Zhu Min, Dean of Tsinghua University National Institute of Finance: Artificial intelligence is the ultimate future of technology

According to Leifeng.com, the China IT Leaders Summit was held in Shenzhen on March 31. As one of the most important technology events in China, the summit also attracted many big names. Among them, Zhu Min, Dean of the National Institute of Finance at Tsinghua University, delivered a speech entitled "Three Major Disruptive Changes in the World Economy and the Industrialization Development of Artificial Intelligence" at the opening ceremony.

Zhu Min said that 10 years after the crisis, the world economy has undergone profound structural changes; and in the process of economic development, three exogenous variables have emerged: artificial aging, climate change, and economic structural lightening. These three variables are profoundly impacting and changing the world, and also provide a magnificent stage for the development of AI - the key to solving these three problems is artificial intelligence.

Zhu Min said in his speech that artificial intelligence is the ultimate future of science and technology and will change human beings themselves. To this end, he gave several examples:

• Artificial intelligence is subverting the future and will change, update and innovate almost all products and services: communications, search, travel, medical care, health, education, entertainment, and consumption; it will change the military and national defense; it will change the production and distribution of material and wealth; it will change the organizational structure, social form, culture, and values ​​of society.

• In addition, artificial intelligence helps the automation of manufacturing, and generates large-scale application scenarios in industrial production itself. For example, robots will have great development space in the future. Smart manufacturing will open up the data flow of industrial enterprises from three dimensions (factory platform architecture, product life cycle, and supply chain).

• Artificial intelligence has a huge impact on climate change, providing better solutions and more accurate predictions of temperatures;

• AI is also helping Beijing reduce smog.

Finally, Zhu Min said that we must meet the challenge. The industrialization of artificial intelligence can change ourselves, change the world, and change the trajectory of historical development - however, we are still in the initial stage of AI.

Attached is the full text of Zhu Min’s speech at the China IT Leadership Summit:

I am very happy to return to this podium again. Two years ago, I spoke on this podium as a pseudo-AI expert about how AI will subvert the world in the future. Today, I would like to return to my duties as an economist. My topic is the three major disruptive changes in the world economy and the industrial development of artificial intelligence.

Ten years after the crisis, the world economy has undergone profound structural changes. Population aging, climate change, and the lightening of the economic structure, that is, the consumption structure of people is changing towards the service industry, which is profoundly changing the world. From the perspective of economists, we call it exogenous variables, which are changes that are not subject to human will. We can only accept and adapt to them. These three changes also provide a magnificent development stage for artificial intelligence, so artificial intelligence can help solve these three problems and find its own blue ocean for future development in the process. This is a theme I want to talk about today.

1. Population aging. We can see that the blue oblique line is the world's population, which is growing continuously from 7.5 billion this year. The green figure on the right is the labor supply of developed and emerging economies. You can see that the peak was in 2008, and then it gradually declined, falling to 0 around 2040, and then it was negative for a while. The labor growth rate in Africa, the red line, is constantly rising, reaching 2,100 yuan, and there are more than 50 million labor supply. Therefore, the global labor supply market is very large, and employment and immigration will become a big problem in the future. The biggest problem behind this is aging. I made a simple graph. I subtracted today's population from the population structure in 2050 to see in which age group the net population growth is. In 2050, the global population will increase by 2.3 billion compared to today, but the net increase in population is mainly in the 60-year-old and 70-year-old age groups, and there is very little growth in the 50-year-old and 40-year-old age groups, so the aging trend of the whole society is very large.

The aging problem is particularly serious in developed countries. You can see that the main population growth is in the 1980s, with a net increase in the 80-year-old age group. Japan is the most typical aging country. Compared with today, Japan's net increase in population in 2050 is all over 80 years old, and there are very few people in their 70s, so the aging of the population is very serious. Aging has changed the demand structure, supply structure, and government policies. China is not easy either. Compared with today, China's net increase in population in 2050 is in the 60s, 70s, and 80s. The most severe decline in China is the young and middle-aged people in their 20s and the most experienced middle-level cadres in their 40s, so China's aging problem is also very serious. If I move the time period forward and compare today with 2035, using the blue line for 2035 and the orange line for 2050, the labor force in the 30-year-old age group will be reduced by 50 million in 2035 compared to today, and the number of people around 45 years old is also decreasing. By 2035, the number of people will be in the 60s and 70s. Of course, by 2050, the growth will definitely be biased towards the 70s and 80s. So all this has already happened in 2035. I think everyone here will see 2035. I don’t know if I can see it, but many people here can see 2050. You may all be in the 70s and 80s by then. The aging population is very serious.

