The Rise Of Digital Transformation Due To The Pandemic In Key Asian Markets.

It affected the lives of everyone but especially so for those in Asia

The Rise Of Digital Transformation Due To The Pandemic In Key Asian Markets.

In late 2019 the COVID19 pandemic arrived. It affected the lives of everyone but especially so for those in Asia, where the virus originally emerged.

The pandemic was only expected to last as long as 18 to 24?months, as of June 2020. This prolonged period speaks of the pandemic itself, but its effects will last longer and are likely to create lasting changes in each nation’s economy.

Most economies naturally have taken for the worst with multiple sectors of the economy being shut down completely or minimized. The COVID-19 pandemic accelerated many structural changes which were already on the way. An example of one of these changes is in the way they were pushing companies towards online services (e.g., digital banking in Singapore and Southeast Asia). As a result, Internet traffic has increased everywhere. In fact, in Italy, the number doubled while Japan received a 31% increase. The increase is mirrored in news and digital publishing, video streaming, social media, gaming, and education as well. Even among the youngest consumers (Generation?X,?Generation Z, and millennials), a number between 10% and 12% of first-time online shoppers has been recorded. *Statista - digital adoption across APAC countries

  1. Impact of COVID-19 and challenges in Southeast Asia: Although Southeast Asia has made prominent changes towards digitalization over the past few years, many traditional businesses continue to lag behind. Seven out of ten companies are at risk of falling behind due to underdeveloped digitalization strategies and/or weak execution plans. COVID-19 has pushed them into accepting and working with the new age of digitalization.

With a 100% increase in e-commerce, it is evident that there has been a major shift in consumer behavior. Most citizens have switched to online shopping and 76% plan to stick shopping that way. The leap to digital for businesses has not been as easy with 40% of consumers still citing “issues with delivery” and a 120% increase in delivery times. This leads us to the next point: automation is a necessity.

During the pandemic, businesses were suddenly met with a gap between them and their customers forcing them to switch to eCommerce almost immediately. This naturally created a new set of challenges to tackle in terms of speed and scale. This can be solved through automation. In Southeast Asia, cheap labor costs and hostile views towards automation are the biggest barriers to implementation. Businesses repeatedly overlook how automation can boost their workforce.

Another lesson learned during COVID-19 was the need to optimize supply chains. During the crisis many businesses have stepped up to fill the gap, for example, L’Oréal started producing hand sanitizers and Lazada started shipping fresh produce. Each has been a testament to how agility and collaboration are the key to a strong supply chain.

 

  1. Industry 4.0 : This decade has and continues to be critical for Asia Pacific countries that are on the journey of achieving a digital society. There is a growing emphasis on intelligent connectivity which means that digital technologies will play an increasingly crucial role in enhancing societies and economies. This period happens to coincide with the Covid-19 pandemic. This period consists of an accelerated shift to digital platforms for work and social activities and the realization of the fourth industrial revolution (also known as Industry 4.0) as people, businesses, and governments seek to curb the transmission of Covid-19 and quicken the economic recovery. The need to advance the digital society in a more coordinated way has never been more important.                                       The pandemic has brought to light both the risk of exclusion for people still unable or unwilling to access digital services and the weaknesses in existing digital transformation frameworks (even in advanced digital societies). Further, lockdown measures have taken their toll on economic output, resulting in economic recession and job losses in many markets. As a result, a top priority for governments in the coming years will be assisting companies in rehabilitation and increasing their resilience to potential future shocks.

While connectivity and digital services will remain fundamental to sustaining societies, countries in the Asia Pacific will turn to Industry 4.0 in the 2020s to drive post-pandemic economic recovery and help build resilient economies for the future. Industry 4.0 will be integral to future digital societies as businesses reconstruct supply chains and seek new ways to operate amid the disruption of global product lines and supply chains because of lockdown-related labor shortages and inactive logistics.

For consumers, this will result in better quality products and improvements in user experience for a broad range of services, including healthcare, education, entertainment, and retail. Many countries in the Asia Pacific have developed plans to facilitate Industry 4.0 in their markets. E-government, manufacturing, and healthcare are among the top sectors expected to feel the immediate impact of Industry 4.0.

An example of how Industry 4.0 is being used in healthcare is as follows. The fourth health care revolution is now emerging in parallel with Industry 4.0. This means that the health care delivery process has become a cyber-physical system equipped with the Internet of things, RFID (radio-frequency identification), wearables, and all kinds of medical devices, intelligent sensors, medical robots, etc. These are integrated with cloud computing, big data analysis, artificial intelligence, and decision support techniques to achieve smart and interconnected health care delivery.

