestic-oriented supply chains are also new buzzwords  -

     

    Major countries leading the world economy, such as the United States, the European Union (EU), and China, are not only focusing on supporting the low-income class through large-scale fiscal inputs and economic recovery in the era of COVID-19 (WITH COVID-19) but also accellerating digital transformation at the national level. In addition, in order to create new demand and sustain the development of the domestic economy, various incentives are introduced into the green industry, and the countries are making every effort to establish a domestic-centered supply chain with a view to securing stable procurement of parts and materials as well as creating jobs through fostering domestic markets. 

     

    According to a report titled “The Age of Coexistance with Coronavirus, Major Countries' National Agenda and Econimic Innovation Strategy” issued by the Institute for International Trade (President: Choi Young-min) of the Korea International Trade Association on August 31st, as COVID-19 affects not only the short-term business environment but also the mid-to long-term industrial competitiveness, the United States, the EU, and China are encouraging △acceleration of digitalization, △green deal (green growth), △restructuring of the supply chain to revitalize the domestic market, etc.

     

    The United States is actively pursuing deregulation of the manufacturing industry in order to support its agenda to “revive the manufacturing industry”. The prominent examples are the Trump administration's recent two executive orders to deregulate the smokestack industry including automobiles, and environmental sector. In particular, the country is invigorating the manufacturing industry by sticking to the “2-for-1” order (to revoke two regulations for every new rule). Moreover, in order to preempt the digitalization of the industry, the United States is concentrating its national power on maintaining the technological gap with China, focusing on semiconductor technology. Ahead of the presidential election, Democratic candidate Biden also made a pledge to invest a large federal budget (700 billion dollars over four years) to improve manufacturing competitiveness, strengthen requirements for U.S.-based goods, expand the use of U.S. steel for infrastructure projects, and produce research and development (R&D) products funded by the government in the United States. Therefore, the project to boost the manufacturing sector will continue regardless of the election results.


     

    China, which experienced the coronavirus crisis first, set the acceleration of industrial innovation armed with digital and green deal as its core agenda in order to enhance industrial competitiveness. Through the combination of “digital” and “smart” in all industries, the country is promoting the transition from a “productive powerhouse” to an “innovative powerhouse”. As part of the plan, China is stepping up efforts to bring the industrial convergence of advanced technologies and digital upgrade of the manufacturing and service industries. Furthermore, the country is actively engaged in the construction of a new infrastructure, focusing on 7 areas such as 5G mobile communication, artificial intelligence (AI), and industrial Internet. Green growth is also gaining momentum. In addition to green consumption through promotion of digital content consumption, green production (low carbon production) and green distribution (realization of smart delivery) are also being highlighted. In order to become self-sufficient in next-generation technologies including AI, 5G, and big data, as the sequel to Made in China 2025, the China Standards 2035, which lays out technologies for the next decade, will be announced within this year.

     

    The EU is putting its strong commitment to economic recovery into action through digital and green deals. In order to boost the digital transformation of companies in the region, a digital strategies based on AI and data were presented in February. Afterwards, the countries are working on European data strategy, which focuses on a single data market composition, and an innovative policyies to emsure reliability of AI technology. In terms of green deal, in order to achieve carbon neutrality and digital transformation at the same time, the climate law is being proposed, and tariffs are being introduced for offshore companies with large amounts of carbon emissions. The EU plans to raise at least 1 trillion euros over the next 10 years to support the green deal project and foster 250,000 digital experts. In July, the EU announced an investment expansion plan to create 140,000 jobs by scaling up the hydrogen economy from 2 billion euros this year to 140 billion euros in 2030. The economic bloc also suggests new industry strategies such as strengthening support for the European Battery Union and supporting the carbon-zero steel manufacturing process.

     

    India has recently adopted the slogan “independent India” to secure an engine for economic growth. The purpose is to strengthen industrial competitiveness by introducing digital services and nurturing IT startups, and the basic frame is to lead domestic production of imported products through higher import tariffs and domestic production incentives. By easing regulations on foreign investment, the proportion of foreign indirect investment in corporate bonds has been expanded from 9 percent to 15 percent, and in the case of the consignment industry, 100 percent foreign investment is allowed without prior approval. Japan is also focusing on policies such as introduction of digital administration, smartization of local cities, and remote work and education using ICT technology under the slogan of “new daily life”.

     

    Park So-young, a researcher at the Institute for International Trade of KITA, said, Digitalization is not a new emerging concept. It was previously adopted as a future strategy in the process of preparing for the 4th industrial revolution and has been widely applied at a faster rate in the age of coexistance with coronavirus,” and added The future competitiveness of a country as well as a company will depend on how efficiently R&D in basic and applied areas is promoted and how well it is applied to the corporate field.


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