Wu Jinglian gave a keynote speech at the forum. The first question we encounter is why we should position innovation and why our enterprise should innovate wholeheartedly. Its core problem is that we have been going on for 60 years and the original growth model has come to an end. The crux and root of various microeconomic and macroeconomic problems we are facing now lies in the growth model we have used in the past 60 years, which has brought us many problems and made it difficult for us to take a step forward. The mode of economic growth was first put forward in the 1960s, then it was called "growth mode", later it was called "economic development mode", and academically it was called "growth mode". This growth mode is good, the growth mode is good, and the economic development mode is good. Its core content is to rely on investment to drive growth and support growth. We introduced this growth model from the Soviet Union in the early days of the founding of the People's Republic of China, which supported China's industrialization, but it also brought many negative things. Since the 1960s, we have been trying to realize this mode change, but we have never succeeded. After the reform and opening-up, 198 1 the government work report approved by the National People's Congress described our future economic development policy. Its core is to change the growth achieved by investment and turn to the track of improving efficiency. However, due to institutional reasons, this change is very slow. Then, after the reform and opening up, we made up for its shortcomings in another way. This method is to use export demand to make up for the shortage of domestic demand and consumer demand caused by this growth model. This approach has achieved results for a period of time, especially after the exchange rate reform of 1994, and the export-oriented policy has played a very good role in making up for the lack of demand brought by investment. But at the beginning of this century, the problems brought by this compensatory export-oriented policy became more and more obvious. In fact, its positive effects are fading, while its negative effects are accumulating, so this problem has become more and more prominent in recent years. No matter from the micro-economy or macro-economy, the problem of accumulation has become a powerful obstacle to our further development, such as the depletion of resources and the destruction of the ecological environment until the investment rate continues to rise, which is unprecedented in China and not so high in the world. On the other hand, the investment rate is declining. The export-oriented policy we use to correct this problem or make up for this defect, on the one hand, its benefits are declining, on the other hand, its negative impact is becoming more and more serious. Its most important influence is that foreign exchange reserves are increasing because our export orientation is to make up for the shortage of domestic demand with export demand. There are more and more foreign exchange reserves, and its macroeconomic impact is currency overshoot. Now we have 3.2 trillion national foreign exchange reserves, which were bought with 25 trillion central bank currency. The central bank's currency is a high-energy currency, and the currency multiplier of China's central bank's currency is about 4, which means that the purchasing power of the currency created for 3.5 trillion foreign exchange reserves is about 100 trillion. This period of time 100 trillion shows that we have abundant funds, but after a period of lag, it shows that asset prices and real estate prices have soared, and after a period of time, it shows inflation. Therefore, these problems urge us to make up our minds and take effective measures to realize the transformation of economic growth mode. The change of growth mode was put forward in the sixth five-year plan and has been repeated since then. In the Ninth Five-Year Plan, two fundamental changes were formally put forward, one of which was the change of growth mode. The Tenth Five-Year Plan and the Eleventh Five-Year Plan are now the Twelfth Five-Year Plan and remain our main lines. It seems that its effect is not so obvious, and its explanation is becoming more and more complicated, but where it finally changes often becomes vague. Now everyone is talking about change from the press, from the classroom and at our cadre meeting. So where does the change come from? What should I transfer? There are too many kinds of sayings now. I think from an economic point of view, this thing should be relatively simple, that is, it is easy to explain it clearly with a production function, especially Solo's rewriting. This is the total output of a production function, which obviously realizes labor and capital. In the past, before 1950s, the explanation was that the output was due to the increase of capital and labor, but in our modern economics, this was the production function rewritten by Solow. Solow's research found that there was a factor in the economic growth of the United States in the 20th century that could not be explained by labor and capital. This factor is called "Solow residue A", Solow residue. Solow defines it as technological progress, and in our actual economic calculation work, this "Solow surplus A" is total factor productivity, which refers to TFB. In other words, the main source of modern economic growth is not from investment, but from the improvement of efficiency, which is the characteristic of modern economic growth model. Therefore, we must change the old growth model that relies on investment. Where should we go? Steering