 In such a system, not only the health care organizations and facilities (e.g. hospitals, clinics, and long-term care facilities) are connected; but also all the equipment and devices, as well as the patients’ homes and communities are linked together. Patient-related information, e.g. medication history, diagnostic notes, lab results, treatment plans, pharmacy refills, billing, and insurance claims, can be potentially shared through adequate protocols. In addition, through AI techniques, we can envision proactive treatment, disease prediction, and prevention, personalized medicine, and enhance patient-centered care. Thus, a pervasive, smart, and interconnected health care community emerges leading to the paradigm of Health Care 4.0. 

An example of this is the way the community has moved seamlessly into online appointments. The Director-General of Health Malaysia Noor Hisham Abdullah stated in a Facebook post that the Health Ministry (MOH) has signed a Memorandum of Understanding (MoU) with four online health services companies for their ‘Online Appointment’ and ‘Webinar for Covid-19’ initiatives. The four online health services involved for ‘Online Appointment’ sessions are Queuemed, EncoreMed, Bookdoc, and Doctor on call. This is to lessen the volume of patients at clinics to encourage social distancing during the Covid-19 pandemic.

Here’s another example. According to Hospital Tuanku Fauziah (HTF) advanced acute internal medicine consultant, Prof Datuk Seri Dr Paras Doshi, a pocket-sized ultrasound device is currently in use in Malaysian hospitals as a diagnostic tool for the early detection of Covid-19 complications. Dr Paras says that it is smartphone and tablet compatible, giving doctors more freedom of movement as well as quicker diagnostics. For example, patients won't have to be sent for an imaging test of their organs using bulky equipment like computerized tomography but instead can use said portable device. It effectively reduces risks for front liners and patients catching the virus as the diagnosis can be done on the spot.

A key enabler of Industry 4.0 will be intelligent connectivity, which can be described as the fusion of advanced networks, AI, and the Internet of Things (IoT). The intelligent connectivity era has begun in the Asia Pacific, and mobile operators are leading the way with investments in 5G infrastructure and various transformative technologies, including AI and IoT. 5G is now available in more than 10 countries in the Asia Pacific region, including Australia, Japan, Singapore, South Korea, and Thailand. The post-pandemic world is set to be shaped by the greater use of digital technologies for everyday activities, so it is essential for stakeholders to take a holistic approach in this process, considering the direct and indirect impacts it will have on societies.

 

  1. Digitalisation Trend Across APAC since the Pandemic

  • Opening to APAC’s trend in digitalization

Digital technologies increasingly penetrate every aspect of society. The impact of this trend is profound and measurable. For individuals and communities, digital technologies provide access to many life-enhancing services, some of which may be impractical to access by conventional means. On the other hand, businesses and governments utilize digital technologies to increase productivity, drive value addition in economies, deliver services more efficiently, and enhance the level of engagement with various stakeholders.

  • Opening to APAC’s trend in digitalization

Even before the Covid-19 pandemic, countries in the Asia Pacific had been improving on GSMA Intelligence's digital society index. However, 2020 marks a significant change on the digital society path. As a result of the pandemic, governments have to rethink their approach to digital transformation, given its potential to help society respond to the crisis in the short term, recover from the socioeconomic repercussions in the medium term, and achieve sustainable and inclusive growth in the long term.

  • Vietnam’s Accelerated Transformation Roadmap (2016 - 2020)

Digital transformation plans accelerate in Vietnam because of the pandemic. In 2019, Vietnam’s government set a target to become the leading digital economy in ASEAN by 2030, with the aim that digital economic activities account for up to 30% of GDP by this time, which would represent a substantial increase from the 5% in 2019. The pandemic has only served to speed this process up: in June 2020, the country’s National Digital Transformation Roadmap 2025 (with a vision towards 2030) was approved, setting further targets and guidelines for Vietnam’s digital transformation. Vietnam experienced the biggest improvement on GSMA Intelligence’s digital society index between 2016 and 2019. GSMA Intelligence is the mobile industry’s leading data and analysis resource. It is used by over 800 of the world’s mobile operators, governments and regulators, device and software vendors, equipment manufacturers, financial and consultancy firms.

This was driven by improvements in the connectivity component of the index, post-launch, and rapid expansion of 4G networks in the last three years. It was also driven by improvements to the digital identity, digital citizenship, and digital lifestyle components. However, there are still challenges that need to be addressed to make further progress, particularly in the digital commerce component and with regard to policies to support innovative start-ups. Vietnam’s government has already started moving in this direction: in July 2020, it unveiled a national e-commerce development plan, which is expected to stimulate a 25% annual growth in the e-commerce sector to reach a target of $35 billion in sales and half of the country’s 96 million citizens shopping online within the next five years.

 - Govt’s effort in the recovery of the economy


Against this backdrop, a top priority for governments in the coming years will be to help economies to recover and become more resilient to future shocks. Digital technologies will play a critical role in reviving economic output in a post-pandemic world and enable governments to deliver public services more widely and efficiently. Greater digitization will lead to the unintended consequence of job losses, particularly for manual tasks. To mitigate this risk, governments and other stakeholders should identify the skills that will be required in the emerging digital world and invest in training the workforce to be gainfully employed in jobs of the future.

