What does transformation and upgrading mean?

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

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.

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.

Nowadays, many places simply understand transformation and upgrading as improving research and development; 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.