Asia Now: The Innovation Issue

6 ASIANOW | The Innovation Issue IT’S A BRIGHT MORNING in Shenzhen, China, and thousands of employ- ees are arriving at work on the campus of an insurance company. Rather than swiping identification badges, the workers pass through secure entrances thanks to facial recogni- tion software, powered by advanced camera technology and artificial intelligence (AI). The ease of moving through the campus without ID cards facilitates collaboration and simplifies logistics. With a workforce of tens of thousands and a client base of millions of middle class consumers, the company is embracing computer learning to improve efficiencies. While adjusting insurance claims, for example, the company trains computers to evaluate photo submissions to speed up processing. And for attracting business, its marketing department uses advanced algorithms to target opportuni- ties and anticipate customer preferences. A favorable regulatory environment gives China’s businesses a meaningful advantage in deploying AI. By adding AI to their list of subsidized private industries, China’s policymak- ers aim to turn the country’s AI industry into a US$150 billion juggernaut by 2030. 1 For global investors, China’s investment in AI could spur earnings growth in sectors includ- ing information technology, health care and industrials. By design, China’s policymak- ers are looking to foster innovation-based businesses, which they believe are essential for economic growth. While a positive regulatory environment helps, China needs a deeper bench of talent to fully realize its AI ambitions. In the hunt for AI programmers and soft- ware developers, China must compete with Silicon Valley, London and beyond. Global tech firms are paying salaries from US$300,000 to US$500,000 for AI talent with only a few years of work experience, according to a New York Times report in 2017. As a result, graduates from elite computer science programs are in high demand. Government backing is helping spur investment in AI, amid concerns about state surveillance. Taking the Lead in AI