In 2018, China's economy has encountered various shocks, but history never turns at the point where potential energy coalesces. Observe China's changes as meticulously as you would a tree. The method used to anticipate future trends and show the face of history is to look for small trends in slow variables.
Pay attention!
Look for small trends in slow variables.
What is a slow variable? What are small trends?
According to author He Fan, the three most important slow variables that have driven China's economic development over the past 30 years are industrialization, urbanization, and technological innovation. The strategy best suited to China's market environment should be to fully utilize the power of the masses.
Veterans don't die, they just put on new uniforms, learn new ways of fighting, and make surprising jedi comebacks.
Don't lose sight of the seemingly faint bright lights against the gray backdrop, there are some small trends that will really make a difference long after the fact.
After a wildfire, new wood grows.
Chapter 1 How to Watch a Tree?
We have entered waters where there are no charts, and a series of major changes will challenge our perceptions. Author He Fan tries to look at these variables with an "eagle's eye view," seeing both the mountains in the distance and the rabbits in the grass. There are some outcomes we can predict now, but that doesn't mean we know what's coming. there are many things that will change in 30 years, but there are also many things that won't change in that 30-year time frame.
Big River Model vs. Big Tree Model
The Big Tree Model is multi-dimensional and helps us to empathize with the life force of the mother by observing the shoots and new branches and constantly pulling our eyes back to the mother.
My (author He Fan) writing has only one purpose, and that is to awaken your sense of history, so that you can better understand your own destiny, as well as the times in which you live.
Like all complex systems, history is inherently unpredictable.
As with all complex systems, history is inherently unpredictable -- the underlying mindset: the quantum mindset of physics, specifically, "quantum entanglement".
A sense of history allows you to realize that your destiny is tied to the destiny of others, and to the course of history.
The same is true of observing history; you must learn to find a general impression that is greater than the sum of its parts.
For us, what we do not observe does not exist, but in the same way, what we can observe belongs to us.
Whether you look at investment or consumption, whether you look at domestic demand or external demand, China's economic fundamentals are not great or bad, but it's not the fundamentals that are going to be the main influence on the trends in 2019, it's confidence.
It's confidence!
It's confidence!
It's confidence!
My point is that confidence builds by seeing that there are smaller trends happening within the larger trend.
By reacting to the uncertainty of the future with the certainty of the past, you will only become more and more pessimistic.
What you need to look for is the "new new thing" that will bring about a "reversal".
How do you "see the whole truth"?
One way is to look for small trends in slow variables.
History is determined by fast variables, by slow variables, but ultimately by slow variables.
It's easy to overlook the slow variables, but it's the slow variables that are the locomotives that pull the course of history.
What we see as technological progress is the fast variable, what he (Prof. Robert Gordon, author of The Rise and Fall of American Growth) sees as technological progress is indeed the slow variable.
The slow variable is a trend that once opened, cannot be closed.
If you look at China's economic development over the last 30 years, you only have to look at the three most important drivers: industrialization, urbanization, and technological innovation.
Chinese companies are still lagging behind in core technologies, but they are very bold and ahead of the curve in terms of business model innovation.
The wind doesn't matter, the trend doesn't matter, the current matters.
--Let's discover the currents and feel the currents.
Major and Minor Trends
Find the slow variables, we can find the fixation, but find the minor trends, we can see the confidence.
The thing about minor trends is that they have to be small enough to show a sharp edge, but big enough to show power.
Small trends occur because there are big trends in the first place.
Look for big trends in the early stages of development, and small trends in the later stages of development.
In the coming era, the niche is the mainstream.
Most of the protagonists in our story are representatives of minor trends.
The most important thing is the 5 variables - and the most important part of He Fan's book "Variables".
1. Great Power Game
2. Technology Empowerment
? The most vital new technologies are always found in no man's land.
3. Integration of old and new
? Veterans don't die, they just get new uniforms and learn new ways of fighting.
4. Bottom-up
5. Rebuilding the community
Summary: sense of history, the long river model and the big tree model, 5 variables, 30 years, slow variables and small trends.
Among them, slow variables and small trends refer to: the method I use to observe the face of history is to look for small trends from the slow variables, the slow variables are the locomotive pulling the historical process, and in the future history, the niche is the mainstream.
