When the Internet Denies Traffic
Driven by the economy, we look at demand in the short term and supply in the long run.
Author | Zhao Xiaoda
Editor | Tangyuan Garden
Today we use 10 questions to understand the industrial Internet under the aura of capital.
Although the industrial Internet has been developed for many years, there has not yet been a very clear and concrete “complete body” presented to the public. After listening to some classmates’ explanations on the Industrial Internet, you find that you don’t understand even more!
What is the Industrial Internet?
How is it different from the consumer internet?
How will it affect future business?
What benefits can it bring to our work and life?
“Long slope thick snow”, “cost reduction and efficiency increase”, in the label of the industrial Internet, there is no traffic legend of getting rich overnight, but it is the only way for every enterprise in the future.
1. What is the key point to understand the Industrial Internet?
Many companies and experts have tried to define the Industrial Internet. The following definition is very representative:
> > The so-called Industrial Internet is to use digital technology to digitize and network all elements and links of the industry, promote the restructuring and reform of business processes and production methods, and then form a new system of industrial collaboration, resource allocation and value creation. > > >
The so-called Industrial Internet is to use digital technology to digitize and network all elements and links of the industry, promote the restructuring and reform of business processes and production methods, and then form a new system of industrial collaboration, resource allocation and value creation.
From this definition, we can see that the reason why many people are unfamiliar with the Industrial Internet is that the Industrial Internet is not so much a specific “something” as it is a “class”, or even a “process” “ (from verbs such as “hua”, “push”, “form”, etc.).
As an “ecology” and a new industrial operation mode, the Industrial Internet, which we often call intelligent manufacturing, industrial Internet, B2B e-commerce, etc., are all its components.
For example, in the consumer Internet, QQ, Weibo, WeChat, etc. have reshaped the way people communicate, and Taobao, JD.com, and Douyin have reshaped the way people shop and consume——
What the Industrial Internet needs to do is to completely reshape the entire supply side.
When the R&D, production, sales, service and other links of an industry are all reshaped by digital technology, we can say that an industrial Internet has been formed.
2. Compared with Internet tools such as Baidu, Taobao, WeChat, and Douyin, what is the difference between the Industrial Internet?
There are many differences between the consumer Internet and the industrial Internet. Here are three aspects:
The first is the connection object.
When we pick up our mobile phones and open WeChat or Douyin, as individuals, we are already connected to the consumer Internet. The industrial Internet needs to be connected to B-end enterprises.
But there’s a problem here: a business, unlike an individual consumer, can be more abstract.
Is the Industrial Internet specifically connected to the factory building of the enterprise, or the machine tool? Or a workshop worker? Or the printer in the office? Or a legal person? It can be seen here that the industrial Internet is much more complicated than the consumer Internet in terms of connecting objects and methods.
In fact, under the Industrial Internet, all the above-mentioned subjects will be connected.
As mentioned in the above definition, the Industrial Internet is to network the “elements” and “links” of the industry, so everything from machines to materials, processes, and employees must be connected as one.
The Industrial Internet can be said to be the ultimate form of the Internet in its true sense.
The second difference is market characteristics.
In the field of consumer Internet, it is easy to have monopoly or super company. The term “Internet giant” is a vivid interpretation of the high concentration of consumer Internet.
The reason for the high concentration is that its market segmentation is relatively simple. For example, retail, food, clothing, digital products, medical equipment, various categories can be found on Taobao and JD.com.
This is because the consumer Internet belongs to the most downstream part that reaches end consumers, so the professional differences between different industries are not obvious here.
The further upstream, the deeper the industry accumulation and business understanding required, the greater the professional differences, and the more difficult it is to integrate. Therefore, the supply-side industrial Internet is the exact opposite of the consumer Internet, which is decentralized. It is an ecosystem that is in line with its own industry characteristics in every vertical market segment.
The third difference is the growth method or profit model.
Consumer Internet is a “winner takes all” , so it is necessary to use “burning money” for scale, use “short-term and fast” to grab the wind, and finally use value-added services to gain profits.
The Industrial Internet, on the other hand, emphasizes multi-party cooperation, and enterprises in the industrial chain share resources and even technologies to jointly improve efficiency, and finally exchange for the improvement of overall efficiency. Therefore, the ultimate realization of the Industrial Internet is that enterprises in the vertical field form a closely connected industrial cluster.
After talking about the difference, I also need to mention that the consumer Internet and the industrial Internet are not completely separated, but closely related.