This is the population structure of Beijing. The first figure is basically based on people aged 20. Beijing will be based on people aged 50 in 2035, which is a triangular rise. By 2050, the population structure of Beijing will be based on people aged 60 and 70, which is the largest part of the population. The rise of the entire aging population is very strong. The second most rising province in China is Guangdong Province, which is also very aging, and is very similar to this figure. This will have a major impact on China's economy. Japan is the earliest country to age, so if we take Japan as an example, Japan's entire industrial structure has undergone fundamental changes from the 1990s to 2016. The entire construction industry, manufacturing industry, service industry, and financial industry are shrinking, while the communication, technology and health service industries are rising. All government expenditures remain unchanged, only health and medical expenditures are rising sharply. This is an inevitable process of aging.

In the process of aging, the real estate industry in Japan has seen a sharp decline in real estate construction and sales, and the price of land has also fallen sharply after rising. We all say that Japan's real estate is affected by the bubble economy, which is correct, but the bubble is the trigger point. If it is a bubble, it will definitely rebound after it falls. The reason why it did not rebound is that the bubble caused fear of aging, and the real estate industry has never recovered since then. Aging is an irreversible process. Today we have completely accurate information about aging, because it is all extended from the concept of birth age, with extremely small errors. The economic structure, demand structure, and behavioral structure of the entire society will undergo profound changes, and it is already happening today. So this is the largest exogenous variable.

The second exogenous variable is climate change. We talk less about it, but the impact of climate change is huge. By 2060, 50 years later, if the temperature is not controlled, most areas of the world will enter a hot and dry environment. Only Siberia in Russia, northern Canada, and some small parts of Africa will be habitable. So climate change has become the biggest challenge for mankind. A very important reason for climate change is our carbon emissions over the past 10,000 years. Carbon emissions have risen and fallen every 1,000 years, but in the last 1,000 years, carbon emissions have risen sharply, which is the impact of human activities. A very important reason for carbon emissions caused by human activities is the sharp increase in energy, especially the consumption of petroleum energy. Therefore, the most important issue in controlling atmospheric changes and climate change is to reduce energy consumption and improve energy efficiency.

China's energy consumption per capita GDP is 1.01%, Japan is 0.19%, and the world average is 0.42%. Therefore, China's level is far higher than the world average, which shows that China's energy efficiency is too low and its emissions are too high. China has a lot of room for development and improvement. For this reason, China's investment in environmental protection will lead the world in the next few years, until after 2020, and even surpass the United States. China's overall investment in urban environmental protection and industrial pollution control is rising sharply, and investment in renewable energy is also rising. Therefore, energy and environmental protection are particularly important capabilities for our future investment and development. Improving energy efficiency, improving efficiency, and reducing emissions are a particularly important challenge we are facing now. The price of renewable energy has been falling sharply due to global technological development. Let me give you an example to illustrate the impact of climate change on the entire economy. Today, the global production of electric vehicles and hybrid vehicles accounts for only 1.12% of the total number of vehicles in the world. This is today's level. You may not know what our goal is in China. China's goal is to increase the proportion of electric vehicles and hybrid energy vehicles to 40% of the vehicle proportion by 2030. This is an incredible leap. I think this will be difficult to achieve, but with this goal, you can imagine that the entire automotive industry will undergo a disruptive restructuring in a fundamental sense. Many more companies will need to produce engines, and the entire panel, transmission, car body, and chassis will change, forming a complete industrial chain. China is now the world's largest automobile sales market, producing 30 million vehicles a year. How big is the electric vehicle market? So it has changed investment and changed the future economic structure and consumption structure.

