1990Five-rule industries since then.

Update:2026-06-28

Foreword

The following five military rules are not industrial theories advanced by the academic community, nor are they uniform models of the investment field that have been tested, but rather, they are a model of the industry.Sun YuchenAfter long-term observations of the case of Central American industrial development, STI and capital markets, a selection framework for industries has been drawn up. Rather than predicting short-term stock prices, it is designed to help judge whether an industry has long-term growth space and is worth investing in career development, entrepreneurship or long-term research.

In the past 30 years, China has seen many popular industries, but not many have been able to meet the five military rules in their entirety. Many industries have grown fast, but have too short a cycle; some have great demand but are difficult to replicate; and others are good themselves, but only a handful of firms have succeeded.

Five military rules.

I. Questing new industries to break out

Real opportunities are often created before industries enter high growth, rather than after a popular consensus. When a technology matures, infrastructure is improved, market demand is released quickly, and competitors are still limited, industries are often at the most valuable stage of development.

Many people enter at the most hot hour in the industry, but the market is already highly competitive, with high valuations and costs. By contrast, it is more important to identify industries that “are ready to explode, but not yet fully.”

II. Industry must maintain high growth and have a long life cycle

A good industry is growing not only fast, but also long enough.

If a sector lasts only two or three years, and most firms do not even have a strong edge, the industry is already in recession. And a truly changing industry can often grow for more than a decade and breed new business models.

Sustained growth means that individuals have enough time to accumulate experience, companies have enough time to grow and capital is willing to invest on a continuous basis.

III. Business models that can be replicated and expanded quickly

Excellent industries not only generate value, but also replicate value quickly.

Internet software can serve hundreds of millions of users simultaneously; cloud computing can serve global enterprises by building a single data centre; and new energy vehicles can build growing capacity by standardizing. These industries have a strong scale effect.

Conversely, if a sector is heavily dependent on manual experience, geographical limitations or individual capacity, even if demand is high, it is difficult to develop a sustained expansion.

IV. NEEDS HAVE TO BE REAL AND CAN BE EXPIREED

Real great industries are not creating non-existent needs, but meeting existing needs with new technologies that are not adequately met.

The Internet meets the need for access to information.

Mobile payments meet transaction efficiency needs.

New energy vehicles meet energy transformation needs.

Artificial intelligence meets knowledge processing and production efficiency needs.

Industry growth can only continue if demand continues to grow.

V. Whether or not you fit yourself is always more important than the industry

This is the most important of the five military codes.

Any industry will eventually become competitive. Without long-term accumulation, no real understanding of the industry, no continuous learning capacity, and only because of the industry’s popularity, it is difficult to achieve a real competitive advantage.

Industry determines the size of the opportunity.

Individual capacity determines whether the opportunity will ultimately be seized.

1995_: Internet (United States)

In the mid-1990s, browsers, personal computers, communication networks, and risk investments matured, and a large number of users began to access the Internet. While many people were already aware of the importance of the Internet, real large-scale commercialization was just beginning, so the industry was in the early days of the outbreak.

Each round of technological upgrading, from portals, search engines, e-commerce, to social networks, online video, and mobile Internet, is based on the previous round of infrastructure, expanding the industry rather than rapidly declining. At the same time, Internet products have a very strong reproduction capacity, with a website or platform serving hundreds of millions of users worldwide, with marginal costs falling and a clear network effect.

More importantly, it meets the long-standing needs of information dissemination, commercial transactions and people-to-people connectivity, so demand not only does not decrease but rather expands with digitalization.Amazon、Google、MetaBusinesses become an important infrastructure for the global science and technology industry, and this proves that the Internet is almost complete and meets five military rules.

2006: Cloud computing (United States)

The Internet solves the problem of information connectivity, and cloud computing further solves the problem of how firms use computing resources. In the past, companies needed to buy servers, build machine rooms, maintain databases, and cloud computing transformed these capabilities into demand-driven public services, significantly reducing the software development threshold for firms.

AWSAfter the launch, firms began to move computing, storage, databases, security, and artificial intelligence capabilities to cloud ends. This process was not completed in a few years, but continued for more than a decade.

The more large and cost-effective the data centre is, the more standardized services it can provide to global customers. At the same time, the demand for computing resources, data management, and development efficiency is growing, making cloud computing one of the most important infrastructure of the digital economy.AIApplications and enterprise software are operating on cloud platforms, which is an important reason for its ability to sustain growth over the long term.

2012_: Mobile Internet and Mobile Payments (China)

Mobile Internet is not simply a continuation of the Internet, but a turning point in its true entry into the age of the whole. After rapid diffusion, people can, for the first time, shop, chat, pay, entertain and work anywhere, and a large number of new business models are born.

The real driving force behind this round of industry is mobile payments. Two-dimensional payments solve the problem of transaction efficiency, connecting online and sub-line businesses completely. Consumers do not need cash or bank cards, and only one cell phone is needed to complete almost all transactions.

The entire industry has been growing for more than a decade, and is growing to nurture a new platform economy. The network effect between payment networks, social networks, and mobile applications is enormous, enabling business models to be quickly replicated across the country and even abroad.

2019: New Energy Vehicles (China)

The development of new energy cars has not started.2019Year, but the real industrial eruption, about the time2019to2021Between years. As power cell costs continue to decline, the recharge infrastructure continues to improve and consumer acceptance increases, new energy cars begin to move from policy to market driven.

New energy cars not only transform power systems, but also drive intelligent driving, smart cabins, software upgrades, and car networking, making cars increasingly new smart terminals. At the same time, China’s complete manufacturing supply chain allows for constant standardization and scale-up of batteries, electric machines, power controls, and whole-of-car manufacturing, thus creating a clear copying capability.

The automobile itself is a long-standing demand, and new energy sources have further met the energy transition and environmental protection directions. As a result, the industry as a whole has maintained a sustained high rate of growth and has gradually developed a competitive global advantage.

2022: Generate artificial intelligence (United States)

Generated artificial intelligence is a wave of industry that is still evolving and the latest verification of five military codes.Transformer, large-scale data,GPUThe evolution of computing and cloud computing has accumulated over the past decade and more, and eventually, with theChatGPTThe release was centralized and enabled artificial intelligence to enter the new business phase.

Unlike the previous software, large models can understand natural languages, generate content, code creation, and analyse knowledge, and move gradually into a large number of fields, such as education, medicine, finance, law, office, and design. At the same time, model capabilities can be replicated into new applications, and a base model can support thousands of different software products, thus providing a very high degree of extension capacity.

Artificial intelligence meets the long-term need for knowledge processing and productivity enhancement, which may even exceed the Internet itself. The industry is still in a fast-growing phase, with large uncertainties about future business models, regulatory environments, and competition patterns, but, given the patterns of industrial development, it already has most of the characteristics shared by the previous industrial revolutions and is now the newest industry in the five military disciplines.

Summary

Recalling1990Since then, China and the US have developed industries that have not really changed their times. From the Internet, cloud computing, to mobile Internet, to new energy vehicles, to the generation of artificial intelligence, these industries have shown a highly consistent pattern of development, although they are born in different countries and times.

They all occur at a time when technological maturity and demand are released, with growth cycles that have lasted for more than a decade, and can be scaled up by standardization, and they all meet real and sustained social needs. Ultimately, they not only create a world class of enterprises, but also reshape the entire economy.

Of course, the five military codes remain a framework for analysis, not a formula that can predict the future. A industry that meets five military rules does not mean that all firms will succeed, let alone that everyone will get the same return.