Globally, 68% of employers anticipate a greater spend on L&D in the future. However, this picture is far from uniform – and Asian countries are starting to dominate in the race for digital transformation. This week, we’ll focus on what you could learn from the leaders of Digital Transformation in Asia.
Digital transformation is sweeping the globe. Across the world, employers are racing to upskill their workforce.
Compliance learning provider Kineo recently surveyed 6500 employees and 1300 employers across 13 international markets, and found that a significant 92% of Indian employers predicted a net increase in L&D investment in the next 12 months. This stands in stark contrast to the US and the UK, in which only 64% and 54% of employers respectively plan to invest in L&D.
In the same report, UK employers cite digital transformation (42%) and economic pressures (40%) as the two main drivers for organisational learning. In Asia, however, the picture is slightly different, with automation and AI as the main driver for 58% of employers in India, and 42% of employers in Malaysia focused on dealing with an intergenerational workforce.
Digital innovation in Asia
Asia is arguably the hottest region in the world for e-commerce, search, social networking, gaming, and ride sharing. Companies in the region are embracing digital transformation, and building some of the world’s biggest tech giants in the process.
China’s great firewall has created an environment in which Chinese tech companies such as Tencent, Baidu, and Alibaba have been allowed to flourish – and this has created a breeding ground for innovation. For example, WeChat (Tencent’s popular chat service) allows you to do your banking, shop online, get a cab, and message your friends – all in one place. The “super app” now has 700 million users in China.
In Vietnam, Asia Commercial Bank is leveraging cloud, internet of things (IoT) and AI to transform its digital banking. Meanwhile, Japan's Mitsubishi Electric has enjoyed an 85% reduction in floor space thanks to the organisation’s use of AI, IoT, SaaS and PaaS solutions.
The ride-hailing app Grab recently became Southeast Asia’s first $10 billion “decacorn”, and have expanded to offer everything from food delivery to financial services. Using an AI platform, Grab users can submit identification documents using their mobile devices. As of today, the app has around 150 million users.
Leaders in Digital Transformation
According Alan Lau and Gregor Theisen, co-leaders of Digital McKinsey in Asia, a few factors make the impact of digital more pronounced than in other markets – including social penetration, consumers’ openness to new technologies and the mobile Internet, and willingness by companies to innovate.
In 2019, Singapore retained its top spot in the The Economist’s “Asian Digital Transformation Index”, followed by South Korea, Japan, Hong Kong, Taiwan, Malaysia, China, Thailand, India and the Philippines. In the survey, 53% of Singaporean executives said their business unit utilised analytics tools to some extent, while 47% said their unit uses embedded sensors (the core of the Internet of Things) in their products or processes.
Source: The Economist
McKinsey’s Alan Lau is especially interested in China, Indonesia, and India, arguing that these are “the markets that are really pushing the boundary and innovating the most.”
His interest is warranted: India has a population of over 1.2 billion, as well as most of the digital talent in the world – numbering in the hundreds of thousands or even millions. This, talent, is perhaps the most key differentiator between the Asian market and the rest of the world, where digital expertise is in short supply.
Asian leaders are investing in digital transformation
Overall, technology adoption is expected to increase rapidly across Asia. Organisations in the Asia Pacific (APAC) are forecasted to spend nearly $375.8 billion on digital transformation this year, according to the IDC. Investments in technology are expected to accelerate quickly, achieving a five-year compound annual growth rate of 17.4% between 2017-2022.
However, the Asian market is far from uniform – and different countries are facing different challenges. For example, Japan is a leading innovator, and home to tech giants such Sony, Mitsubishi and Toshiba. These companies have been around for decades – a market advantage that comes with its own problems. “Legacy IT issues in Japan are probably one of the most challenging as we look across Asian markets,” Alan Lau comments.
To account for this market diversity, Gregor Theisen argues that we must distinguish between “emerging Asia” from “mature Asia”. The latter category face many of the same challenges as American or European companies: they have traditional IT systems that need to be redesigned, or fifty years’ worth of data to organise.
Looking at “emerging Asia”, however, the challenge is quite different: these organisations only have a recent history of significant growth, and therefore don’t struggle with legacy IT. “That helps them significantly to leapfrog and embark on a digital transformation journey,” Theisen comments.
Most of the Index countries have one challenge in common: building talent pools with advanced digital skills – a growing issue which the rest of the world must also face.
“Government and enterprises in the region are understanding the value of what these new technologies bring to operational activities,” said Ashutosh Bisht, Senior Research Manager for IDC’s Customer Insights & Analysis Group. “They are also harnessing the potential of a lot of initiatives being launched to make the workforce well versed. Upskilling and future-proofing the workforce are on top of employers and the government’s agenda.”
Ready to invest in Digital Transformation?
At Circus Street, we help organisations get Digital Transformation right from Day 1. As a global online learning business, we work with organisations all over the world – including Asia – to help navigate the uncertainties of technology-driven future by building their digital capabilities.
We're encouraging global organisations to break down silos, and work together in addressing the digital skills gap. We do this by helping every person in the business to be educated on the key aspects of digital. This, in turn, builds the foundation on which the whole organisation can continue on your journey towards digital transformation.
To find out how Circus Street has empowered organisations by building their digital capability, see our testimonials page. Or sign up for a free trial of our lessons to see how we can help drive business transformation in your business.