Mark Greeven is professor of management innovation and strategy and dean of Asia at IMD, where he co-directs the Building Digital Ecosystems and Strategic Partnerships programme and the Strategy for Future Readiness programme.
The world’s attention is fixed on frontier artificial intelligence (AI) models, but China’s robot-making factories deserve just as much attention. Chinese e-commerce company JD.com has predicted that robots would ultimately replace its 700,000 delivery workers, while workers at South Korean carmaker Hyundai are threatening strike action over issues including the roll-out of robots.
These are early signs of what could be China’s next export shock. The first “China shock” was from its low-cost manufactured goods. “China shock 2.0” centres on high-end manufacturing, from electric vehicles (EV) to batteries. The next shock could come from AI-powered industrial, humanoid and service robots.
In China, they are intended to offset a shrinking workforce, since the country’s working-age population is projected to fall from 1 billion at its peak to just 300 million by the end of the century. But abroad, robots are poised to become China’s next export machine.
Beijing wants 10,000 AI-powered robots operating in commercial settings this year alone. Deploying them is one thing; turning them into sustained productivity gains is another. Beijing won’t leave that transition to chance: its latest five-year plan stresses human-machine collaboration and the roll-out of robots across the economy.
Many people see AI models as the next battleground for economic leadership. But they may be looking at only half the picture. AI models matter but they do not create sufficient economic value on their own. That happens only when they are turned into products, deployed at scale and woven into the fabric of the economy.
So the front line of the AI race is shifting from the model to the ecosystem around it: the power, infrastructure, applications and adoption needed to put AI to work. The model is only one layer of a much larger stack, whose value comes from how the various parts are stitched together. Embodied AI – melding models with industrial and humanoid robots – will become the next frontier in the coming decade.
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