Chapter 2: Finding Drones in No Man's Land
Most technologies are mashups of existing technologies.
In the startup phase, more important than the technology is finding the application scenarios.
There are three steps to finding an application scenario:
one is to select it,
two is to adapt it,
and three is to transform it.
Instead, new technologies have the most applications in places that seem the furthest away from them.
Technologies that can adapt to the market environment will survive.
There is a relationship to be cultivated between technology and the market.
It is not difficult for a new technology to succeed, what is difficult is that this new technology can drive more organizational changes, production changes and even institutional changes, creating a whole new ecosystem.
Brian Arthur, a famous economist, said that the evolutionary process of new technology gradually replacing old technology can be divided into six links.
The new technology becomes a new element in the body of active technologies.
The new element replaces components of the existing technology.
New elements create new demand.
The old elements are phased out and give the new technology more room to grow.
New technologies gradually become the mainstay of active technologies.
There is a consequent adjustment of the entire socio-economy.
The dawn of drones is quietly brewing in the dark night.
Agriculture is about to undergo a revolution.
In the information age, the future of agriculture will see different and new scenarios.
Future Chinese farmers will even be smarter and more fashionable than those in developed countries.
In the startup stage, the technology itself is not important, what matters is the application scene. There are three steps to finding application scenarios: one is selection, the second is adaptation, and the third is transformation. Selection means that it is often easier to find application scenarios for new technologies in the fringe and crossroads where few people pay attention; adaptation means that after you find an application scenario, you have to adjust the technology according to the scenario and the needs; transformation means that in the no man's land, the new technology can give full play to its own pioneer advantages, grasp more information, empower more ordinary people, and further create new needs until it rebuilds a more vibrant ecosystem.
You can look for the application scenarios of service robots from the two dimensions of place and time.
You'd better be ready now; there's no market in the future for HR managers who don't know how to interview robots.
It is not the level of technological sophistication that will determine the impact of new technologies in the future, but the application scenarios that enable them to be found.
If 3D printing can help companies quickly realize small-scale mass production, the global manufacturing landscape will be rewritten, and in 2019, we continue to wait.
In 2020, the 5G network will officially enter commercialization, 5G is likely to trigger a new generation of AR/VR experience consumption.
The new variable of finding drones in no man's land speaks to matching. When we go to observe the dazzling new technology, there is no matching market, there is no matching application scenarios, is an important perspective.
Jinduoduo washed away the turtle ideals of the good goods, replacing a set of downright local playing style.
In the early stages of growth faster growth must be tares rather than rice.
The business model of over-pursuing the speed of growth has become the biggest malignant weed in the Chinese market.
The growth rate of tares is faster than that of rice, and the growth rate of cancer cells is faster than that of normal cells. The era when speed was king is coming to an end.
The revolutionary innovation that led to the real rise of the Ford automobile and the emergence of the United States as a "nation on wheels" was not a core technology such as the engine, but an applied technology such as the assembly line.
At the time, the assembly line would only have appeared in the United States, not in Europe, which was more technologically advanced than the United States.
The revolutionary technological innovation that prompted the United States to become a major industrial power is not the core technology such as the engine ah, is the assembly line system of application technology, the reason why the United States appeared in the assembly line, because of the character of this technology is just right with the United States of America's market character match.
In the period of the Industrial Revolution, the United States of America's success is to find the assembly line; in the era of information technology, China's economy to ultimately win, to rely on the mass line.
The historical experience of China's revolution tells us that we are always invincible when we carry forward the spirit of the "mass line", and that we will always encounter all kinds of setbacks when we forget the "mass line". The development of China's economy will follow the same historical pattern.
Why is the "mass line" the most appropriate path for China's technological evolution?
Professor Zeng Ming wrote in his book, "The Dragon Walks the Earth," that "in a market like China's, where consumers are most concerned with price, product performance and quality are not the most important factors in winning the competition, it is a market completely unfamiliar to multinationals. This is a market completely unfamiliar to multinational companies, they can not get used to survive in such an atmosphere, Chinese companies are like a fish out of water ...... brutal price war, forcing Chinese companies to maximize the advantage of limited resources, the cost to the extent that others can not imagine."
