Xu Xiaonian: High technology is innovation is just a superstition

Enterprise innovation, technology itself is not an end, but a means to improve efficiency, efficiency is ultimately reflected in financial indicators, and the ultimate financial indicator is profit. If Industry 4.0 can't increase profits, what should it do? Innovation does not necessarily require high technology, and traditional industries can still innovate and still improve efficiency.
One problem that many companies are concerned about at the same time is the innovation. Innovation is not only the Chinese economy, but also the most critical part of the current economic downturn. But the understanding of innovation is different. Some people say that innovation is waiting for death, innovation is looking for death; some people say that innovation requires high technology, and we don't understand how high technology is innovative? There is a variety of understanding and understanding of innovation.
I have seen Peter Drucker's "Innovation and Entrepreneurship". His book systematically tells the story of what is innovation, the importance of innovation, and how to innovate. The biggest highlight of the book is breaking one. Mythology - the myth that only high technology can innovate, Drucker cited a number of cases, indicating that the idea that high technology can be innovative is not realistic.
More than half of the small and medium-sized growth companies in the United States are engaged in traditional manufacturing, not high-tech companies. Only a quarter of the most growth companies in the 1980s were high-tech, and 3/4 were service industries and traditional manufacturing. So Drucker said: The concept of innovation must be high-tech is actually wrong, it can not explain the phenomenon that occurs in the market. The common pattern of high-tech companies is to shine, to expand rapidly, to fall suddenly, until disappeared without a trace, in terms of the probability and durability of innovation success, not as good as the traditional industry.
There are not many cases of traditional industry innovation, so we have to break a superstition and think that only high technology can innovate, not! Low technology can also innovate, traditional industries can also innovate, and I think there are more innovation opportunities in the traditional industry than in the high-tech industry. Nowadays, three major Internet platforms have been formed in China. Cloud computing and artificial intelligence are not what ordinary companies can do. What do you do? There are so many things that can be done in the traditional industry. If you want to innovate, look at the market and look at your own industry and start from your own reality. Adhere to the difference, adhere to their own characteristics, do not think about how to become a "pig" on the ventricle every day, the "pig" on the vent is too much, too crowded, leaving little room for you. Everyone does the same thing, it is not innovation, innovation is the "lone wolf" in the wilderness.

Not all Chinese manufacturing companies need Industry 4.0
In the past two or three years, I have visited some companies. I feel that the transformation and upgrading of the manufacturing industry does not necessarily require high technology. China and even low technology can solve the problem, and there is a lot of room for improvement. Some enterprises do not say Industry 4.0, even 2.0. Still not done.
The versions of industrial technology have their own definitions, and they are similar. I tend to think that 2.0 is the era of automation and standardization. Last year I visited a bicycle factory. Its paint production line was actually workers wearing masks, hats and working in open workshops with spray guns. Do not say damage to the worker's body, air pollution to surrounding residents, in such an open environment, dust, humidity, temperature are difficult to control, the quality of painting is naturally not up to the requirements. The challenge for this company is to implement Industry 2.0 as soon as possible, rather than big data and cloud computing.
There is a popular saying now that "the road is overtaking", I don't agree. Common sense tells us that the straight road can be accelerated, the cornering speed is accelerated, and the centrifugal force will take you out of the runway. The various stages of development of industrial technology are insurmountable, and the industry 2.0 is the basis of Industry 3.0. The natural extension of Industry 3.0 is 4.0.
If Industry 2.0 is standardized and automated, 3.0 is information technology, and 4.0 is intelligent. Industry 2.0 has done some preparatory work for informatization, such as CAD, CAM, ERP, OA, etc., the automation of a single process, but the processes are isolated from each other and are not open. The goal of Industry 3.0 is to open up processes such as manufacturing, cost, inventory, finance, human resources, and customer service, eliminate information silos, realize the interconnection of various processes, and the rapid flow of data and information between nodes. In short, the informatization of Industry 3.0 requires transforming the tree management structure commonly used by traditional large enterprises into a network type. With Industry 3.0, 4.0 is a matter of course, let the nodes of the network have the intelligence, that is, feedback, learning, self-adjustment function, Industry 4.0 is made.
Industry 4.0 sounds beautiful, but in my opinion, not all Chinese manufacturing companies need 4.0, and even advanced industrial countries do not need it. Germany first proposed the slogan of Industry 4.0. I went to Germany to see Mercedes-Benz and did not see it on its production line and assembly line. I asked the big company executives in Germany. What is the cost of doing Industry 4.0? What is the increase in capital expenditure? What is the return on investment? No one said it.
It is enough for the automobile production line to be industrial 3.0. A metal plate enters the workshop, the robot puts it on the punching machine, press molding, and the other robot transfers the molded parts to the next process, which is at most Industrial 3.0. There is no need to install a sensor on each piece of metal, each glass, and add a smart module to make the Internet of Things, let each part talk to the central control system. is it necessary? 4.0 is to spend money, can this investment have a profit?
Some medium-sized companies in Germany have done a good job in information technology. I have seen a company that provides processing tools for small and medium-sized enterprises. It has built an information-based tool management library. The customers have ordered turning tools, milling cutters and drill bits. In the library, each tool has a bar code, the machine automatically sorts, puts the box into the line and runs at high speed, and then packs and delivers it. Only some special tools need manual sorting. Which company will order the tool, quantity and delivery time in the system. The system connects the customer's order, the company's internal production, procurement, warehouse and delivery. Although there is manual intervention, the informationization is basically in place and sufficient. No, no Internet of Things, no intelligence, no need for Industry 4.0.
Enterprise innovation, technology itself is not an end, but a means to improve efficiency, efficiency is ultimately reflected in financial indicators, and the ultimate financial indicator is profit. If Industry 4.0 can't increase profits, what should it do? Innovation does not necessarily require high technology, and traditional industries can still innovate and still improve efficiency.

