Which Asian economies are winning the digital transformation race?

One of the most striking factors in Asia’s tremendous growth over the past few decades is how the digital revolution has enabled businesses to thrive. As a professional based in Hong Kong and working across the region’s markets, I remain keenly aware of how closely a business’ fortune is pegged to the digital readiness around it. And it’s become clear during my travels that not all digital environments are equal.

As part of new global research commissioned by Telstra, The EIU has released the second edition of the Asian Digital Transformation Index, a ranking of 11 markets in the region plus three global comparators on 20 indicators covering digital infrastructure, human capital and industry connectedness. Through commissioning this research we aim to increase the understanding of digital capabilities and challenges across the region, as well as the digital environment of each economy.

While the research found established technology hubs like Singapore and Japan continue to uphold their reputation for digital maturity, it’s encouraging to observe economies like Taiwan and India making meaningful strides in fulfilling their digital potential.

Predictably, Singapore topped the Index overall for a second time driven largely by its clear digital vision and successful ICT infrastructure strategy – including 5G development plans and its fibre network rollout. While the city-state benefits from its relatively small land mass, it was also found to have the greatest proportion of telecommunications professionals within its workforce – a major advantage for the development of new technologies such as IoT, AI and Industry 4.0.

The Index also revealed Japan and Hong Kong outpaced South Korea to take second and third place, with Taiwan coming in fifth. South Korea slid backward this year to fourth place, but held onto its optimistic prospects. The technology hotspot was found to be the most prepared to meet the future challenges of automation partly due to favourable education polices, also reporting the highest tertiary enrolment rate out of the 11 Asian economies researched (94%).

Which markets are on the way up?

But to embrace the new opportunities fueled by digital readiness, organisations need to look closely at those economies climbing the ladder across some of the Index’s key measures.

Take the gains across Hong Kong’s digital environment. Hong Kong ranked as second in the digital infrastructure measure, up one place from the first Index. Hong Kong has the third highest fibre-to-the-home (FTTH) and fibre-to-the-building (FTTB) take-up rate of the Index, an integral element of next-generation networks needed to support the rapid growth in data usage. About 74% of Hong Kong’s population now has access to superfast internet connectivity – behind Singapore (97%) and mainland China (77%).

India also climbed four places thanks, in part, to 86 per cent of its population now enjoying 4G access compared with less than 20 per cent three years ago. Japan made progress in aspects of digital infrastructure following well-implemented government policy, moving up two places. Singapore, Hong Kong, Japan and Taiwan were found to have more affordable broadband compared to US and Australia, pointing to digital strength within many of these key markets.

When I speak with our customers across Asia, they continually cite finding the right people with the right digital skills as an acute business challenge that impacts their operations. Big data and analytics skills are identified as scarce, but The EIU found this is starting to change.

Singapore made significant gains in The EIU’s rankings of digital skills and education, moving up three places in since the first Index release, overtaking South Korea, Hong Kong and Japan to top the Index’s human capital measure. Hong Kong too reported the second largest proportion of skilled technology workers (5%), above India, Korea and Taiwan (4%).

Finally, how well organisations absorb and benefit from the digital technology available in the market remains key to creating competitive advantage. It was positive to see South Korea, Malaysia and mainland China register marked improvements in this kind of industry connectivity.

So when we hone in on a region as dynamic and as large as Asia, it’s undeniable digital transformation remains a major engine of growth. But while most economies in the Index have access to the tools they need to bring about far-reaching technology-led change, let’s ask: are we embracing not only the capabilities – but the potential – in each market?