China’s COVID-19 policy changes will drive digitalization and AI adoption

China’s COVID-19 policy changes will drive digitalization and AI adoption

February 24, 2023 - The 2023 Gartner CIO and Technology Executive Survey shows that Chinese companies surveyed have listed digital transformation as their top priority. Future policy adjustments in response to the uncertainty of the new coronavirus will become an important driver of digital transformation and artificial intelligence (AI) applications.

Influenced by the government's epidemic prevention policies over the past three years and the severity of COVID-19 infection symptoms, people are more inclined to choose online business processes. This change will prompt companies and organizations to redesign their business processes and operating models, reduce physical contact points and opportunities for offline gatherings, and ultimately accelerate China's digitalization process and the wider application of AI. To accelerate the application of AI, the use case prism in the figure below shows the priority of AI investment.

Gartner Prism

Online activities have become a future trend, not a short-term behavior

How to provide products and services to customers in a healthier and safer way will soon become a key measure of customer satisfaction. The mutation or recurrence of the virus may also have an impact on daily business operations in the future. Therefore, temporary or short-term digital intelligent solutions should no longer be adopted as in the past three years. Eventually, this lasting impact will become a new normal. Enterprises and organizations must adjust or even redesign business processes, decision-making processes, and working environments.

“Virtual first” or “digital first” will become a trend rather than a choice. Behind this trend, AI will play a key role in efficiently monitoring, verifying and coordinating all new business operations, and the data generated by these new digital solutions will in turn provide nourishment for AI.

Automation and resilient production lines and operations are priorities to address potential future impacts of COVID-19

The uncertainty of the coronavirus in the future will bring greater risks to the production of labor-intensive industries and the operation of customer-interactive industries. The policy adjustments brought about by this uncertainty will affect the decision-making of corporate leaders. The application of automation and AI will no longer be "optional" but "indispensable". Companies and organizations need to improve the intelligence of production scheduling, reduce dependence on people in the manufacturing process, and improve indicative decision-making capabilities.

Rethink the business case for AI applications, moving away from a focus on short-term ROI and costs

In China, organizations should consider people’s (both employees and customers’) long-term attitudes toward COVID-19. People will expect more efficient and convenient digital solutions, and short-term ROI will no longer be a major consideration. In addition, AI costs can be offset by the mitigation of COVID-19 risk and customer requirements for service continuity and reliability. In general, the level of digitalization and automation, as well as intelligent and flexible planning and scheduling capabilities, will become strategic development goals for organizations. These capabilities will give organizations an edge over their competitors in terms of reliability.