What does transformation and upgrading mean? What is transformation and upgrading?

1. The concept of transformation and upgrading is composed of the words "transformation" and "upgrading".

2. The former has two meanings: one is the transformation of economic system, which changes the allocation of resources from government-led to market-determined; Second, the transformation of economic development mode, from extensive development mode to scientific development and intensive development.

3. The latter has four meanings: first, product upgrading, through innovation, let products with better functions replace the original products; Second, the process is upgraded, and the production process with higher performance and efficiency replaces the original old process; Third, functional upgrading, that is, upgrading to both ends of the smile curve, from substantive processing, manufacturing, assembly and production activities to non-physical R&D, design and brand, marketing and network activities; The fourth is the upgrading of industrial chain, from low-level chain division of labor to higher-level industrial chain division of labor.

4. Nowadays, many places simply understand transformation and upgrading as improving R&; D as a percentage of GDP, or as a percentage of strategic emerging industries. This is extremely harmful. The former increases investment and waste, while the latter is losing our traditional industrial advantages.