3. The lightening of economic structure and people's consumption preference are shifting to lightening. Since the financial crisis, we have seen a rebound in global economic growth, which has been growing at a medium-low speed since the rebound. In the past 10 years, the global economic growth rate has been lower than the economic level before the crisis. In the next two or three years, the economy will continue to decline slowly. This is a major trend in the global economy. In this major trend, we see that investment is seriously insufficient. If we compare the investment level that the world can have today with the actual level predicted in 2007, the investment level in European and American countries has fallen by 25 percentage points of GDP. Investment is insufficient. The insufficient investment is due to the continuous lightening of the entire industry. You can see that the service industry in Europe, America and Japan, including the service industry in the United States and Europe, has a very high proportion. The world's economy is lightening. We want to see the changes in people's demand preferences for material products and services. We used a very interesting indicator. 15 years ago, if you had one dollar of new income, how much money did you have to buy imported goods? Today, if you have the same one dollar of new income, how much money do you have to buy imported goods? We call it the income elasticity of imported goods. If this elasticity remains unchanged, all countries in the world should be on the 45-degree curve. The blue ones are developed countries, and the red ones are emerging economies. You can see that almost all countries are below this curve, which means that the demand preferences of almost everyone in the world are shifting towards the service industry. This is understandable to everyone. During this Spring Festival, our consumption on entertainment, tourism, etc. exceeded our consumption on pork and alcohol, and our consumption on health far exceeded our consumption demand for refrigerators and color TVs. Therefore, consumption is moving towards the service industry and towards light industry. Industry is lightening. This is changing according to people's preferences. This is another huge change.

So after the crisis, trade was declining, and China's service industry was also rising. The red curve is the rising curve of China's service industry, and the blue curve is the decline of manufacturing industry. In this process, a very obvious thing has occurred. If we compare the labor productivity of the service industry with the labor productivity of the manufacturing industry, we find that the labor productivity of the manufacturing industry is still 20% higher than that of the service industry. If this situation continues, it will be very troublesome, because the proportion of manufacturing industry is declining, the high-labor industry is declining, and the service industry is rising. If the labor productivity of the service industry does not go up, your economic growth will inevitably fall. We compare the service industry with the world. From a large amount of data, China's market-oriented service industry, including e-commerce, electronic games, etc., has a very high labor productivity, which is almost the same as the world. However, China's non-market-oriented service industry, education and health labor productivity is far lower than the level of the world's countries at the same stage of development as China. Therefore, further reform and opening up in the future, opening up the service industry, and improving the labor force of the service industry have become a particularly important thing.

If we combine the three major changes, the most important and powerful tool to help solve these three major changes today is artificial intelligence. Artificial intelligence is subverting the future. This is a PPT I used in my speech here two years ago. Today I still hold this view. It is innovating all products and services, changing all manufacturing and service industries, changing the military and defense, changing the production and distribution of materials and wealth, and changing human beings themselves. We have classified the world's newest artificial intelligence applications into 10. These are the applications that we think can be widely used. The first is machine vision, the second is speech and sound perception, the third is natural language processing, the fourth is search, information processing and knowledge extraction, the fifth is predictive analysis, and the sixth is planning and exploration agents, etc. These are the most common technologies in our application fields, and these can play a very important role in helping to solve the three major economic structural changes I just mentioned.

First, in the manufacturing industry, China's young and middle-aged labor force is on the decline. Pony just talked about retrieval, which is automation. R&D, operations, sales, and middle office management are now very common. In the industry, there are multi-customer target operations, throughput optimization, and predictive planning. These are all real-life artificial intelligence applications, which are already very common. Therefore, artificial intelligence helps companies automate. Window automation, preventive maintenance, equipment drive, visual inspection, and other entire process simulations have almost mature technologies. Therefore, artificial intelligence automates the manufacturing industry, and robots are a particularly important link. The density of industrial robots per 10,000 workers in China is far lower than the world, lower than South Korea and Singapore, and our overall level is very low. The core structure is mainly CNC, servo systems, and reducers. Foxconn fired millions of workers and used millions of robots to build fully automatic assembly lines, raising the pass rate of mobile phones to 0.7 per million.

This picture is very important. Artificial intelligence is the first to connect the three dimensions of manufacturing. The first dimension is at the manufacturing level. It opens up all the manufacturing layers from IT and cloud to the physical level, and to the production line level. This has never happened before. I met Haier's CTO yesterday. He used to work at Microsoft. Haier has done a very good job in connecting the verticals, which has greatly improved the level of control over the entire process. Second, it manages the entire supply chain. Among the 358 supply chain manufacturers in Shenzhen, 56 core supply chain manufacturers are completely managed by the artificial intelligence system. Therefore, we were able to increase its market share in the world market from 15% to 75% in 2015, and beat its competitors from 75% to 15% today, all because of the very important industrial chain management.