Zeng Ming and Williams call the innovations of Chinese firms "the innovations of the poor."
They summarize three types of "poor man's innovation".
The first is integration innovation, that is, through the integration of existing technology, design closer to user needs, first from a point to achieve a breakthrough, and then modular way to do mass customization, the original segmentation of the market to connect, all in one net. Example: Haier's entry into the US market.
The second type is process innovation, that is, by combining cheap labor and assembly line, semi-automation with flexible and low-cost over full automation. Example: BYD's doing lithium batteries.
The third is disruptive innovation, the so-called "frog jump advantage" or "latecomer advantage".
The "poor man's innovation" alone will not lead the way, so where will China's innovation come from in the future?
China has at least two unique advantages.
The first advantage can be called the "engineer's dividend".
The second advantage is that China has a huge "market dividend.
The best way to take advantage of the "engineer dividend" is through "labor-intensive research and development. The best way to capitalize on the "market dividend" is through "market-induced research and development.
"China's society needs more than 100 universities to drive technological progress."
The "crowd path" is a blend of the "engineer's dividend" and the "market dividend," focusing on the rapid application of applied technology, and then reacting from the applied technology to the core technology, using strong market forces. The strategy is to focus on the rapid application of application technology, and then from the application technology to the core technology, and to use the strong market force to induce the core technology to introduce the strategy together with themselves.
Summary: mix and match, looking for the edge, "engineer dividend and" market dividend "," mass line ", matching, empowerment.
The empowerment refers to the fact that in the no-man's land, new technologies can fully utilize their first-mover advantage, grasp more information, empower more ordinary people, and further create new needs until a more vibrant ecosystem is rebuilt.
Chapter 3: Veterans Never Die
It has been said that for the automotive industry, the real core technology and value lies in the entire manufacturing process and manufacturing system.
In an age when everyone is praising innovation, let's honor tradition first.
There is no end to innovation, but tradition defines the bottom line.
The sharpest tools in the Internet industry are data, technology, and capital. After the Internet industry penetrates into the hinterland of traditional industries, it will gradually realize that they have limitations with these weapons.
The Internet industry is good at utilizing big data, but the traditional industry's advantage is small data.
Big data is data about the daily lives of each of us, and small data is data related to the depth of experience of a specific customer, or a subtle change in a specific production process.
The Internet industry is well versed in consumer-facing technology, but not in the production process.
To rely on capital alone to capture the market is like pulling chestnuts out of a fire.
The automobile industry is the representative of industrialization, is the traditional industry's strongest position, emerging industries and traditional industries between the offensive and defensive situation, may be reversed under the city.
The veterans are not dead, they just put on new uniforms and change the way of fighting, they are quietly accumulating strength, and will probably fight back from the place where people do not notice.
Haier's veterans
Haier requires that employees, no matter which position they hold, start at the front line.
In the past, Haier's transformation playbook was still that of a manufacturing company. For example:
Haier has tried customized production;
Haier has tried manufacturing + logistics;
Haier has tried manufacturing + intelligence;
Haier has tried the Apple model;
But also to be able to try the methods are tried, but Zhang Ruimin is still not satisfied until Haier really find their own way of playing.
Haier's way of playing is: de-Haierization.
Haier is now neither the production of products, nor the provision of services, not even the creation of platforms, Haier is to cultivate the ecological. Zhang Ruimin said Haier chose to transform from a closed section-level organization to an open entrepreneurial platform, from a walled garden to an ecosystem where thousands of species evolve on their own.
Kevin Kelly has a good saying that all companies are inevitably dead and all cities are nearly immortal. The reason for this is that corporations always want to be empires, and cities are open living organisms.
"Corporations must die, but ecology lives on."
Any past is a prelude.
Internet enterprises were originally good at breaching other people's moats, but now they are busy building their own moats, which may be monopolized data or huge capital; Internet enterprises originally believed in openness and freedom, but now they are obsessed with creating their own spheres of influence and building all-encompassing business empires; Internet enterprises were originally platforms for innovation, but now they are the next generation of innovative The Internet was originally a platform for innovation, but now it has become a hurdle for the next generation of innovative companies.