       4. Current Players in Building the path for digitalisation

  • Shift to Online Channels Dependency (lead for data traffic usage)

Since the beginning of the pandemic, many everyday activities, including work, learning, shopping and social interactions, have moved online. Due to this, universal access to fast and reliable connectivity as well as the availability of digital services has never been more important. The shift to online channels for many social and economic activities resulted in sharp increases in mobile (and fixed) data traffic for operators in the Asia Pacific.

  • Data traffic increase across APAC

In South Korea, operators reported traffic increases of 13%, reaching 45–60% of their deployed capacity, while NTT Communications in Japan reported an increase in data usage of 30–40%. In Indonesia, operators recorded a considerable rise in data traffic during the 2020 Eid celebrations compared to previous years due to large-scale social restrictions. Despite the change in data consumption patterns, networks remained resilient throughout lockdowns, underlining the considerable investment made by operators in network infrastructure.

  • Decrease in Revenue for Mobile Operators (Data Traffic)

However, the increase in online traffic has not resulted in a commensurate increase in revenues. Mobile operators in Asia Pacific countries, including Bangladesh, India, Japan, and South Korea, recorded a decline in revenues of between 2% and 8% during the second quarter of 2020. This was a result of several factors, including discounts on voice and data packages to help people stay connected during lockdowns, delayed recharges, and fewer subscriber additions, because of reduced consumer spending due to the economic impact of the pandemic.

 

  1. Challenges Faced in Education and the new Generation


- Current Trends in Online Education


Covid-19 catalyzed online learning in Bangladesh at the beginning of 2020. Most universities in Bangladesh lacked basic learning management systems and digital infrastructure. With the enforcement of lockdown measures during the Covid-19 pandemic, the University Grants Commission (UGC) introduced policies requiring all universities to go digital and to make admissions, teaching, and learning activities accessible online. Within four months, digitization was mainstreamed. Around 3,800 classes are now held online daily with more than 220,000 students in attendance. Mobile operators have been instrumental in providing the required connectivity for online learning. State-owned Teletalk Bangladesh provides connectivity to the students of 42 public and 68 private universities, who are using the Bangladesh Research and Education Network platform run by UGC, while Grameenphone has partnered with several universities, including East Delta University and Dhaka University, to facilitate online learning. By the end of July, around 203,200 classes had been delivered to more than 9.2 million attendees by 10,200 faculty members.

  • Lack of Infrastructure (Internet Access) Affecting Education

Importantly, the pandemic has brought to light the risk of exclusion for people still unable or unwilling to access digital services and exposed weaknesses in existing digital transformation frameworks, even in advanced digital societies. In India, a lack of connectivity in many rural areas is reported to have hindered the ability of students to participate in online learning during the lockdown. In Pakistan, 9 districts out of 32 in Quetta, the provincial capital of Balochistan, have no internet infrastructure, leaving students similarly unable to participate in online learning. In Japan, a paper-driven culture in government ministries, despite ambitious digital government initiatives, has been blamed for disrupting productivity during the lockdown. Social distancing measures have had a negative effect on economic output, resulting in record economic contractions and job losses in many countries.

India though has explored learning through the pandemic without access to the internet. Focussing only on online education, despite evidence of its poor penetration, is contrary to the goal of universal education. It is critical that all students, irrespective of their economic backgrounds have equitable access to education. To facilitate that, without compromising on social distancing norms, innovative steps need to be taken. Here are a few ways of remote learning that have been implemented without access to the internet/smartphones. 

In Jharkhand’s Dumka district, a headmaster of a school has installed speakers in the areas, depending on the number of students. Lessons are delivered by teachers in the school, over the mic and the students sit near the speakers. If they have any questions, they send a message through the phone and it is resolved the next day. This method has been well received by students, as they are taking interest in learning through this unique style. A similar initiative is radio broadcasting. Radios are easily accessible. Broadcasting academic content through radio channels is a cost-effective method of teaching students. Timings are communicated in advance so that no one misses out on lessons. Weekly kits could be designed comprising of readings, worksheets and other required materials. These can be delivered to students and any queries and can be resolved through calls or messages. If the situation allows, a dropbox can be installed at the school, wherein the students can drop off their assignments.

What now?

 Now that you know exactly how the rise of digital transformation has affected key Asian markets during the pandemic, here’s what you should consider. The most obvious step would be to open yourself and your business up to digital transformation. Through this, your company will be able to use digital transformation to thrive through this pandemic and learn from those who have. Through this, you and your business may be able to expand your user base and reach your customers in an easier fashion, reaching opportunities that may have been missed. Educate yourself and your business on the rising technologies and allow yourself to experiment with them to find how you can leverage them.