Lessons from Asia’s Digital Transformation
A look inside the impressive $1.16 Trillion Digital Transformation
Asia Pacific, which includes the populous countries of India and China, appears set to enjoy tremendous growth over the next few years. By 2021, the region’s GDP will grow by US$32 trillion, and roughly 60% of total GDP will come from digital products. That’s impressive, but given the populations of some of the countries involved and the industries that already exist there, it’s not entirely shocking. What is surprising, though, is the effect digital transformation will have, which is predicted to give the region’s GDP a further $1.16 trillion boost.
That’s a lot of growth in a relatively short amount of time, and though China and India will play an undeniable part, a lot of this revenue growth will stem from Indonesia, Thailand, Singapore, Vietnam, Malaysia and the Philippines’ decision to embrace technology.
So what’s the secret behind this digital success story? Let’s answer that by digging deeper into the details of Asia’s digital transformation.
Embracing a Digital Future, Not Just Technology
When Microsoft commissioned IDC to study Asia Pacific economies, it surveyed 1,560 respondents in 15 countries. These people came from middle-sized and large companies, across different industries like finance, healthcare, retail and education. Looking at the information provided, IDC identified two distinct types of organizations, “Leaders” and “Followers”:
● Leaders make up only 7% of all organizations surveyed. They have implemented digital strategies in the workplace and see 20–30% greater performance in every category, from profits to productivity.
● Followers make up the remaining 93% of organizations surveyed. They also see improvements thanks to digital technology, but less so than Leaders—only 15–20%.
Both groups are growing by embracing digital technology—so what’s the key difference between the two? To put it simply, Leaders envision a digital future, place technology at the heart of their businesses and build comprehensive strategies that center around their digital-forward goals. By contrast, Followers only adopt technology to augment their existing processes. When it comes to that $1.16 trillion boost to GDP, Leaders are sure to enjoy a much greater chunk of it.
The Takeaway: Embracing technology in the workplace has huge potential to improve profit margins, productivity, customer retention and more. In order to reap all the benefits, though, companies must fully incorporate digital solutions into the workplace. It comes down to figuring out what the digital future looks like for your particular business and industry, and structuring everything around that. In other words, technology shouldn’t play a supplemental role—it should sit at the core of the business.
Empowering Others With Technology
Asia’s digital transformation has proven that true digital transformation requires skills training, enabling younger generations to utilize technology in ways previous generations never could have imagined. In many Asia Pacific economies, technology is being embraced as a way to improve the country’s infrastructure and unemployment rate. It’s this mentality that’s helping Microsoft lead digital literacy efforts in countries like Nepal, and it’s the reason digital transformation in Asia Pacific is gaining so much traction. In cases like this, equipping youth and employees with digital skills creates a future that would have otherwise been impossible. But it’s not just developing countries that need to embrace this tech-first mentality. Sure, new technology can have a quicker and more obvious impact in developing regions, but every country (and business) in the world should be prioritizing technology. By adopting this transformative mindset, all businesses and organizations can take full advantage of the future’s digital possibilities.
The Takeaway: Technology has the power to greatly improve many business processes, but companies need to remember that people are required to drive digital transformation. So, rather than just investing in the latest digital tools, we must also invest in providing relevant skills training and guidance. A great piece of technology is often only as effective as the person using it.
Helping Humans Work with Machines and AI
When it comes to machine learning and AI, many people are concerned that automation will become the norm and jobs will disappear because of it. What we can learn from Asia’s success, however, is that companies should be more focused on encouraging their employees to work with technology. According to Thomas Jenewin of SAP, “only 5% of jobs can be fully automated, leaving 95% of jobs in need of people who can cope with the changes brought on by technology.” Rather than fearing an automated future, businesses in Asia are reaping the benefits AI can bring by imagining a different business model, one that invests in both digital skills training and machine learning to improve overall results.
For instance, the 365mc Hospital in South Korea utilizes machine learning and data to guide surgeons through precise surgical procedures. With the surgeon’s skills and practice, plus the higher accuracy provided by AI, the hospital can stretch the boundaries of medical excellence. Furthermore, it hopes to sell its machine-learning technology to other hospitals—a new business model that could bring in even more revenue.
The Takeaway: Remaining open to unique digital possibilities—and using machines to increase human capital—is key to success. Instead of replacing human jobs, AI has the potential to improve performance (and increase revenue) in highly technical industries and help increase human abilities to previously impossible levels.
The Role of L&D in Digital Transformation
For a digital transformation to work, there are three tenets that need to be accepted:
● Business leaders must embrace a future that’s centered around digital technology.
● Digital skills training should be an essential part of a company’s business strategy.
● Organizations need to work with AI and machine learning, while never abandoning a human-centered approach to business.
Humans will remain at the center of digital transformation. As such, tech-focused business strategies should emphasize human capital and training. Just as Asia Pacific countries prioritize digital skills training, organizational leaders worldwide (especially those in HR and L&D) need to invest in training their employees to adopt new technologies. The world is already well on its way to a digital future—like the Leaders identified in Microsoft’s survey, companies that are willing to change from the inside out will enjoy the brightest future and the biggest boost in revenue.
How is digital transformation changing the L&D landscape? Download our white paper Think User Centric.