(Yicai) Oct. 12 -- Executives from leading global firms have offered suggestions for improving Shanghai’s service sector, with a focus on using artificial intelligence to boost integration between different commercial areas.

At the 38th International Business Leaders’ Advisory Council for the Mayor of Shanghai yesterday, 42 chairs and chief executive officers of multinationals from 14 countries offered suggestions on the theme “Promote the Innovative Development of the Service Sector in Shanghai.”

A number of them said that the eastern metropolis should better leverage AI to further integrate services with manufacturing and consumption scenarios, as this will help to nurture more growth engines.

“Shanghai should make use of its distinctive opportunities to build itself into a model for AI in professional services, standing alongside New York, London and Singapore when the city combines one of the world's deepest real economies, China's strongest AI ecosystem, and Asia's most complete cluster of international professional services,” said Mohamed Kande, chairman of London-based consulting firm PricewaterhouseCoopers.

New possibilities have opened up for intelligent mechanics, smart manufacturing, warehousing and transportation amid the global AI boom, he said, and to ride this tide Shanghai should make more efforts to connect technology, research and capital with international service providers so that difficulties in the real economy can be addressed.

Combining high-quality medical data with AI and robotics can lead to new frontiers in medical care, said Gary S. Guthart, executive chairman of US surgical robot developer Intuitive Surgical. Shanghai could be part of this transformation by piloting the development of high-quality datasets for robot-assisted surgeries, experimenting with new approaches for secure sharing of medical data, and building a "Shanghai model" for the responsible use of medical data that can be replicated nationwide, he noted.

AI can reshape the value chain, empower talent and renovate commercial paradigms, said Jean-Paul Agon, chairman of French beauty giant L’Oreal Group. The new technology can provide consumers with tailor-made products by connecting the online and offline shopping experiences, he said, and another benefit is that manufacturing will become more sustainable because AI will make it more flexible and customized.

The Shanghai Municipal Government released the 15th Five-Year Plan for development of the service sector in June. The plan set a target of raising the added value of the city’s service sector from CNY4.5 trillion (USD672.3 billion) last year to around CNY6 trillion by 2030, with an average annual growth rate of no less than 5.5 percent.

Shanghai has been optimizing the structure of its service sector, Mayor Zhu Zhongming pointed out at the IBLAC meeting, and the modern service sector which features high added value is growing rapidly.

The financial industry accounted for 17.8 percent of the city’s gross domestic product in the first half of this year, making it the largest pillar industry in the service sector, but there has been such rapid growth in the information service industry that it now ranks second, Zhu noted. 

The proportion of information services in the city’s GDP rose from 7.1 percent in 2020 to 13.8 percent in the first half of this year, Zhu said, with notable progress in intelligent computing cloud services, integrated circuit design, and internet platforms.

AI, IC, and biomedicine are considered to be the three leading industries in Shanghai. As of the end of last year, there were 394 large AI companies in the city, and the AI industry’s scale exceeded CNY637 billion (USD95.2 billion), up nearly 40 percent from the previous year, according to official statistics.

Initiated in 1989, the IBLAC has become a key think tank for Shanghai mayors, soliciting suggestions from top executives and industry experts to help advance the city’s development and opening-up. Business leaders from 11 Chinese private enterprises also attended this year’s meeting.

Editors: Dou Shicong, Tom Litting