High-End Software: A Critical Support for Strategic Emerging Industries
Dr. An Hui, Senior Engineer and Director of the Software and Information Services Research Institute, specializes in the study of software and information service industry development. As a key member, he participated in drafting the "Adjustment and Revitalization Plan for the Electronics Information Industry" and the "Implementation Plan for National Science and Technology Major Special Projects on Core Electronic Components, High-End General Chips, and Basic Software Products." He has led research projects such as "Research on the Development Status of China's Industrial Software," "Policy Research to Accelerate the Convergence of Informatization and Industrialization," and strategic studies for the 12th Five-Year Plan for the software services industry.
As a pioneer in high-end software research, the China Electronics Standardization Institute (CESI), also known as the CCID Group, was one of the first to release research findings on "High-End Software Industry Research" and "Market Opportunities in High-End Software."
Interview with Dr. An Hui:
China Science and Technology Wealth: Based on your institute’s research and definition of high-end software, please describe the research journey and survey insights regarding high-end software? How do you understand the special status and role of high-end software in strategic emerging industries?
An Hui: The definition and scope of high-end software vary. According to our understanding, high-end software, as a relative concept, should have the following key points: it involves key technologies and core technologies, such as operating systems in basic software; it is located at the upper end of the industrial chain and closely linked with high-end applications, such as CAD software used in aerospace within industrial software; it represents the direction and trend of software technology and information technology development, such as cloud computing and cyber security; and it possesses significant industrial value and intellectual property rights value.
Based on previous research results, we believe that developing high-end software is an effective way to cultivate and develop strategic emerging industries. On one hand, including high-end software, the software and information services industry is China's fastest-growing "sunrise industry," being the core, soul, and important component of the information network industry. Accelerating the cultivation of high-end software can foster and expand new growth points like cloud computing and the Internet of Things, expand domestic demand, stimulate industrial and economic growth, and promote the development of the software and information services industry. On the other hand, high-end software has a wide range of applications, deeply penetrating into various industries and fields. The development of high-end software plays a crucial supporting and driving role in the development of new generation information technology and other strategic emerging industries such as new energy, new materials, environmental protection, biomedicine, and high-end manufacturing.
China Science and Technology Wealth: Regarding the main scope of industrial software, combined with the domestic application situation of software in mobile internet, cloud computing, CAD, CNC machine tools, etc., please elaborate on the innovative achievements and insights in the process of informatization of equipment manufacturing with relevant data support?
An Hui: Our surveys show that in 2009, the high-end market in the industrial automation control software field was monopolized by foreign products. Currently, domestically produced automation control systems are mainly concentrated in the mid-to-low-end markets, while the high-end control system markets for major projects such as petrochemicals, thermal power, and nuclear power are basically dominated by imported products. For example, Honeywell, Emerson, and Yokogawa import products dominate the automation control systems of the main installations in the petrochemical industry. In thermal power, ultra-supercritical units and 1000MW units are still entirely monopolized by imported products. In nuclear power, the automation control systems of China's million-kilowatt nuclear power plants so far mainly use the nuclear power plant automation control systems provided by foreign companies. Although China's nuclear power plants have had a relatively long operation time and accumulated nearly a hundred reactor-year operation experience, reaching international advanced levels in operation management, the automation control systems of million-kilowatt nuclear power plants are all foreign products. Only a few domestic enterprises such as Hollysys and Shanghai Automation Instrumentation have undertaken nuclear power automation projects, but their core main installation automation control systems are still monopolized by imported products.
Specific data on the domestication of CAD and CNC machine tool software may not be available now. However, it is certain that the proportion of domestic products is steadily increasing, and in some细分fields, domestic industrial software occupies most of the market. This market is not achieved through low prices but through high-quality products and localized services. It is also worth emphasizing that industrial software plays an important role not only in the informatization construction of equipment manufacturing but also has wide applications in aviation, aerospace, petrochemicals, steel, non-ferrous metals, electronics, light industry, and textiles. Industrial software plays an important role in industrial product R&D design, production control, production management, market circulation, sales services, recycling, and remanufacturing across all these industries.
China Science and Technology Wealth: What is the context of high-end software in the international environment?
An Hui: Based on previous research results, we believe that understanding the concept of high-end software in the international environment still cannot be separated from the above necessary factors, namely: software products themselves involve key technologies and core technologies, are located at the upper end of the industrial chain and closely linked with high-end applications, or represent the development direction and trend of software technology and information technology, and have significant industrial value and intellectual property rights value. In essence, whether internationally or domestically, high-end software plays a more significant role in promoting the development of the economy and society through information technology.
China Science and Technology Wealth: What is the relationship between high-end software and basic software in terms of inheritance and development?
An Hui: High-end software and basic software have a certain degree of overlap. Basic software includes desktop operating systems, server operating systems, database management systems, middleware, office software, and embedded basic software focusing on network communication, digital home appliances, information security, and automotive electronics. High-end software includes basic software, industrial software, information security software, cloud computing software, mobile internet software, and related information services. From the current general understanding, basic software is included in high-end software and serves as the foundation for high-end software; the scope of high-end software is relatively broad.
