The pace of technological innovation and the growth of Internet usage have a disruptive impact on how people around the world think and live.
The International Telecommunication Union estimates that there are 2.5 billion Internet users today: 1.6 billion more than in 2004. And most of this growth comes from Asia, which now has 45% of the world’s Internet users. In fact, the region that is currently undergoing the most powerful digital revolution is precisely Asia.
This was the core of the brilliant conference organized by Asia House in London, which The International Post Magazine had the opportunity to attend. The roundtable saw guest speakers such as Dominic Barton – Managing Director of McKinsey, Parminder Singh – Managing Director (ASIA) of Twitter, Owen Wyatt – Commercial Director of CNN, Hussein Kanji – Partner at Hoxton Ventures and Shao Zheng – Counsellor at the Chinese Embassy in London.
The discussion aimed at evaluating how the ever-growing presence of the Internet and development of technologies is transforming Asian societies and especially Asian businesses. The starting remark was that the diffusion of the Internet until now, in countries such as China, India and South Korea, has been mostly consumer-driven. Internet is still primarily used as a platform of communication and online transactions; nevertheless, it has already generated enormous economic value to Chinese economy. Already in 2012 China took over the United States as the largest e-commerce market. However, the Internet is still used at a small-scale in most Chinese businesses: according to McKinsey’s latest survey of CIO, the typical Chinese company spends 2% or revenue on IT, far below the 4% international average. Therefore, there are huge margins of growth for businesses in all sectors through the implementation of strategic models based on technological innovations and the Internet.
These considerations on the momentum provided by the Internet and other disrupting technologies for the economic growth of developing countries is valid for all Asian countries; however, each single nation has to be studied separately.
In fact, Asian countries have all very different starting points: while China and South Korea are very advanced, India is still very behind. For instance, while South Korea provides 1000MB/sec of Internet connection for $20, India the access to the Internet is still profoundly unequal between the rural and the urban areas.
Even if they have all different starting points, all of them can benefit greatly in productivity, efficiency and consequently in economic growth, by adopting new technologies across major sectors of the economy. In agriculture for instance, the digitization of the monitoring and storage systems would reduce drastically the amount of waste of grain due to bad warehouse facilities. The benefits of digitization are significant in many other contexts, for example in the provision of governance services. The positive impact of e-governance for efficiency and reliability is observable in countries such as Singapore, which ranks first for digitisation of governance. However, also India has made huge improvements in the reliability of its governance through the adoption of digital identities. India has managed to simplify many complex bureaucratic procedures also by allowing citizens to avoid paying briberies by directly bypassing the middlemen. The Internet also makes a huge impact on the finance sector by generating loan opportunities for people who lack a credit history. For example, new providers of loans outside the banking system, such as Alipay launched by the Chinese-based Alibaba, have greater information than banks on their customers by analyzing their purchasing behaviour and use the right to access their service as a guarantee for their loans.
Consequently, it is increasingly more evident that digitization, defined as mass adoption of connected digital services by consumers, enterprises and governments, has emerged in the recent years as a key economic driver that accelerates growth and facilitates job creation (WEF, Global Information Technology Report 2013). The pace of digitization is changing the way that people live, think, work and make business – the challenge for Asian countries but also for the rest of the world is to embrace these changes and rethink a world in which disruptive technologies can help construct a better and more efficient reality.