depends on efficiency improvement. What's the situation now? Before the reform, our economic growth mainly depended on investment, so there will be a situation after the Great Leap Forward. After the reform and opening up, there have indeed been new changes. A new change is that we still rely on investment and labor. It is due to the new resource input brought by reform and opening up. One of our growth factors is the industrialization of urban and rural isolation, so a lot of land resources and labor resources are idle or inefficient. The government has a lot of resources to invest in these years, such as land resources, which can be invested in the process of urbanization. In addition, because the demand for money will increase greatly in the process of marketization, issuing money in large quantities will not cause inflation. The government can issue a lot of money. In the past 30 years, we can see that the resources owned by the government, in particular, have greatly increased. The government has a lot of money and land. For a building like ours, we should say that we are a middle-income country. Why are there first-tier cities, second-tier cities and third-tier cities everywhere? This is because we have many resources to use. But now it's almost over, and the land there is extremely tight. Academician Shi Changxu, winner of last year's special international innovation award, said that there is a very good enterprise in Shenzhen that needs more than 20 mu of land, so it can be seen that this movable property has been dug away. So is money and capital. In 2009, the money in the hands of the government seemed limitless. With an investment of 4 trillion yuan and a loan of 10 trillion yuan, a high-speed rail construction cost more than 3 trillion yuan. Can you do it now? No, it is no longer "floating wealth". Therefore, we must be able to endure loneliness and concentrate on improving efficiency and competitiveness. You can't rely on floating wealth, go to the government to get a piece of land, and go to the government to get tens of millions or hundreds of millions of subsidies. It doesn't mean that our growth since the reform and opening up depends entirely on the input of resources. Since the reform and opening up, there is a big difference, that is, the contribution of efficiency improvement to our growth has greatly increased. But let's analyze it carefully. How did this efficiency improvement come from? Not by original innovation, but by the improvement of resource utilization efficiency after our reform and opening up, and by the introduction of equipment and ready-made technology from others in the middle of our opening up, the technological level of our backward manufacturing industry has been rapidly raised to the average or basic level of a developed country. This gap in technical level has been accumulated for hundreds of years, but our 30-year reform and opening-up policy is approaching soon. But it should be noted that the improvement of efficiency just now is due to the improvement of structure, introduction and structure. One is that the inefficient rural labor force has become a relatively efficient labor force in urban industry and commerce and non-agricultural industries, and the other is land, which has been idle or inefficient and has become a land use in cities. These two factors, one is because of structural changes in resource utilization, and the other is because of introduction. The efficiency improvement caused by this factor has also come to an end. For example, technology introduction, when our technical level is close to the general technical level of developed countries, it is not possible to rely on introduction at this time, but to rely on innovation. Therefore, the future must rely on original innovation. Original innovation does not mean starting from the basic point and zero point. But you always have to invent something, otherwise it will be difficult for you to get the efficiency improvement brought by technological progress in technology. So from the above, we should emphasize innovation. In the future, we can't say that we will lead the world in technological progress, but we have become a member of the first echelon. If you can't make original improvements, it will be difficult to be competitive in the world market, because other people's technologies are constantly improving. Since the previous year, from the central leadership to the party and government leaders at all levels, innovation has been emphasized, but some misunderstandings or misleading have also been found, that is, we should not think of revolutionary high-tech inventions at the mention of innovation, or replace all our original manufacturing industries with strategic emerging industries. When making the Eleventh Five-Year Plan, people think that there are several paths to improve efficiency and change the growth model, some of which are accepted by the public, but others are ignored. For example, it was put forward at that time, and later it has been emphasized that we should rely on the development of service industry to increase the proportion of service industry in the whole economic activities. The other is to develop strategic emerging industries. But at this time, it is often forgotten that the essential thing is to improve efficiency, which depends on "Solow surplus A", that is, to improve efficiency. The improvement of efficiency does not necessarily represent a revolutionary technological invention. Therefore, when the 11th Five-Year Plan and the 12th Five-Year Plan were formulated, another problem was actually raised, that is, the largest piece