China Science and Technology Wealth: Under the current pursuit of breakthrough innovation, what will be the innovation model for China in core technologies involved in high-end software, and how will China's high-end software companies seize the opportunities during the 12th Five-Year Plan?
An Hui: There are no shortcuts in technological innovation. To support core technology innovation, the government will provide correct guidance in policy, and necessary support in terms of funds and talent. Enterprises, on the other hand, should recognize their advantageous fields, find the intersection with industry development trends, increase R&D investment and talent reserves, and take the lead in emerging areas to push for core technology innovation in high-end software and gain the initiative.
We believe that during the 12th Five-Year Plan period, China's innovation and development of high-end software and its core technologies should focus on capturing the demands of the integration of informatization and industrialization and information consumption, especially taking advantage of the new opportunities brought by the development of cloud computing, the Internet of Things, the convergence of three networks, and mobile internet. We should strengthen the innovation of high-end software development paths, create an integrated industry innovation system combining government, academia, industry, and users, and establish an industry ecosystem centered on leading enterprises. We should adhere to dual-wheel drive of technological innovation and market application, interactive progress of products and services, close combination of technology research and development, standardization, and application promotion, and achieve more technological innovations through close integration with application practice.
China Science and Technology Wealth: What supportive measures and favorable information are there for high-end software under the national policy background?
An Hui: Last October, the "Decision of the State Council on Accelerating the Cultivation and Development of Strategic Emerging Industries" (Guo Fa [2010] No. 32) clearly identified high-end software and new-generation information technology industries as important development fields, which was reaffirmed in China's 12th Five-Year Plan; at the beginning of this year, the "Notice of the State Council on Printing and Distributing Several Policies to Further Encourage the Development of the Software Industry and Integrated Circuit Industry" (Guo Fa [2011] No. 4) listed high-end software and specific content as key research objects. Relevant documents propose many specific promotion policies and guarantee measures to promote industrial development, which have a positive driving effect on the development of high-end software. China is currently drafting the "Strategic Emerging Industries Twelfth Five-Year Plan," and high-end software-related content will be included, receiving more active and effective policy support.
China Science and Technology Wealth: Is localization a real or false proposition in the field of high-end software? What does it mean for the future development of domestic high-end software companies with core technologies? Or what expectations should we have?
An Hui: Localization is an eternal topic and a goal we always think about and strive for. While recognizing the gap between our domestic high-end software and foreign counterparts, we should also note that in areas such as industrial software and enterprise management software, we already possess internationally competitive core technologies and the ability to compete with international giants. This requires our enterprises to innovate actively not only in technology but also in business models and operational models to win a larger market share and gain the initiative in the direction of industrial development.
We expect that under the support of the government and the efforts of the industry, China's high-end software companies will achieve rapid development in the future: first, large-scale applications will be realized in many fields, especially professional high-end software gaining a considerable share in the industry market, allowing companies to sustain development through the market; second, core and critical innovations will break through, achieving leapfrog development in technical innovation and business model innovation, bringing the development level of software products and system solutions to international first-class standards and gaining more say in international standards; third, the strength of enterprises themselves will be enhanced, producing several large leading enterprises with international competitiveness, playing a leading and driving role in the entire software industry.
China Science and Technology Wealth: As an expert who has long participated in software-related policies and reviews, what suggestions and opinions do you have regarding the current national policies and related support in the high-end software field?
An Hui: Suggestions for six aspects of work:
First, accelerate the improvement of the policy and legal system. Hasten the research and introduction of specific details to implement Document No. 4 issued by the State Council, particularly increasing support for domestically produced high-end software in government procurement.
Second, continuously encourage independent innovation. Strengthen cooperation and exchanges among enterprises, governments, universities, research institutions, and intermediary service agencies, creating and improving a complete high-end software industry chain integrating R&D, production, sales, services, and applications. Encourage and support leading enterprises to achieve joint innovation and application promotion of high-end software through forms such as establishing technology, standard, and application alliances.
Third, improve the industrial financing and investment conditions. Strengthen the construction of the financing and investment environment, establish and improve diversified financing and investment channels involving industrial capital, venture capital, private capital, etc.; rely on national major projects to explore and improve the new mechanism of central financial support combined with local follow-up investment.
Fourth, improve the industrial chain. With internationally competitive leading enterprises at the core, drive related fields' technology R&D and application promotion, building a complete industrial chain covering chips, software, systems, operations, and services.
Fifth, strengthen the training and introduction of high-end talents. Establish a supply-demand dialogue mechanism between talent training institutions and the software industry, improve the practical talent training mechanism centered on exemplary software colleges and vocational colleges closely integrated with talent training, formulate and improve reward policies and distribution mechanisms for high-end software talents, and increase the introduction of international talents.
Sixth, accelerate the cultivation of domestic demand markets. Promote the penetration and integration of software technology into traditional primary, secondary, and tertiary industries, greatly expanding the development space of the software industry. Conduct pilot demonstration work for high-end software applications, and study and formulate encouraging policies for priority use of domestically produced high-end software and services in various industries.