As I was writing an industry overview for a financial prospectus, I came upon a particular insight in one of those published industry reports and I can’t help but think “Way to bury the lede!”
I was researching digital transformation in Southeast Asia and having been retired career-wise with not only my physical self but perhaps my mind also quarantined, seeing the updated surveys and predictions for DX in Southeast Asia is astounding.
In 2018 the International Data Corporation Worldwide Semiannual Digital Transformation Spending Guide predicted DX spending to be US$2 trillion in 2022. Fast forward to January 2021, Gartner forecast worldwide IT spending at US$3.9 trillion but a mere six months later in July that forecast was updated to US$4.2 trillion. With the pandemic as a major catalyst, DX is accelerating so fast, latest big picture predictions can’t pin a ballpark figure.
Now what about Southeast Asia? In 2020 Google, Temasek and Bain & Company published a report indicating that there are 400 million Internet users in the region, with 40 million of that coming online only as the pandemic broke. Google estimates 3.8 million new users go online for the first time every month and the public perception is extremely positive with 8 out of 10 Southeast Asians acknowledging technology as beneficial during the pandemic and 94% of new users intend to continue with their online usage even after the pandemic.
But it isn’t just the astonishing user growth in numbers that is notable in our region, It is also the speed of digital adoption. SYNC Southeast Asia, Facebook and Bain & Company describes that hyper acceleration as: “changes that were expected to take place over half a decade took place in just a year.”
On the business end of the spectrum, Southeast Asia’s Internet sectors hit US$100 billion in 2020 and are still growing and predicted to reach US$300 billion in 2025, described to be “at full velocity: resilient and racing ahead.” Technology verticals of note in the region are e-commerce, transport and food, online travel, online media, and financial services. What’s notable is the addition of two relatively new but fast-growing sectors, health technology and education technology.
Where’s the minor headline in the Google, Temasek and Bain & Company e-Conomy SEA 2020 report? While Southeast Asia is poised to be the global DX hotspot, the report identified 6 momentum drivers and one critical blocker, like an industry version of Pablo Neruda’s Twenty Love Poems and a Song of Despair.
Key drivers are: Internet access, consumer trust, payments, funding, talent and logistics. (Love.) The “critical blocker” is talent. (Despair.)
The report sums up: “Growth of the Internet sector may be held back due to shortage of workers with right skills” and “urgent need and opportunity to reskill and upskill workers so that they can find jobs in growing Internet sectors amid the tough employment climate”.
The future of a global enterprise in the next decade is fundamentally in the hands of higher education but it is one of the hardest hit sectors in the pandemic and many universities are struggling to regain a sense of stability let alone dealing with the pressure to innovate in a time of limited resources.
Last year, ASEAN education ministers held a summit on digital transformation of education systems in which SAP Southeast Asia’s President and Managing Director Verena Siow “highlighted the importance of engaging the private sector in the delivery of education and skills.”
In my experience, there has never been a lack of interest from private sectors to collaborate and contribute in terms of thought leadership and practical application. What becomes a barrier to entry or at the least the cap on innovation is typically regulatory (a function of government) and institutional (the nature of universities and colleges).
DX thinking will have to solve DX problems as the future of a global Internet enterprise will be in the hands of startups fiddling with the various permutations of combining continuous learning with current EdTech platform capabilities. When these ventures come out of incubation or for a few even Series A, they will find a welcoming regulatory environment as commonly seen in the tech industry in the new normal and a vast regional if not global market not limited by physical campuses. By then higher education institutions will be facing tough competition for speed and relevance.
With the dire state of economies worldwide and massive job losses, tech is one of the few pillars holding things up that a venture into solving the skills gap with a startup mindset is not quite mere product development but more in the territory of development and social responsibility.
How has your work or education been disrupted by digital transformation?
(For any of you who have been working in the DX sphere pre-pandemic and continue to do so throughout, remember, you are a different breed of frontline workers.)
DX is a framework that inevitably must be applied in all relevant fields, now, or more accurately last 2012. Contrary to what I have been told often, DX is not just for people in IT, and it’s not only coding.
While schools can quickly adapt EdTech, can a curriculum of a degree program pivot to accommodate and overcome that “crucial blocker”? Startups pivot. The academe, well, it metamorphoses or reproduces by cell division.
Strides have been made but is it at pace with the 14% growth in one year? A degree takes 4 years to learn and earn.
If the higher education sector is not yet in a position to scale, then it’s in the hands of employers and corporations to reskill and upskill employees.
Comments