Gartner hype cycle highlights China's aggressive investment in high tech despite economic slowdown

Via Gartner Newsroom

Aug 17, 2016

BEIJING, China , August 17, 2016 View All Press Releases

2016 Hype Cycle for ICT in China Focuses on the Impact, Adoption Pattern and Maturity of 23 Technologies

Despite the slowdown in GDP growth to 6.9 percent in 2015, China is still making aggressive investments to drive the adoption of high technology by local enterprises and organizations, according to Gartner, Inc.

"The Chinese economy is facing challenges as it nears the end of its "demographic dividend" fueled by an oversupply of low-technology markets, said Matthew Cheung, research director at Gartner. "For Chinese enterprises, the adoption of bimodal IT, Internet of Things technologies and digital business will be critical to business transformation during China's economic transformation period."

The Chinese government is attempting to accelerate the country's economic transformation by supporting investment in high-technology industries and encouraging more innovation. Its "Internet plus," "mass entrepreneurship and innovation" and "made in China 2025" strategies have become key phrases for the areas that receive more attention and investment from the government and private sectors. ICT will assume an important role to support this transformation.

Gartner's 2016 Hype Cycle for ICT in China report maps 23 hyped technologies throughout the life cycle stages of on the rise, at the peak and sliding into the trough (see Figure 1). Compared with mature markets, some technologies (such as cloud and digital commerce platform) are being adopted faster in China, but some are slower (such as autonomous vehicles).

Figure 1. Hype Cycle for ICT in China, 2016

Source: Gartner (July 2016)

Enterprise Agile Adoption Is in Its Infancy

The use of agile methodology is still in its infancy in China. Although project-level agile adoption continues to have an increasing uptake in many Chinese, scaling it at an enterprise level for use in a more complex level of product development or portfolio planning and coordination is still very limited.

"As enterprises in China move toward digitalization, the reality of digital business will drive IT organizations to conclude that agility is now mandatory," said Maritess Sobejana, principal research analyst at Gartner. "In most cases we expect that strategic adoption of enterprise agile methods, driven by business demands for faster time to market, will start to grow within the next five years."

Connected Home Sits at the Peak of the Hype Cycle

Perched at the very top of the Peak of Inflated Expectations is the much-hyped connected home, which is attracting electronics and home appliance manufacturers, internet service providers, communications service providers, and app providers to develop different connected products and service platforms.

"In China the increasing penetration of connected home solutions will enable device and service providers to start their digital business transformation by analyzing the data collected from many households," said Roger Sheng, research director at Gartner. "It will drive the hardware manufacturers to change their business model to be service-oriented and create value-added services via connected-home device portals."

Smart City Framework Hype Level Falls

More than 600 cities in different tiers will launch different types of smart city projects, and global and local IT vendors will join different projects to deliver IT products, infrastructure buildings and implementation service offerings.

"With the planning of China's 13th Five-Year Plan, smart city development is under the urbanization framework, and as such, has moved from peak hype to the Trough of Disillusionment, which will bring about more actionable activity and actual projects," said Bettina Tratz-Ryan, research vice president at Gartner.

Big Data Heads Toward Wide Adoption in China

The massive consumer base and the number of internet users in China (estimated at 650 million internet and 980 million mobile internet users in 2016) present the most-promising big data opportunities. Led by hyperscale internet companies such as Baidu (internet traffic data), Alibaba (supply chain and transaction data) and Tencent (social data), approximately 25 percent of businesses have been pursuing the value of big data.

"The government-sponsored strategy 'Internet Plus' is targeted at boosting economic growth through digital transformation," said Jie Zhang, research director at Gartner. "It has issued a detailed action plan for 11 key industries in 2015, mandating the necessity of digital business transformation by leveraging big data and cloud technologies."

Gartner clients can read more in the report "Hype Cycle for ICT in China, 2016." This report is part of Gartner's Hype Cycle Special Report for 2016. This Special Report provides strategists and planners with an assessment of the market hype, maturity, business benefit and future direction of more than 2,000 technologies, grouped into 11 topic areas. Learn more in the complimentary webinar “Gartner Hype Cycles 2016: Major Trends and Emerging Technologies.”

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