As Ma Huateng said: “The industrial Internet without the help of the consumer Internet is like a river that cannot be connected to the sea, and may dry up in the desert.”
3. When it comes to the Industrial Internet, I often hear people talk about “stock” and “increment”. How do you understand it?
There is a very vivid metaphor: “Increment is like dividing the cake, and stock is grabbing the cake.”
In the past decade or so, the popularity of smartphones has grown from being used by a few people to almost every one in the whole country. This is a typical incremental dividend. Therefore, the increment is often related to the demographic dividend. The cake is huge, see who finds it faster and divides it up.
And when the increment peaks, companies need to consider stock replacement. For example, new taxi-hailing software such as Uber, Didi, and Shenzhou Zhuanche have entered the taxi market, and through innovative operating models, they have taken the cake from others into their own hands.
Therefore, the so-called stock replacement is what we often hear today: all businesses are worth redoing. Use a better business model to defeat and eliminate those “old players”.
Whether it is the consumer Internet or the industrial Internet, there are many opportunities for increment and stock. However, in general, the industrial Internet is more inclined to do stock.
This has something to do with China’s overall economic center of gravity.
Driven by the economy, we look at demand in the short term and supply in the long run. The era of the demand side has passed, and the country’s economic center of gravity will shift to the supply side in the future. What the Industrial Internet needs to do is to carry out structural upgrades from the supply side, and the ultimate goal is to “reduce costs and increase efficiency”.
4. Does the taxi-hailing software model belong to the Industrial Internet?
The taxi-hailing software model can be said to be a prototype of the Industrial Internet.
In the traditional taxi industry, passengers do not know the surrounding taxis, so they can only wait stupidly. The method of taxi-hailing software is to integrate driver information and passenger needs into the platform, and automatically match supply and demand based on data and algorithms.
The benefits brought by this approach are the above-mentioned “cost reduction and efficiency increase”. Part of the function of the Industrial Internet is to optimize the supply and demand of all parties in the industrial chain and improve efficiency through digitization.
However, the difference between the mode of taxi software and the industrial Internet is also very obvious.
First of all, the cash-burning model in the early stage of taxi-hailing software and the later monopoly position are typical characteristics of the consumer Internet, which are different from the industrial Internet;
Secondly, the industrial Internet involves many links in the upstream, middle and downstream, and its value chain and structure are much more complicated than taxi-hailing software.
5. Is the Industrial Internet the same thing as the “Industrial Internet” and “Internet+” that have been hotly discussed in the past few years?
Simply put, the Industrial Internet is a subset of the Industrial Internet.
First, the Industrial Internet is only aimed at the industrial manufacturing field, while the Industrial Internet can cover the first, second and third industries;
Secondly, the narrow industrial Internet is usually limited to the R&D and manufacturing links, while the industrial Internet includes the sales and service links.
In the industrial Internet compass model, the industrial Internet is used as a subset of the industrial Internet. Source: Mitu Consulting
The Internet + can be said to be a partial function of the industrial Internet.
“Internet +”, that is, “Internet + all walks of life”. Therefore, what Internet+ focuses on is to let the information exchange capability of the Internet benefit various industries, thereby optimizing the allocation of social resources. For example, the taxi software mentioned above can be understood as a kind of Internet +.
The functions of the Industrial Internet are far more than these. From the internal point of view of the enterprise, it involves all aspects of management, process, system and technology, and from the perspective of inter-enterprise collaboration, it involves many aspects such as smart logistics, supply chain collaboration, and financing.
The Industrial Internet can be said to be the most extensive Internet concept.
6. Many investment institutions are paying attention to the Industrial Internet. Will this track become overheated?
Many investors have paid attention to and talked about the Industrial Internet.
For example, Wei Zhe of Jiayu Fund has frequently invested in industrial Internet-related companies in the past two years; Zhang Lei, founder and CEO of Hillhouse Capital, mentioned in a meeting that in the past five years, the dividends of new technologies have shifted from consumer Internet to booming ones. Industrial Internet.
Zhang Lei, founder and CEO of Hillhouse Capital, picture from the Internet
Zhang Lei’s point of view can be verified from the trends of BAT and other companies in recent years. Traditional consumer Internet companies are stepping up the deployment of AI and cloud computing services.
AI, big data, cloud computing, etc. are all key underlying technologies of the Industrial Internet.
