In just decades, digital advancement has enabled technology to shift from being a business enabler to being THE business.
As businesses look into their plans for 2018, many tell us that the goal is to leverage new technologies to transform their business models. However, whilst they are taking action to stay competitive in the internet economy, they also express difficulties in navigating the digital landscape. This is likely because digital innovation is happening and being adopted by consumers at a faster pace than these companies can handle.
Despite the challenges, there is no going back. For the opportunities are too big to ignore. According to forecasts by Google and Temasek Holdings, Southeast Asia’s digital market would have reached US$50 billion in 2017 and could exceed US$200 billion by 2025. Of that, e-commerce could rise to US$88 billion from the projected US$10.9 billion in 2017 and US$5.5 billion in 2015.
In assuming the 2018 ASEAN chairmanship, Singapore is focusing on e-commerce and the digital economy to help regional businesses grow. It aims to streamline regional e-commerce trade rules and facilitate the smooth movement of goods. This end-to- end strategy of enabling digital and physical channels to promote e-commerce has the potential of opening up new business markets. Greater cross-border connectivity will also deepen the 10-nation bloc’s integration.
There is no better time than now to drive the region’s digital economy. The growing middle class, greater mobile Internet accessibility, and rise in online payment options for both the banked and underbanked present opportunities for new markets and innovative partnerships.
However, becoming a truly digital economy requires more than an online platform that connects consumers, businesses, suppliers, and payment networks. It is about facilitating and promoting greater participation in the digital value chain.
Governments and businesses can collaboratively shape the digital economy and foster inclusive growth. The following are some of the key elements that can encourage more enterprises and consumers in ASEAN to engage with the digital world.
An integrated digital backbone. Policy commitment and coordinated effort is vital for the development of connected digital infrastructure. Consistent digital laws and regulations, and a regional policy framework for data sharing, cloud computing, online privacy, and cybersecurity are key to the development of digital connectivity. When information can flow seamlessly via data centres and digital payments platforms, and goods are moved efficiently from warehouses to distribution hubs, we can create a sustainable digital trade ecosystem.
A partnership blueprint. Going digital is not a do-it- alone business, but an integration across partners to create a holistic and compelling customer experience. When developing a digital plan, traditional companies need to consider partnerships with emerging digital service providers to ramp up their own efforts. These collaborations can help small- and medium-sized enterprises break into new markets, as well as enable established companies to be more agile. A common responsibility around digital security and crime prevention. The increase in digital transactions will change the nature of risks. As e-commerce activities increase, higher incidences of fraudulent misuse of payment networks may follow. Banks need to ensure that customers are protected against illicit acts by their partners and service providers. As information moves more easily online, participants in the e-payments system from banks, merchants, and vendors to consumers share a common responsibility in safeguarding data flow and defending against cybercrime.
A workforce transformation strategy. Digital evolution is happening at a speed determined by innovators and demanded by consumers. The accelerated pace of new-technologies adoption will redefine the workforce. To realise the full potential of the digital economy, it is as much about attracting digital talent for today as it is about training workers to do the jobs of tomorrow. To position the labour force successfully, governments and businesses will also have to come together and help workers navigate the changes. Our stance, as a key employer in Singapore’s financial industry, is to re-train rather than replace employees. We have launched a plan to re-skill more than 3,000 of our employees by 2020 to prepare them for their future roles.
Economies are becoming more interlinked as digital innovation accelerates. ASEAN is better off collaborating to drive inclusive growth. The need for greater concerted effort in building a regional digital ecosystem that runs on consistent and transparent regulations is real.
As Singapore works with the rest of ASEAN to encourage e-commerce and digital development, the onus is on businesses to adopt innovation and overcome digital challenges. Whilst governments can support and catalyse the region’s digital revolution, organisations are the drivers of their own ambitions and they can take charge to adapt, survive and thrive.
As we embark on the new year, it is a good time to reimagine how our business plans can best leverage ASEAN’s efforts to strengthen regional connectivity. The more we do to embrace and foster this ongoing transformation, the more benefits we stand to reap for our collective society.
The views expressed in this column are the author's own and do not necessarily reflect this publication's view, and this article is not edited by Asian Banking & Finance. The author was not remunerated for this article.
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Judy Hsu is the Chief Executive Officer of Singapore and ASEAN Markets (Malaysia, Vietnam, Thailand, and Rep Offices) at Standard Chartered. She is responsible for steering the business development and execution of strategy for the bank in Singapore, the second highest contributor to the group and major driver of the performance in ASEAN and South Asia (ASA) region.