8 Asian cities named in EIU’s Top 10 digital environment business confidence ranking
According to the Economist Intelligence Unit’s (EIU) Connecting Commerce report, 8 Asian cities made it to the top 10 list in business confidence in digital environment.
The EIU report was commissioned by Telstra. For the fourth year, the report gauges business confidence in the digital environment at a city level, as compared to most research that rank digital environments on a state level.
Its Digital Cities Barometer ranked 45 cities across five key categories relevant to business performance: (1) innovation and entrepreneurship, (2) financial environment, (3) people and skills, (4) development of new technologies, and (5) ICT infrastructure.
The report assessed the confidence of over 2,600 business executives in their city’s environment and its conduciveness to supporting the digital ambitions of companies. It confirms the link between companies thriving digital economies and the city environment that they locate in the location of their business ecosystem. It provides unique insight into the global digital transformation landscape, helping people understand how a city can support an organisation’s digital transformation efforts.
The following are its major findings:
Confidence in the digital environment is high in Asia’s emerging market cities
Confidence in the digital environment is high in Asia’s emerging market cities with Asian cities occupying 8 out of the top 10 rankings. The 8 cities are: Bangalore (1st), Mumbai (3rd), New Delhi (4th), Beijing (5th), Manila (6th), Shanghai (7th), and Jakarta (8th).
However, developed cities in Asia have recorded lower confidence. This is not to say that developed cities such as Hong Kong and Tokyo are not providing a conducive environment for business digital transformation. Rather, the high confidence in developing cities is caused by the general optimism and enthusiasm towards the growth potentials in emerging market cities.
Skill gaps as a key challenge in digital transformation
A key finding from the report is that skill gaps is among the two biggest challenges that companies face in their digital transformation, along with financial constraints. This indicates the local educational institutions must make more efforts in nurturing and supplying digital talents.
In terms of skill set, digital security and advanced data analytics are identified as the two most critical skills needed for transformation, with softer skills such as networking also a top priority.
The role of city governments and authorities
According to the EIU study, city governments and authorities directly influence digital transformation in the private sector. Firms leverage open data made available by governments to provide new and improved services to their customers. Nearly 70% of the surveyed executives consider open data to be important to their businesses.
Governments also play the role of a facilitator of information sharing on good cybersecurity practices. This helps to address cybersecurity concerns in the business sector, particularly with governments actively roll out smart city initiatives. 63% of respondents say local authorities have consulted them on cybersecurity issues at least occasionally in the past two years.
ICT infrastructure build by the governments shape digital business environments. Shortcomings in ICT infrastructure is named as a serious obstacle to achieving their digital ambitions. Almost half of the survey sample believe that the city their firms are in is ineffective in providing ICT infrastructure that meets firms’ digital transformation needs.
There is an observation that digital transformations create new roles. In recent years, the role of Chief Technology Officer (CTO) has been created, usually sitting alongside the chief Information Officer (CIO), to look after the city government’s own technology infrastructure and often leads its Internet of Things (IoT) initiatives. Chief Digital Officers (CDOs) are also beginning to emerge to spearhead cities’ digital transformation efforts
Lastly, the report also highlights that the success of a digital economy relies on the strength and vibrancy of its digital business ecosystem. A strong digital economy ecosystem consists of support from local authorities, market potentials, access to digital talent, the possibility of digital partnership within the local ecosystem etc. Companies participate actively in formal and informal local digital communities by turn to innovation labs and universities for ideas, working with incubators and accelerators, then innovations thrive with government support and conducive policies, eventually forming a strong digital economy.