Accelerating the State of Digitalization

The world has changed significantly. Owing to the pandemic that still rages on, the move to digitalization has hastened. It was already there even before the pandemic. Large manufacturing companies were exploring newer ways to work with cloud computing and assembly line robots; while governments around the world were launching initiatives to push R&D, innovation and knowledge building in STEM. And driven by cheap smartphones and high-speed internet, individuals were being introduced to digital worlds and online shopping and online entertainment through OTT apps, completely reframing their understanding as to what digital can achieve.

Possibilities of digitalization was put to test with the pandemic, particularly in the way businesses operated. Companies that were hitherto unaware of technologies such as video conferencing, digital wallets and e-payments, and the vast world of e-commerce had to learn them on the job, to remain relevant amid the disruptions brought about by COVID-19.

It was the same story everywhere and Asia is no different. A survey by McKinsey found that the average share of products and/or services that are partially or fully digitized across businesses in Asia-Pacific has risen sharply to 54% in July 2020 from 33% in December 2019. The average rate of adoption in digitization has increased by 10+ years in the region – much more when compared to other regions of Europe (7 years) and North America (6 years).

The trend looks to rise upward. This is one of the topics being discussed in the upcoming Horasis India Meeting, which will be held between 25 to 26 September, 2022 in Vietnam. The meeting will bring together 300 of the most senior members of Horasis to chart the path to recovery for developing regions in Asia, particularly India and Vietnam.

Digitalization in India

India went through various phases of lockdowns and reopening of its economy. Between January 2020 to June 2022, India registered more than 43 million confirmed cases with more than 500,000 deaths due to COVID-19.

Amid the coronavirus induced lockdowns in India, businesses, schools and many non-essential government offices were shuttered. In the initial days of the pandemic, most were unaware as to how long the pandemic will last. But as awareness around the pandemic was becoming clearer, schools and businesses shifted to working online.

Businesses were the first to send all their employees to report from home via video conferencing apps and messaging apps such as WhatsApp, Telegram and several others. Zoom, the video conferencing app, witnessed a 70 times increase in its user base in India in the four months to April 2020.

India has reopened since then, but after tasting the flexibility and productivity that a flexible working model brings with it, many businesses now are pivoting to hybrid working, which requires employees to only work from offices for two to three days in a week. “As all organizations are evaluating what would be their version of future of work, we at Ericsson are exploring our future workplace from a physical, virtual and cultural perspective to cater for greater flexibility and new ways of working. We believe the future of our work will be ‘hybrid’ on the back of technology which will be the game changer as well as the enabler,” Priyanka Anand, VP and Head – HR, Southeast Asia Oceania and India at Ericsson said.

Digitalization in Vietnam

The start of the pandemic brought in an additional 8 million new digital consumers in Vietnam. Digital consumption has become a way of life, with 99% of the new digital consumers intending to continue using digital services going forward. Overall, the internet economy in the country is expected to reach US$57 billion in 2025, growing at a CAGR of 29% from 2021. Deal activity, including investments by venture capital, private equity and strategic investors have skyrocketed. Deal value in Vietnam reached US$1,368 million in the first half of 2021.

The Vietnamese government recently released its National Digital Transformation Programme by 2025. Some of the highlights of this initiative include 50% of banking operations to be made fully online; 50% of Vietnam’s population to have a digital checking account; and 70% of customer transactions to be made through digital channels. Other than this, the initiative also envisions the digital economy to contribute 20% by 2025 and 30% by 2030 to the country’s economy.

New Engine of Growth

Digitalization has clearly shown to be the new growth engine for developing economies such as India and Vietnam. The pandemic has certainly shone the spotlight on digitalization and the myriad opportunities it brings.

More is yet to come. We will see innovative products and services that stand to further enhance the way we live, interact and work. 5G technologies, coupled with advancements in emerging technologies such as blockchain, AI, computing and sensing technologies will form the foundation of the next technological revolution and help usher in the post-COVID recovery.

Photo Caption: A lady does online shopping in Vietnam using her laptop.