Davos Economic Forum, technical 

leadership is the mostimportant core 

competitiveness

Pan and Lin Economic Observation Enterprise Goose2019-07-07

达沃斯经济论坛，技术领导力是最重要的核心竞争力

盘和林经济观察企业鹅号 2019-07-07

The World Economic Forum's 2019 New Champions AnnualMeeting is scheduled to be held in Dalian from July 1st to 3rd. More than 2,000political and business leaders, academic experts and media representatives frommore than 90 countries and regions will participate. Focusing on the theme of“Leadership 4.0: The Way to Success in a New Era of Globalization”, China willconduct in-depth discussions with political and business elites from all overthe world. Focusing on the theme of the forum, this forum has four sub-topics:“Implementing Technology Leadership”, “Maintaining Economic Leadership”,“Improving Responsible Leadership” and “Cultivating Flexible IndustryLeadership”.

With the rapid development of economy and technology,traditional labor-intensive enterprises have begun to gradually shift tocapital-intensive and technology-intensive enterprises. Affected by the agingof the population, China's labor costs have risen year by year, the demographicdividend is gradually shrinking, labor-intensive enterprises are facing thedilemma of rapid increase in costs, and the repetitive and dangerous work ofreplacing people in production through technology has become a reform. trend.

1

Even capital-intensive companies that want to takefull advantage of economies of scale still need technology to escort them.Traditional high-input, high-pollution production methods have becomeunsustainable. Capital-intensive industries such as steel and metallurgy needtechnology to help them improve production efficiency, reduce corporatepollution, and increase company output.

Therefore, technology is critical to any type ofbusiness.

In addition, from the perspective of product valuecomposition, if a company can have technical leadership in the industry, itmeans that it can give its products unique technological value added, and standout from the fierce competition of similar products. Nowadays, the way to earnexcess returns by relying on low cost has already encountered bottlenecks. Thecost of raw materials and labor is often rigid. If the cost of low cost is thedecline of product quality, it will definitely not pay off. Therefore, givingmore technical added value in the product is the correct way to obtain morelucrative profits. For example, the price of an Apple mobile phone with aproduct cost of less than 1,000 yuan can be as high as 6,000 yuan or more, andstill attract a large number of loyal supporters. .

Not only that, technical leadership will helpcompanies continue to update in every industry change, always in the industryleadership.

2

According to the famous Davydore law, the firstgeneration of products developed by enterprises will gain 50% market share, andsubsequent companies will find it difficult to obtain the same profit. At thesame time, companies will continue to update their products, leading companiesare more inclined to eliminate their own outdated products and quickly developnew products in the market. This means that companies with technologicalleadership can stand up to the constant changes in technology within theindustry and the market position will be solid.

In fact, technical leadership is not only important atthe enterprise level. At the national level, a large number of companies withtechnological leadership in various industries have also built a country'soverall technical leadership, which will become a national corecompetitiveness. a part of. As mentioned in the Davos forum, the disruptivetechnology, including cryptocurrency, 3D printing, driverless, 5G, networksecurity and so on. Behind every subversive technology, there are a largenumber of high-tech enterprises full of creativity. They represent the frontierlevel of China's scientific and technological development and are the guaranteefor China's scientific and technological progress. The combination ofinnovation capabilities and output levels of these companies has formed China’scompetitiveness in these emerging fields.

3

The previous chip crisis made us realize that China isstill subject to people in many high-tech fields. Now, when Huawei can face theUS's constraints and still hold the 5G banner, we can find that China'sleadership in high-tech fields is gradually improving. It can be seen from therecent game between China and the United States in the field of trade thattechnology has become a diplomatic bargaining chip. Countries withtechnological leadership in specific industries can influence the economicdevelopment of other countries through non-humanitarian methods. Although Chinahas always been active in the international arena with fair competition andopenness to the outside world, having technical leadership will ensure that wecan resist the improper means of other countries and maintain the competitiveorder of the world market.

Finally, in the era of rapid technologicaldevelopment, enterprises have the technical leadership to occupy a largermarket share, attract more capital investment, the country has the technical leadershipwill be able to occupy more in the global industrial chain. For a favorableposition, it plays an indispensable role in the world economy, so technicalleadership is the most important core competitiveness. (The author is apostdoctoral fellow in applied economics, a famous financial columnist)