Businesses in the Bay Area rush to further develop new-economy solutions in various sectors using advanced technologies, such as artificial intelligence, big data and cloud computing. Zhou Mo reports from Shenzhen.

A major push by local governments in the Guangdong-Hong Kong-Macao Greater Bay Area to develop the digital economy is expected to intensify in the wake of COVID-19, with stronger backing for businesses, which are themselves pouring in more resources to promote the sector’s growth.

The digital economy has been playing an increasingly vital role in fueling the country’s economic growth, especially in the past several months, as the pandemic has confined millions of people to their homes, driving the demand for online business, education, healthcare and entertainment.

The virus outbreak is thought to have pressed the “fast-forward button” for applying digital technologies, including 5G, big data and artificial intelligence, as well as for enterprises to make the digital shift.

As one of the nation’s most economically dynamic regions, the Bay Area has been taking the lead in propelling the digital economy.

According to a report by AliResearch and the 21st Century Economic Institute, the digital economy in the Pearl River Delta region, where the Bay Area is located, reached 4 trillion yuan (US$570 billion) in 2018, accounting for 44.3 percent of the region’s total gross domestic product. That level was the highest among major city clusters in the country.

Shenzhen takes the lead

Shenzhen topped the list in the digital economy’s overall development among the nine Guangdong cities in the Bay Area, according to the report. Official statistics show that Shenzhen’s digital economy market amounted to nearly 2.8 trillion yuan last year.

“Shenzhen has an edge in both technology and industry. The coronavirus outbreak has fully demonstrated its digital capability,” said Jia Xingdong, head of the Shenzhen Industrial and Information Technology Bureau.

Digital-economy-related industries in Shenzhen continued to grow in the past few months despite the pandemic-induced setback. The bureau said the software and internet services sectors saw their operating revenue grow by 7.6 percent between January and April on a yearly basis. The growth rate hit 22.9 percent in April.

Jia said Shenzhen’s digital economy has played a key role in buffering the outbreak’s impact on the city’s economy and promoting digital transformation and intelligent upgrade of industries. “Developing the digital economy is not only a national strategy, but also a new driving force for economic growth,” he said.

Shenzhen will step up development of its digital economy in the post-pandemic era and will provide more support for the construction of “new infrastructure” projects, such as 5G, AI, industrial internet, big data and cloud computing, Jia said.

It will accelerate the formulation of an implementation plan for innovative development of the digital economy.

Guangzhou, meanwhile, has pledged to build itself into a leading city in digital-economy innovation.

The Guangdong provincial capital will make greater efforts to develop smart governance, transportation, education, medical care and community, according to a government document. The powerful drive by local governments in the Bay Area’s core cities to prop up the digital economy is in line with the region’s efforts to make itself a global technology and innovation hub.

“Construction of a global technology and innovation hub calls for stronger capability in original innovation. It also involves creating mega technological platforms and developing high-end industries,” said Mao Yanhua, a professor at the Institute of Guangdong, Hong Kong and Macao Development Studies and deputy dean of the Institute of Free Trade Zones at Sun Yat-Sen University.

“All these capabilities can only be obtained through digital development. For example, original innovation covers advancement in AI and big data, both of which are digital technologies. Moreover, building up high-end industries also needs to take advantage of digital technologies.”

Mao called for deeper cross-boundary cooperation, especially between Shenzhen and Hong Kong, to take the Bay Area’s digital economy to a higher level.

Shenzhen and Hong Kong have complementary advantages in the field, he said. With strong research and development capability, Hong Kong excels in the innovation of digital technologies, such as financial and blockchain technology.

Shenzhen has already developed internet-based platforms like Tencent to offer digital services. But Mao said there are challenges in the process. “Shenzhen and Hong Kong need to step up cooperation in promoting the flow of data and data security to drive the integrated development of the digital economy.”

Building digital infrastructure

Placing high stakes on the burgeoning new economy, enterprises in the Bay Area are moving faster to better prepare themselves for a digital future.

Shenzhen-based internet giant Tencent said in May it will invest 500 billion yuan in the next five years to develop new infrastructure across the country.

The money will be used mainly for developing cloud computing, AI, blockchain, supercomputer centers, quantum computing and data centers, said Dowson Tong, Tencent senior executive vice-president.“By stepping up the construction of new infrastructure, the supply and demand sides of the digital economy can be better matched. It’ll also offer a strong guarantee for the development of industrial internet and help the economy achieve high-quality growth,” he said.

Telecom equipment-maker ZTE is also stepping up efforts to digitalize its business and helping market players across various industries make the digital transformation.

“The pandemic, undoubtedly, has changed our lifestyle. ZTE has not only set up a new dedicated organization to enforce its digital transformation, rebuild working procedure, tools, internal systems and services platforms, but is also looking closely at relating business cases in the industry,” said Tu Jiashun, ZTE principal scientist of core network.

He said the company has an independent enterprise business unit that is fully responsible for the customized digital transformation solutions of large-scale industries. It’s also providing a range of digital transformation products to operators to help them transform from communication service providers to digital service providers. The operators will then provide digital transformation services for small and medium-sized enterprises, he added.

“Just like new technologies making the traditional telecommunication industry realize the digital transformation from 4G to 5G in just a few years, greatly improving efficiency, the digital transformation of vertical industries will also greatly improve their income and efficiency,” Tu said.

Contact the writer at sally@chinadailyhk.com