Internet enterprises are not lacking in anything, only the lack of battlefield training, the lack of fear of being in a life-and-death situation, the lack of a sense of crisis in the face of an army of people, the lack of foreign invasion of the bone marrow of the lack of vigilance and anxiety.
What is the ultimate goal of an enterprise? Traditional economics tells us that the goal of an enterprise is to maximize the interests of shareholders. This is a lie. Zhang Ruimin has always believed that it is not right for a company to put its shareholders first, much less create value for the company; they will only share the company's value, and only the employees and customers are the ones who create value for the company, which is what Zhang Ruimin has learned from his own experience.
In the ever-changing battlefield, you will slowly realize: detour is a shortcut, fuzzy is clear, dispersion is power, chaos is order.
The Super Bowl of eSports
More and more cities are considering supporting eSports clubs in the development of their sports and cultural industries.
What was once a fast-growing fledgling business has slowed down, and traditional stores that looked like they were at the end of their tether are turning around again.
The old is not necessarily obsolete, the old things also contains the gene of innovation, the new is not necessarily better, and even the new is not necessarily a new innovation, not simply abandon the old Yangxin, but constantly return to the tradition of rediscovering new ideas in the old things.
Summary: tradition and innovation, offense and defense, enterprise and ecology, new and old, veterans never die.
The veteran never dies refers to:
The experienced veteran can utilize the traditional foundation, plus the new foundation to make an era of industrial products to play a new charm, even if it is just a wine cooler.
Traditional businesses themselves are undergoing a series of adjustments. Veterans of the battlefield to cultivate the sense of smell, so that it has long been aware of the danger, such as Haier "de-Haierization" process. Previously, the fierce and flexible Internet companies instead of building high walls.
Perhaps this is the time to fight back.
Chapter 4: Meeting urban designers at the food market
The fourth variable is: bottom-up forces surfacing.
Energy. It's the ability to survive in difficult circumstances, an ability to quickly capitalize on opportunities to sprout. This is bottom-up power.
The urbanization that China has experienced over the past two or three decades is an extremely unique kind of top-down urbanization.
Top-down urbanization is no longer sustainable. There are three signals:
The first signal is the run-off of land.
The second signal is that many benchmark real estate companies have changed their names.
The third signal is shrinking cities.
Cities don't always expand, and some have begun to contract. It is only after a sudden slowdown in massive urban expansion that we notice this bottom-up force.
Mono-core and multi-core cities
The cities of the future are multi-core.
Many capital cities are instead less diverse and dynamic than non-capital cities.
Dongguan, which has no center, is instead able to connect the whole of China and the whole world.
The rhythms of square dancing and the street-dancing part-timers **** live **** exist, they don't merge with each other, but are at peace with each other.
Dongguan is a shrinking city, Dongguan's towns or floating or sinking, mainly to see who has better water. Those towns with a more complete industrial chain will be able to hit the water midstream, while those relying on foreign trade and real estate are having a more difficult time transitioning.
The industrial chain is the biggest advantage of Dongguan's economic development.
The new trend is that the industrial chain is becoming more closely short.
"New urban species"
Perhaps, Dongguan people themselves do not realize that this city without a center is the new species of the future city.
"Glazer's paradox":
As the cost of long-distance transportation falls, the value of proximity rises instead.
What does that mean?
It means that as cities become more integrated, the flow of people and goods between them becomes smoother, but the radius in which people live is likely to shrink rather than expand.
After a higher degree of urban integration, we will see that inter-city travel will become less, not more.
Dongguan is not the most modern or developed city in China; it is not as majestic as Beijing, nor as fashionable as Shanghai, nor as charming as Hangzhou, nor as casual as Chengdu. Dongguan looks a little old, a little messy and a little tacky. But Dongguan represents a new urban species. He has emerged, but remains neglected.
Following author He Fan, we continued our journey, and this stop came to Yiwu, Zhejiang Province.
Yiwu's industrial transformation in the past few years ahead has been as stressful as any city in the interior, including the northeast.
In Yiwu, the enterprises, those who changed to do real estate, investment in finance, but make faster, those who insist on doing industry has become a legend.
Yiwu's enterprises are good at surviving in the cracks of the market, communicating with each other through powerful information channels, and making trial and error efficiently.
