4 minute read 20 Dec 2019
Female computer programmer working at laptop wearing headphones in dark workshop

How Asia-Pacific businesses can benefit from technology transformation

By Patrick Winter

EY Asia-Pacific Area Managing Partner

Focused on promoting Asia-Pacific innovation and technology. Committed to client service by driving EY cross-border collaboration. Passionate about inclusive long-term growth. Husband and father.

4 minute read 20 Dec 2019
Related topics Technology

New technologies are driving increased efficiency and growth opportunities in Asia-Pacific, where businesses are resilient during change.

Home to some of the most innovative countries in the world, Asia-Pacific is a leading area for developing and implementing advanced technology. In 2017, Asia accounted for 85% of the world’s intellectual property filings, with Korea, China and Japan filing the highest number of patents per unit of GDP.

The area has consistently maintained high levels of innovation, which is driving advances in technology throughout key areas, such as Japan, ASEAN and China’s Greater Bay Area (GBA).

The GBA is of particular focus in Asia-Pacific as it’s now pushing China from technology follower to innovator, and it’s an example of the dynamism across this part of the world – where long-term innovative culture is converging with next generation technology.

Technology priorities vary in the region

The Asia-Pacific region is uniquely situated to harness the benefits of the fourth industrial revolution and its technologies, such as blockchain, artificial intelligence (AI), robotics and automation.

In China, AI and big data have long been prioritized by the public sector, and in 2017, the country declared the development of AI as a national strategy. Japan is a leader in industrial robot technology, and is spurring a greater evolution by integrating with deep learning. Korea, Japan and China will be among the three earliest adopters of 5G technologies, and overall Asia is leading the race to 5G globally.

The push to be at the forefront extends to the private sector, with about two-third of C-suite executives in Asia-Pacific investing in digital/technology assets through venture capital, direct investment and acquisitions, and alliances.

Investment decisions

67%

of C-suite executives in Asia-Pacific are investing in digital/technology.

Investment decisions are made based on the return on investment (ROI). So why are Asia-Pacific investors expecting greater ROI from technology?

Mature and emerging markets embrace technology to achieve their own goals

Technology enables organizations to accomplish two things: reduce costs and labor through increased efficiency, and drive new capabilities and more opportunities for growth.

While efficiency and new capabilities are clearly important, understanding which of these values is more crucial to an Asia-Pacific organization depends heavily on location.

  • In more mature markets, driving new capabilities is necessary, but often the catalyst for applying new technologies is to replace expensive labor-intensive processes with more cost-effective alternatives
  • In emerging markets, organizations are more focused on leveraging the latest advancements to expand capabilities and opportunities for growth. These organizations are often able to benefit from leapfrogging antiquated generations of technology straight to the cutting edge, removing the need to develop intermediary solutions

While mature markets are investing to improve efficiency, emerging markets are investing to create something new altogether. Powerful technological tools are launching revolutions in industries such financial services and retail, and even underpinning smart cities. They are rapidly changing the way people work, transact and live, making it possible for emerging markets to jump to the front of the line in Asia-Pacific and, in many instances, globally.

Managing change is instrumental in implementing technology

There are challenges associated with technologies that are so transformative, and in this Asia-Pacific is no exception.

Organizations have to overcome the change management aspect that accompanies implementation of technology. Fundamentally, this means focusing on replacing the mundane and less efficient aspects of jobs, and not necessarily the jobs themselves. Organizations must also be determined to upskill their labor force to be ready for higher value jobs which cannot be replaced.

In many ways, substituting old technology with new technology is the easy part.

Addressing the human impact – when roles have been radically changed, or no longer needed at all – is easy to underestimate.

Change management can be a less arduous task in emerging markets that are adding something brand new. But for mature markets, it is essential to overcome “fear culture” – the fear that technology will replace jobs that are deeply embedded.

If change is implemented effectively, fear can be alleviated by providing people opportunities to upskill, so that they can increase the value of other parts of their roles. It’s a mindset that needs to be embraced by employers and employees in any country, and in this regard, Asia-Pacific countries have excelled.

The Asia-Pacific area as a whole is far more adept at accommodating the transformative nature of new technologies.

Asia-Pacific is full of countries that have faced decades of rapid change, while for many others, rapid change is still underway. Resilience to change has given the region with an eagerness to invest in new technologies, to both improve efficiency and expand opportunities. It is a competitive advantage for the area – one that could compound growth over future generations, from emerging markets to the mature.

Summary

By capitalizing on its change management ability, Asia-Pacific can seize the full benefits of transformative technology to improve efficiency and create growth.

About this article

By Patrick Winter

EY Asia-Pacific Area Managing Partner

Focused on promoting Asia-Pacific innovation and technology. Committed to client service by driving EY cross-border collaboration. Passionate about inclusive long-term growth. Husband and father.

Related topics Technology