Digital transformation and technology infrastructure buildout | Brunswick

Digital transformation and technology infrastructure buildout

Today, leaders of global TMT companies face complex business and geopolitical challenges, as well as an evolving regulatory environment that is impacting everything from corporate strategy, technology innovation, to customer and supply chain management. Looking ahead in 2021, we identify five themes impacting the Chinese TMT industry: the rise of U.S. China techno-nationalism, increased regulatory pressure on Big Tech around anti-monopoly and data privacy issues, “ The New Normal,” focus on digital transformation and technology infrastructure buildout, and ESG as an urgent business imperative.

Theme Four - Digital transformation and technology infrastructure buildout

Set out in the latest 14th Five Year Plan (FYP) as part of the national development goals, China is putting digital at the heart of its industrial transformation and will increase investment in new infrastructure as part of its Digital China Initiative to create a “digital society, digital government and healthy digital ecosystem.”

To encourage innovation and technological self-reliance, the 14th FYP stated a target 7% R&D spending CAGR across the economy for the next five years. AI and quantum information, among other strategic sectors, were earmarked for fresh support. Industry will also receive more tax breaks to offset R&D costs.