Innovation must go beyond tech into institutional space

Digital technologies have come to characterize the new era in development. Data are an even more significant factor of production now than in the past for socioeconomic development, where information technology and data science are playing key roles. The digital economy not only promotes the transformation and upgrade of traditional industries, accelerates the rise of emerging industries and changes lifestyles, but also helps reorganize the global factors of production, reshaping the global economic structure and changing the global competition landscape.

The strength of China's digital economy brings it opportunities to overtake its peers in corners in some sectors. However, huge challenges also exist, as many key technologies of the digital economy, such as high-end chips, industrial software, core components and algorithms, are controlled by some developed countries. Worse, some of these countries are weaponizing their technological advantages to suppress China's digital economy.

Given this context, the ability to innovate is very important and worthy of wholehearted efforts. As Joseph Schumpeter, an Austrian political economist who served as the country's finance minister in 1919, once said, innovation is the realization of a new set of factors or conditions of production. So, how can innovation play its role in driving the development of the digital economy?