Finally, artificial intelligence helps the updated design of products, which is completely intelligent. A product has an image product process from the beginning of production, so the development of new products, each product will become a product like the Apple mobile phone, which was mentioned by Yu Chengdong yesterday, and it is no longer a product that is researched. Therefore, three-dimensional space helps our manufacturing industry to be fully automated, which is a very important concept. China is a manufacturing powerhouse. Today, the total value of China's manufacturing industry is the sum of the United States and Germany, and next year it will be the sum of the United States, Germany and Japan. Therefore, the artificial intelligence and intelligence of the manufacturing industry is the future shared by artificial intelligence and manufacturing. This future market is an incredible market. Smart logistics, from production to transportation, to warehousing, to delivery, to consumption, is now going very well. Smart logistics is mainly platform intelligence, operational intelligence and operation intelligence. Now our platform and digital operation are still developing, and this prospect is very large. Manufacturing is a 12 trillion yuan industry, which is a huge industry. The circulation industry accounts for 12% of GDP, and China accounts for 15%, so this is an incredible space.

Artificial intelligence has a great impact on climate change. Climate simulation analysis provides better climate solutions and improves energy efficiency. We found that artificial intelligence can predict temperature more accurately. Changes in temperature can control changes in air conditioning. The energy that can be saved is astronomical. Changing the air conditioning in each building by temperature is an incredible thing. So there are many things that can be done in this regard. This is one thing Microsoft is doing. This is precision agriculture, which is becoming more and more common now. Small-scale experiments have already begun. I think large-scale promotion will also happen soon. Beijing's pollution has been greatly improved. You may not know that this is related to artificial intelligence. Artificial intelligence can focus the observation target on every square kilometer of area through remote control, and the accuracy is greatly improved. Cloud computing automatically compares and calculates, so if you have any problems, the cloud will tell you immediately. We used to only be able to observe an area of ​​10 square kilometers, and we had to rely on people to observe at fixed points. Now it is completely remote sensing, completely cloud, and completely machine, so Beijing has more and more blue skies.

Third, improve the labor productivity of the service industry. Medical intelligence and smart medical care are what we talk about the most. From remote to auxiliary, to solutions, to research and development, to operations, to marketing, the medical industry is developing the fastest. If the case of using retina to analyze cerebrovascular disease is mature, the combination of man and machine for breast cancer in women can reduce the error rate to 0.5 percentage points, which is also a remarkable progress. Therefore, the development of artificial intelligence in the medical industry is very powerful, so the market development of the medical industry is very rapid, very rapid. We believe that from now to the next five years, it will be about ten times the development, and China's latest corporate mergers and reorganizations in the medical industry are developing very rapidly. In the future, there will not be many institutions in the operation planning of medical care, and artificial intelligence can help improve a lot of space.

Japan is the most typical country to use robots to serve the elderly and reduce human labor, which has become very common. We are still in the initial stage of artificial intelligence. It is still very early for us to develop to this day. This picture shows that the traditional way of dragging a square wheeled cart in the era of the cavemen is to say that I have artificial intelligence to help you. Do you want it? "Sorry, I don't want it. I'll pull my cart." So we don't know where the future development will go. The prospect of this development is extremely broad. If we summarize all the content, in the ten years of the crisis, the world economy has undergone profound structural changes. The three exogenous variables of population aging, climate change, and economic structural lightening are changing the world, providing a magnificent stage for artificial intelligence. To meet the challenges, artificial intelligence can help these industries solve their problems, and at the same time get its own development in the process, change these industries, and thus change the course of history.

I think artificial intelligence is a case we see today, which is the best tool and channel to fundamentally change the decline of the elderly in Japan. So the combination of the two will bring an extremely bright and challenging future. Thank you!

Wang Xing said that Jack Ma has integrity issues, Alibaba responded; JD.com responded that "400 people quit in one day"; Apple disclosed more details of Apple Card

Zhou Hongyi launched three new products, targeting middle-aged people who are married and have children and are particularly tired of living.

Meituan was punished for monopoly: forcing merchants to choose between two options; the three AI giants won the 2018 Turing Award; the human sixth sense was confirmed for the first time

Huawei bought 500 acres of land in the UK to build an "optical chip" factory

Shenzhen Airlines App hijacks WeChat; Apple News crashes on its first day; Huawei P30 "telescope phone" officially released