Looking at the themes in Baidu’s AI Developer Conference, Tencent’s Global Digital Ecology Conference, and Alibaba’s Yunqi Conference, it can be seen that BAT is gradually shifting its focus to B-side services without exception.
The industrial Internet track is indeed very hot. However, on the other hand, the attitude of capital towards the industrial Internet has not departed from rationality. As Huaxing Baofan said, the development of industrial Internet companies is often slow first and then fast.
The reason behind this is still related to the characteristics of the Industrial Internet. “Industrial Internet cannot burn money alone. Every industry is an independent battlefield.”
Therefore, no matter how hot the track is, it is impossible to “burn” a successful industrial Internet company. Rather than focusing on whether the track is overheating, perhaps more important is to clearly distinguish the development curves of the industrial Internet and the consumer Internet, and do not blindly apply the laws of the consumer Internet to the industrial Internet.
7. What benefits can the Industrial Internet bring to my daily work and life?
One of the most obvious benefits of the Industrial Internet for the consumer public may be the C2M model.
The so-called C2M (Customer-to-Manufacturer) means that consumers face manufacturers directly, skipping all intermediate links such as distributors and brands.
Tesla is even a C2M. When purchasing a Tesla vehicle, customers can choose various detailed configurations of the vehicle directly through the customization tool.
By skipping the middleman and going directly to the manufacturer, consumers can get more customized products at better prices.
In a sense, taxi-hailing software such as Uber and Didi are also “customized” services. Users can choose a suitable car model on the platform, book a pickup time, and enjoy private car-level services at the price of a taxi.
Therefore, returning to the above-mentioned “all businesses are worth redoing”, the Industrial Internet is precisely through digital upgrades, so that every business can achieve cost reduction and efficiency improvement. Specifically, it falls on consumers to enjoy better products and services at the same price.
8. In the future, if enterprises do not join the Industrial Internet, can they still live well?
The Industrial Internet, in the final analysis, is an upgrade of production methods.
For example, during the Industrial Revolution, did a company choose to use steam trains to transport goods, or continue to use horse-drawn carriages to transport goods?
In the information age, does a company start using computers, or continue to use telephones and faxes?
Similarly, today, does an enterprise choose digital and intelligent production, or does it choose to join the Industrial Internet?
In the final analysis, what enterprises have to choose is not which production tool, but whether to enter the future.
9. Will there be new monopolies in the Industrial Internet?
As mentioned above, the Industrial Internet itself has its own “decentralization” attribute.
This determines that super companies across multiple industries are unlikely to appear in the future. In the vertical field, the importance of collaboration will also curb the emergence of monopoly enterprises.
10. The rise of the consumer Internet made programmers a popular occupation. Will the industrial Internet also spawn new popular jobs?
The most demand for jobs in the industrial Internet is undoubtedly intelligent manufacturing. In the “Most Lack of Jobs” Occupation List recently released by the Ministry of Human Resources and Social Security, “Instrumentation Maker” entered the top ten.
And occupations such as “intelligent manufacturing engineering technicians”, “polysilicon production workers”, “communication engineering technicians” and “automatic control engineering technicians” have also become new hot and scarce jobs.
According to the analysis and forecast of data from the Ministry of Human Resources and Social Security, by 2025, the demand for intelligent manufacturing talents will reach 9 million, and the talent gap is expected to be 4.5 million.
Source: 2021 Blue-collar Employment and Salary Management Research Report
Compared with traditional manufacturing, intelligent manufacturing talents require a higher degree of professional specialization.
Whether it is from the number of gaps or from the quality of talents, the Industrial Internet is forcing China’s talent structure to move towards a more high-quality and reasonable direction. Under the urging of “Made in China 2025” , more and more professional blue-collar talents will become hot in the direction of national policy.
What other questions do you have about the Industrial Internet? Welcome to leave a message for discussion.
References:
2021 China Industrial Internet White Paper Search Consulting
Ma Huateng’s open letter: Tencent will take root in the consumer Internet and embrace the industrial Internet First Finance and Economics
Wei Zhe: Why should I focus on the industrial Internet Hunting Cloud Network
Zhang Lei of Hillhouse Capital: The Real Economy in the Industrial Internet Era Ushers in New Opportunities China Times
Bao Fan of Huaxing Capital: The growth of industrial Internet companies is often slow first and then fast Sina Technology
Intelligent manufacturing is thirsty for talents Economic Daily
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