Why Asian Economies are Leading the Digital Transformation Race
The digital revolution is helping companies and entrepreneurs to thrive
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From 4G mobile technology to smart manufacturing technologies and fibre broadband, Asian countries are leaving no stone unturned to ensure that they are creating the right environment for businesses and entrepreneurs to thrive.
And leading the charge is Singapore. According to the 2018 Asian Digital Transformation Index by the Economist Intelligence Unit (a British business within the Economist Group providing forecasting and advisory services through research and analysis), the island nation has surpassed the US when it comes to providing support for national digital transformation, and Japan is getting closer to the UK.
The Asian Digital Transformation Index 2018, the objective of which is to compare digital transformation progress of countries, says the gap between Asia and the West has reduced since 2016.
In the Index, Singapore is followed by Hong Kong, Japan, South Korea and Taiwan, in that order; while Malaysia takes the sixth position, followed by India, Mainland China, Thailand, Indonesia and the Philippines.
Referring to the key technology enablers of digital transformation, the whitepaper, published by the Unit, reads, "Apart from the compact cities of Singapore and Hong Kong, mainland China and Japan excel in fibre take-up. 5G plans are well-advanced in South Korea and Singapore, while South Korea, mainland China and Japan are forging ahead with AI research and development."
Had the US, UK and Australia been included in the Index, the report says, Singapore would still be the overall leader. "The region's other high-income economies, and in some cases mainland China, compare favourably with the three western countries in several areas. One is their commitment to long-term digital strategies, the implementation of which lags progress in infrastructure indicators such as 4G mobile coverage, fibre deployment and average broadband speeds, and the other is in their plans for advancing 5G and artificial intelligence (AI)," it says.
Talk about the leader
Besides the availability of reliable, fast and affordable digital connectivity, Singapore's performance also has to do with its continuing clarity of digital vision and consistent implementation of ICT development plans. This reflects in areas such as the fibre network rollout to reach businesses and homes, the goals of which were set out in one of the nation's past "ICT master plans". Singapore has the highest fibre-to-the-home (FTTH) and fibre-to-the-building (FTTB) take-up rates of the Index economies, the report notes.
India and Japan, meanwhile, have shown the most improvement in digital infrastructure, moving up four positions and two positions in rank since 2016, respectively. "For India, this is partly a reflection of rising investment in ICT infrastructure: according to the International Telecommunications Union, telecoms investment rose from 0.4 per cent of GDP in 2015 to 1 per cent in 2017—the highest figure of the Index economies. Some of this spending has gone towards increasing coverage of 4G mobile networks, which now reaches 86 per cent of the population, compared with less than 20 per cent three years ago," the report says.
Accelerated adoption of mobile broadband services and effective implementation of government policy have resulted in improvement in Japan.
The report concludes by pointing out that the success of digital transformation relies on much more than just access to technology and talented specialists. "It hinges on changing employee mindsets and organisational culture—progress in which is difficult to assess in a benchmarking index."