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Insight | Outbreak an Opportunity in Disguise for China's Digitization

March 9, 2020

Information technology is playing a key role in China's ongoing fight against the novel coronavirus, and the outbreak is believed to have provided a painful yet unique opportunity for the country to boost its governance efficiency through digitization.

“The application of technology in war is a lasting subject in human history. And digitization, having already permeated every aspect of social activities, is quite effective in relieving and solving social issues,” wrote Zhang Ying, professor with Peking University's Guanghua School of Management, in an opinion piece published in the Chinese-language paper Guangming Daily.

According to Professor Zhang, digital technology must rely on comprehensive, quickly updated data, fast computing capability as well as coordinated efforts among various departments so as to race against the spread of the virus and contain the outbreak.

“This outbreak will end eventually, but digital technology will continue to embed itself deeper in people's life and work by changing the way businesses are operated and government governs,” Professor Zhang said. “Before the outbreak, digitization is a bonus. After that, it will be a must.”

Following the extended Spring Festival holiday, hundreds of millions of Chinese continued to stay home to avoid potential infections and had their first taste of remote working. Similarly, many firms have experienced the efficiency of digitized operations as well as the incompatibility of digitization and many traditional methods. In order to achieve full digitization (not just its application in specific aspects like products, marketing and services), business operations have to be reformed.

Professor Zhang pointed out that anti-outbreak efforts have been sucking up offline resources, which is also forcing firms to pursue more online opportunities.

China's digitization started in sales, and it should continue to go deeper in the direction of optimized, smarter supply chains in order to serve every aspect of the society via data, computing, products, technology and experiences.

“A digitized supply chain not only covers logistics but also extends all the way from design, manufacturing to service, uniting every node in this chain into a highly-integrated, fully interactive neurological network,” said Professor Zhang, adding that what Chinese firms need is to figure out after the outbreak how to make such a network of their own.

According to him, the government will have better understanding and acceptance of digitization after the outbreak and should better utilize digital technology in economic development, security, people's livelihoods (healthcare in particular), environmental protection and other aspect.

Digital technology will play a key role in optimizing information flow from administrations to citizens and improving public services to cater to people's demand in a high-efficiency and high-precision fashion. In the future, a system of digitized identification data that includes citizens’ basic information will help improve governance capability. Several cities, including Hangzhou, Guangzhou and Zhengzhou, have already gone ahead in digital governance with good results.

“The novel coronavirus is an opportunity in disguise for China to complete a large-scale digitization transition that will help the country learn from past mistakes and make governance better in the future,” Professor Zhang added.

About the author:

Ying ZHANG is the Associate Dean and Professor of Marketing and Behavioral Science at the Guanghua School of Management. He received his MBA and PhD from the Booth School of Business at University of Chicago. His researches focus on market strategy, branding and customer relationship management. He has published extensively in both marketing and psychology.