It is difficult for entrepreneurs to change from trading to innovative
What is an entrepreneur? The definition of the French economist Say: "Entrepreneurs are people who dare to take risks and responsibilities and create and lead a cause." I think this definition is accurate, although it is not refined enough. I want to emphasize that entrepreneurs are not taking the general risks, but the risks that the predecessors and their peers have never taken. “Creating and leading a cause” means that entrepreneurs are doing things that their predecessors and their peers have not done. Do what the peers and predecessors have done. This is a professional manager, not an entrepreneur. Those who bear this unique risk and are responsible for the consequences can be called entrepreneurs.
I divide entrepreneurs into three categories: the first is transactional entrepreneurs, which are characterized by the discovery and capture of market opportunities, especially when new demands emerge in the market, he will find ways to meet these needs, and realize their own value. While earning money, it also creates value for society. When creating social values, trading entrepreneurs don't have to be full of social responsibility. I really like Friedman's words: "The biggest social responsibility of a company is to make money for shareholders." Making money is a matter of course, unintentionally for the society. Contribution, this is also the thinking of Adam Smith.
The second category is management entrepreneurs. The China Europe Business School mainly trains such entrepreneurs. They are not ordinary professional managers. They are not managers who follow the rules and execute orders, but must innovate in the process of management.
The third category is called innovative entrepreneurs, such as Bill Gates and Zuckerberg. The three terms used today are usually referred to as entrepreneurs, but this does not mean the first two types of entrepreneurs. There is no need and value to exist. Innovative entrepreneurs often fail if they do not have a management entrepreneur to work together. Edison, for example, is both an inventor and an innovative entrepreneur, but he is not good at management and must find a team to help him run the innovative business.
In the current situation in China, the opportunities for the first category of entrepreneurs are becoming less and less, although most of the successful entrepreneurs in the past three decades have been transaction-oriented, and they have played a big role in the development of the Chinese market economy. Promote. However, it must be noted that with the development of China's economy and the maturity of the market, there is not much time and space left for such entrepreneurs. Trading entrepreneurs capture trading opportunities from changes in macroeconomic policies, but such trading opportunities Less and less, it almost disappears in a mature economy.
In the early days of reform and opening up, China was a shortage of economy. Enterprises did not have to worry about market demand. As long as the products were produced, they could be sold immediately. Trading entrepreneurs were born at the right time, and they were able to use the wisdom and wisdom of the Chinese people to the fullest. However, the current Chinese economy is no longer supplying shortages and becoming an excess economy. In an environment of oversupply, enterprise transformation is very difficult. Entrepreneurs are difficult to change from transactional to innovative, and even difficult to transform into management. They are still habitually asking: "How many points at the end of the stock market? Going up again? What opportunities will there be for government policy?” Still planning for arbitrage, not the thinking of innovative entrepreneurs.
Drucker said: Entrepreneurship is not only economic and technical, but also cultural and psychological. I very much agree that the barriers to change from trading to innovation are mainly thinking, cultural and psychological.
We know that the Chinese economy has entered the L-shaped track, and most Chinese companies will also experience L-shaped. I don’t know how long I have to stay at the bottom after going down. Don't simply squat at the bottom, you may be able to squat, but when the long recession ends, you will find that new opportunities are missing. In the long tail of the L-type, you should improve your ability to think independently, think about the problems faced by the company, and think about what the future of the industry will look like after this cold winter. Where can my chance be? Read less newspapers, read WeChat pushes, read more books, see what other companies are doing, what overseas companies are doing, what are the future development directions of products and technologies, and on the premise of keeping their cash flow, Try to make some innovations.
(The author gave a speech at the China Europe Alumni Shanghai Branch (Jiading) General Assembly; the author of this article: China Europe International Business School is a non-profit higher education institution jointly established by the Chinese government and the European Union to train international management talents. CEIBS6688)

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