Digital transformation in Asia - An overall view
Explore the rapid pace at which Asia-Pacific is leading the digital transformation (DT) process and the key strategies that will define future DT advances.?
Key takeaways
DT in Asia - A quick glance?
Since 2017, Asia has already been regarded as one of the fastest movers in global DT,? especially in major industries such as manufacturing, logistics, transportation, and energy. Very early on, Asian enterprises have acknowledged the need to see beyond cost and efficiency - they have started to develop core digital capabilities to guarantee long-term thriving.?
Then Covid-19 swept by. It created unprecedented disruptions, including in the DT landscape. Specifically, we have witnessed a significant increase in the importance of digital technologies in facilitating public services and fostering new customer interaction touchpoints.
As a result, DT has become a strong growth driver in Asia, especially for developing economies. In certain sectors, Asian countries are even already leading the race. For instance, the Philippines and Malaysia topped the table for the growth pace of e-commerce retail, reaching 25% and 23% per year respectively.?
DT in Asia is characterized by its remarkable pace recorded post-COVID and the growing popularity of smartphones.
First, the region’s economy has an impressive digitization speed - over 60 million people became online consumers during the Covid era. The majority of the region’s internet users have only become active recently - from 2015 to 2021, the number almost doubled from 260 million to 440 million. The surge creates a new dynamic digital landscape whose needs many tech giants can’t afford to ignore. For instance, almost 60% of global online retail sales are attributed to Asia. The diversity of digital services in Asia is also striking - from ride-sharing services, and food delivery, to e-commerce and exporting online labor.?
Second, smartphones pave the way. About two-thirds of the Asian population uses mobile services - with the fastest growth rates being observed in South and Southeast Asian countries. Countries with high smartphone penetration include Singapore, Thailand, and Malaysia. Interestingly, a report in 2019 by the Pew Research Center noted that Vietnam was the country with the highest percentage of adults owning a mobile phone. In addition, mobile data consumption in South and Southeast Asia is predicted to grow three-fold by 2025, reaching almost 30 GB per month per user.?
The three key strategies for DT in Asia
The 2022 report titled “Digital First Economy ” from Huawei revealed a shocking correlation: Every $1 of Information Communication Technology (ICT) investment yields $13 worth of GDP output.?
But how can Asian businesses and organizations derive such enormous value from their DT? Connectivity, Inclusiveness, and Green Transformation are the three keywords to ensure digital solutions yield tangible benefits for the Asian market.?
In the digital age, connectivity means the ability of people to communicate beyond geographical limitations. With the Internet and other digital means, everyone can reach out to each other almost instantly.?
Connectivity is considered an underlying fundament of economic progress . In Asia, where most economies are categorized as “emerging and developing ”, many people remain unconnected. The lack of connectivity is especially concerning in the current disruptive era, as it means lost education and job opportunities. Therefore, it can worsen the economic gaps and create an overall halt to regional development.
Let’s take Indonesia as an example. Indonesia is the world’s largest archipelago, so its geography poses a great challenge to building vital constructions and ensuring connectivity.?
This, however, can be resolved with digital infrastructure. One such solution is Huawei’s RuralStar. It leverages a 4G-based relay approach to transmit data without satellite and line-of-sight (LOS) constraints. The system also consists of simple-to-build nodes that can be powered by just six solar panels. It has already been launched in several rural areas in China and Ghana , providing rural coverage and allowing millions of people to enjoy broadband data services.?
The inclusiveness of a solution is its ability to address the unique needs of its target users and industry. The challenges faced by marketing executives, for instance, will be completely different from people managing the supply chain. Therefore, needless to say, inclusiveness enables the solution to yield practical values for its end users.?
Across Asia, many verticals have benefited from inclusive digital solutions designed specifically for their unique challenges and tasks.?
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First, let’s take a look at the field of accounting. In 2022, BlackLine conducted a global survey on visibility over cash flow, with respondents being C-suite executives and finance and accounting (F&A) professionals. Almost 40% of respondents from Singapore said their biggest challenge was identifying human errors in the financial close process at the end of each month. This is because the process involves matching and reconciling a large number of transactions across different data sources.?
However, this is changing thanks to innovative digital solutions. A company headquartered in Singapore claimed they had saved costs and boosted F&A efficiency since employing cloud-based software to handle tasks such as matching transactions and reconciling accounts. As a result, F&A professionals are able to dedicate their time and efforts to more value-added tasks, such as strategic counsel.?
DT also has taken place and driven wonderful changes in heavy industries - such as coal mining. In Laos, instead of risking their health in harsh and humid mines, workers in potash mining sites can now remotely monitor the mining process.
Another example is Vietnam, whose coal mining industry has been a major adopter of various DT innovations. In this landscape, digital solutions address challenges relating to complex geographical conditions and preventing gas explosions. The vast range of solutions designed specifically for coal mining include:?
Since the adoption of these technologies, Vietnam’s coal mining industry has witnessed remarkable growth in its coal output and, thus, profit.
Green transformation is defined as changing businesses (its process, product, operation, model, and culture) in a way that ensures sustainable resource utilization.
In Asia, many countries have already embarked on a new approach to energy consumption. A few examples include Singapore’s Green Plan 2030 , the Philippines’ plan to realize a 75% cut of its emissions by 2030, and South Korea’s 9th Basic Plan for Power Supply and Demand (which aims to increase the proportion of renewable energy sources in the country’s overall supply to 40%).
However, it is important to note that ensuring sustainable energy use cannot be solved solely by using renewable sources. These sources are intermittent - e.g. solar and wind energy, meaning they fluctuate and cannot guarantee a stable, consistent supply. Rather, stakeholders must leverage digital technologies in overseeing and managing modern energy systems.? Expected outputs are:
Across the Asia-Pacific region, there have been many successful use cases with measurable positive results. For example, a shopping mall in Bangkok, Thailand has a mounted solar farm that leverages AI to manage its electricity flow. The result? 4,000 tons of carbon emissions were cut and the cost of energy was lowered significantly.?
Closing Remarks
Asia is considered a highly potential environment for DT - “ripe with opportunities”, as noted by Simon Lin, Huawei’s President of Huawei Asia Pacific. DT has been a core factor that powers the post-Covid recovery of Asian countries. With many untapped regions and market niches and guided by a philosophy of “Connectivity, Inclusiveness, and Green transformation”, Asia’s DT journey has more wonders and accomplishments await.?
Digital Empowerment 101 is a newsletter created by GEM Corporation to share original thoughts and insights about digital transformation. It also serves as an active platform for open discussion about the power of modern technologies in enhancing business proficiency.?
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