China has been the largest consumer of industrial robots for six consecutive years. According to IFR (International Federation of Robotics) data, the size of China's industrial robot market was $4.2 billion in 2017, accounting for 27 percent of the global total, and will expand to $5.9 billion by 2020.
China has unique advantages to develop industrial AI.
First of all, data, the fuel of AI. Machine learning technology shoring up the current AI boom is extremely dependent on data. Due to China's population and large amount of equipment, Chinese enterprises have a natural advantage in accessing data.
Second, the hardware equipment and factories of Chinese manufacturing sector are relatively new compared with European companies, making it easier to realize equipment connection and plant transformation.
Third, Chinese manufacturing companies are willing to apply industrial AI. Deloitte's intelligent manufacturing research found that 51 percent of Chinese respondents use AI in manufacturing and management processes, and 46 percent of respondents have or plan to deploy AI in products and services.
Industrial AI is key for China to address its ageing problem and its corollary, the increasing labor cost, the country is set to be a giant market and main user of industrial AI, and EU undertakings are well aware of it.
The EU has its own strength: half of the top 10 nations with the most industrial robots per 10,000 employees belong to the EU. The highly developed nature of automation in Europe is also clear from looking at the manufacturing industry. Of the 22 countries with an above-average robot density, 14 are located in the EU. The robot density in the big Western European economies is still currently ahead of up-and-coming China.
The strength of the EU lies in its human capital, not only the number of highly skilled researchers and developers, but also an intellectual tradition dating back to the 16th century.
European startups can provide a substantial contribution given that China lacks talents and core technologies, as reflected by its share of patents of industrial robotics: less than 1 percent Most of Chinese robot manufacturers fail to own prototypes and have to focus on system integration.
AI and, in particular, industrial AI, are definitively areas where win-win agreements can be reached between the EU and China. The combination of China's giant market and Europe's traditional strength is set to unleash both great potential and benefit their industries.
Luigi Gambardella is president of ChinaEU. The author contributed this article to China Watch exclusively. The views expressed do not necessarily reflect those of China Watch.
