Highlights of the Asian Digital Transformation Index report from the Economist Intelligence Unit
Released at the end of 2016, Connecting Capabilities: The Asian Digital Transformation Index is a report from The Economist Intelligence Unit (EIU), commissioned by Telstra. Here are some of the key highlights from the executive summary:
Singapore, South Korea and Japan lead the way: Developed economies generally fare better in the Index (Hong Kong is fourth and Taiwan is fifth) and lead their emerging market counterparts in the region on some key measures. The primary reason is that their digital infrastructure is at a more advanced stage, which organisations within those economies can leverage to their advantage in the global marketplace. Without digital infrastructure there cannot be advanced digital transformation, a point clearly acknowledged by survey participants.
The importance of human capital is evolving: South Korea and Japan lead the Asian Digital Transformation Index in this category, however, lower ranked countries are looking to catch up, including Singapore which is establishing programs to enhance computer science education in schools and bringing the elderly online. Bridging such digital divides is beneficial to a country’s economy, companies and for users.
Larger emerging markets need to catch up: Although China and India have surpassed the US with the most Internet users and are rapidly developing their technology eco-systems especially in major cities, both emerging markets face challenges in bringing their entire populations online in part due to uneven development and large geographies and hence face significant challenges when it comes to digital competitiveness on a national level.
Embracing disruption: Leading companies are now working with digital disruptors as opposed to trying to compete with them. It is a win-win situation: established companies receive technological know-how from innovative start-ups while disruptors can tap into existing customer bases and knowledge of older firms. Evolving technologies: Web portals and web forms still rule digital transformation efforts, however, changes are afoot. In the survey, most companies still rely on traditional technologies but over the next three years, usage of big data and analytics and the Internet of Things (IoT), is expected to rise. This is particularly true among leading companies, notably in the financial services industry.
Barriers towards digital transformation: Lack of finance is cited as the biggest obstacle overall. Digging deeper it is a bigger issue among smaller companies than larger ones. Among larger companies, a lack of strategy is the main issue, likely because management have money but don’t know how to spend it wisely. To support this point, the biggest hurdle (according to interviews conducted for this report) is changing the cultural mindset within organisations.
The full PDF version of the report is available here.