Speaking at the World Economic Forum in Davos, Switzerland, Jack Ma, executive chairman of the Alibaba group, shared his visions on how Alibaba is now a data company, not an e-Commerce company, how its anti-counterfeiting AI is now being used for credit scoring and even rating potential dates. However, on a more serious note, he blasted the US for decades of failed, centralized globalisation where only Wall Street benefited. He added that Donald Trump was committed to fixing globalization and making it work for all.
Ma recently met with President-Elect Donald Trump where he said the two talked about small business and agriculture and how they can bring small businesses in America to sell to China and Asia through the Alibaba network. He said that they did not debate accusations of China being a currency manipulator but rather the two agreed on helping farmers in the American mid-west export to China.
When Ma graduated 30 years ago, the US had a plan. He said it was about outsourcing manufacturing to Mexico and China; about outsourcing services to India. The Americans said that they wanted to control the IP and the brand. This was a great strategy and the American companies made millions and millions of dollars while creating lower-end jobs for the rest of the world.
In the past 30 years, IBM, Cisco and Microsoft have made tons of money, more than the four largest banks in China, more than China Mobile and China Unicom. But where did that money go?
Ma said it was war. In the past 30 years, the United States has spent $14.2 trillion on 13 wars rather than spending it on infrastructure and helping the blue and white collar workers.
“No matter the strategic good, you’re supposed to spend money on your own people,” he said.
Rather than General Motors or Ford or, more recently, Silicon Valley, all the money went to Wall Street. In 2008, it culminated in a financial crisis that wiped out $19.2 trillion and destroyed 34 million jobs.
“What if that money was spent on the US mid-west? It’s not that the other countries stole jobs from you guys, but you did not distribute the money,” he said.
Ma also said that Trump wants to fix globalization and wants it to be inclusive globalization. 30 years ago globalization was controlled by 60,000 large companies. 100 years ago it was controlled by several kings and emperors. What if in the next 30 years globalization can be about 20 million small businesses doing cross-border business?
Jack Ma has been a proponent of the EWTP, the electronic world trade platform. He said that the world trade organization was amazing in that you could put 200 government officials in a room and they actually agreed on something, but the rules for business should be decided by business people where they sit down, negotiate and then get endorsement and backing from government.
Alibaba has been using artificial intelligence and big data to detect counterfeit goods for ten years. Eight years ago Ma said that Alibaba should not be an e-commerce company but a data company. It has data from consumers, manufacturers, logistics companies and actual transactions. This gave rise to its Sesame credit scoring system.
Alibaba used that system to provide credit scoring for small businesses, providing them with loans. Over the last five years they have extended over five million loans with what it calls the 3-1-0 system. Sesame takes three minutes to decide, one minute to transfer the money and with zero human touch.
Today, Ma said that Sesame is now even part of the dating scene. A potential mother-in-law would demand to see her daughter’s boyfriend’s Sesame card before allowing them to date. Sesame has also been used extensively in renting apartments and vehicles. If anyone buys or sells fake products, this would be shown on their Sesame card.
Finally, Ma told the forum of his 30-30-30 vision. Any government needs to pay attention to nature of the technological revolutions. The first 20 years is about the tech company but the next 30 years is about the implementation of the technology. The first 20 years was all about Amazon, Ebay, Alibaba and Google, but the next 30 years will be about how the technology will be inclusive for the people.
Governments need to listen to people who are 30 years and younger; the Internet generation. It is this generation who will change the world and build the new world.
Finally governments need to focus on companies with fewer than 30 employees. 30 years, 30 years old and 30 employees, that will make the world much better, he summarised.