Why can Yiwu have such a strong anti-risk ability?
First, because the enterprises in Yiwu are more pragmatic, they always take all kinds of risks into account,
Second, because the enterprises in Yiwu pay more attention to risk diversification,
Third, because the enterprises in Yiwu don't ask for the sky or the earth, and only rely on themselves.
"Smart contraction"
Only a few shrinking cities can realize "smart contraction".
Yiwu has been able to achieve "smart contraction" because it has remained open.
The East Asian economy was just emerging, and young people were particularly resistant to curiosity.
The value revolution
Cities are changing from carbon-based to silicon-based.
The Internet will disrupt the traditional concept of urban space, triggering all sorts of small and innovative activities. Pedestrian streets and commercial centers that were in prime urban locations begin to decline.
Old towns, old cities, and urban villages in a city may be more likely to benefit from this "face value revolution".
New towns that are artificially demolished are like transplanted trees. The old towns that renew themselves are the forests that live on.
Summary: top-down and bottom-up, mono-core and multi-core cities, shrinking cities, urban value revolution.
Chapter 5 Anaya and the Fan Elementary School
Tocqueville and Anaya
In 1934, based on his own investigations, French thinker Alexis de Tocqueville, who was only 29 years old, wrote his famous book, On Democracy in America.
Tocqueville said, "If citizens are allowed to worry more about small things and less about big things, they will instead care about the common good and feel compelled to constantly assist each other in achieving it."
In Anaya, you suddenly realize that passing the time is also something to be learned.
Tocqueville said that immigrant societies are born equal, not made equal through effort.
Only communal activity can curb egoism.
"Mastering the skills of communal **** life is something to be learned."
Rebuilding community
The divisions of community vary widely, but the expectations for rebuilding trust and intimacy are **** the same.
Why has this new variable of rebuilding community emerged? It's a current that has a number of forces converging on it. The first force is the society of abundance, the second is choosing one's neighbors, and the third is network connectivity.
The more gray the backdrop, the brighter this effort to rebuild community appears.
Things can be reversed. Put another way, the disadvantages of rural elementary schools may be their strengths.
Those who misjudge the children left behind do so because they misunderstand the theory of education.
Famous psychologist Judith Harris mentioned in her book "The Myths of Parenting" that the social environment that has the greatest influence on a child's development is a community of peers, not parents.
Fanjia Elementary School gives children what they need most: a community that is equal, inclusive, confident and optimistic.
The school with the most advanced educational philosophy in China is not a prestigious public or international school in Beijing or Shanghai, but a rural boarding elementary school deep in the mountains of Sichuan province.
The future income distribution is an N-shaped wave curve.
Laborers who do the dirty and tiring work will earn more.
Professionally trained, skilled laborers earn more.
The most successful people in the future will be lifelong learners, and it has little to do with whether or not they went to college.
Summary: Learned Tocqueville's Law, Cloud to Rain Law, Drama Reversal, Rebuilding Communities Trend, Smaller and Better Schools (Companies), N-Shaped Wave Curve.
Last big summary:
Over the next 5 or 10 years, we are going to learn to find small trends in slow variables. We are going to find small trends in 5 slow variables. These five slow variables, according to the authors, are the great power game, technological empowerment, fusion of the old and the new, bottom-up and rebuilding communities.
The trade friction between China and the United States is an inevitable result of development, and the game between China and the United States will continue;
5G will be brought soon, which will bring great changes, and even reshape the structure of society;
Veterans will never die, and the Internet giants can do nothing about it when they come across the traditional industrial technologies and processes, so let's learn from each other, and don't keep thinking about eating anyone;
The urbanization of Chinese society in the past two to three decades was led by the government, and now there is a new situation, the inflection point is coming, the city is not always expanding, and some cities are already contracting, the city's chief ruler must understand the reason, based on the city to do a good job of investigating, and believe in the masses, and believe in the power of the bottom-up;
The development of the social system has reached a certain stage, and there will be a new element of the, coupled with the different places of the People's values, culture and economy and other factors and reorganize the community, the formation of a new system, this new community, more powerful, more adapted to society, representing the future of the organization of new trends.