of our industrial structure was manufacturing. Should our processing and manufacturing industry be replaced or upgraded? Is this innovation also reflected in our original manufacturing industry? We should reflect, because as long as we can improve efficiency, no matter which industry is an important part of realizing the transformation of our economic growth model. So what are the characteristics of modern manufacturing and traditional manufacturing? That is, the added value of modern manufacturing industry is very high. Where does its added value come from? It is the two ends of the smile curve that Mr. Shi of Taiwan Province said. The front end is R&D RND, design and other activities, and the back end is channel management, brand marketing and after-sales service, including consumer after-sales service and financial after-sales service. Both ends are service activities, but only independent service enterprises are counted. The added value of service activities within the manufacturing industry is high, but it can't be counted, so if we aim at political achievements, we will ignore the manufacturing industry. The processing and manufacturing industry in our region is the largest part of the industry. How can we improve the added value of our current processing and manufacturing industry? It is a very important concept to improve its efficiency. Crucially, according to another Nobel Prize winner, he called "Solo surplus A" human capital, that is, a knowledgeable and skilled labor force. Some time ago, when I was in Guangdong, I raised this question. How to improve the knowledge and technical level of workers is a very serious task. I met Secretary Wang Yang at this year's Guangdong cadres' meeting, and he also emphasized to Guangdong cadres that Comrade Chen Qingtai's opinions are very important to our region. Not only technological innovation, but also institutional innovation, management innovation and business model innovation are important innovations. As long as we can improve efficiency, not much, not high or low, as long as we can improve efficiency, increase added value and improve profitability, we will realize the transformation of our growth model. Therefore, our enterprises should seize this point. No matter what field you are in, I have repeatedly quoted a sentence from Professor Bosch of the Council of Economic Advisers of the President of the United States when President Reagan was here these two days. Whether it's silicon chips or potato chips, as long as it can make money, it's a good film. Undoubtedly, the government has played a very important role in the reform and development, especially in China, where the government still has a lot of resources. However, over the past year or so, the role of the government in transforming the mode of economic development has been strengthened and some results have been achieved. But the efficiency is too low and the cost is too high. What's the problem here? That is, according to the guiding ideology determined by the science and technology conference, enterprises are the main body of technological innovation, not the government. Many of our cadres also said that enterprises are the main body, but the government is the protagonist of enterprises, so there will be problems. I think the main responsibility of the government is to build a good stage for enterprises and create good operating conditions. This operating condition has three basic contents, the first is to provide pressure for innovation, the second is to provide power for innovation, and the third is to provide capacity for innovation. In the past, the government always supported the best enterprises it recognized, which was called "paternalism". In fact, this is harmful to enterprises. First, it is harmful to this enterprise. The second is to give an enterprise a tilt, which actually hits other enterprises. Maybe you helped one enterprise, but you killed hundreds of enterprises. The second is motivation. Where does the motivation come from? Nobel Prize winner North has a very incisive saying. What is the key point of motivation? The key point is to make the contribution of individuals or enterprises to society consistent with their returns. If not, then enterprises or individuals will go to the government, because the government has resources, which destroys the incentive mechanism. The third is to make him capable, and he is responsible for obtaining resources. These are basically provided by the market. To measure all the measures, the government must be clear about what it can and cannot do. Finally, I'd like to use a passage from Professor Zhou Qiren to give advice to government officials. In order to prepare for this party congress, the Guangdong Provincial Party Committee put forward the central slogan of "persisting in the direction of market economy reform and realizing transformation and upgrading". The provincial party committee held many symposiums in preparation for the party congress, including some professors in Beijing, and I participated in them twice. On one occasion, I heard Professor Zhou Qiren from Peking University give a little suggestion to Secretary Wang Yang, which was very incisive and popular. He said: Why is the government's ability limited? The reason is that we are exploring the unknown, and the government has no ability to know what direction it will develop in the future, absolutely not. Therefore, the government should specify an industrial development direction and a technical route, and the probability of failure is almost 100%. The only way is to let thousands of enterprises and millions of people explore.