ASEAN Economic Community to spur urgency for digital transformation
2016 is slated to be a watershed year for the Association of Southeast Asian Nations (ASEAN) economies, especially with the establishment of the ASEAN Economic Community (AEC) – a major milestone towards a massive regional economic integration. By 2020, the combined GDP of the ASEAN economies is expected to grow to US$4.7 trillion, with the region having the potential of becoming the world’s fourth-largest economy as a bloc as early as 2030.
In addition to the already existing free trade agreement, further economic integration will open up the potential where businesses will have access to an enlarged market of over 600 million consumers.
Embracing Digital Transformation
Digital trends like Big Data, Internet of Things, Cloud Computing, social media and mobile web services are radically changing the business landscape and reshaping boundaries of enterprises. Digital technology has the potential to create the right springboard for commerce and substantial economic growth for the AEC.
Mobile as a Catalyst
Today, rapid technological migrations toward mobile broadband networks and smartphones are already happening across many markets benefiting businesses with time and cost savings, and improving the quality of their goods and services. Interestingly, in the next four years, an estimated 70 percent of people across the globe will use advanced mobile technology and 90 percent of the world will be covered by mobile broadband networks.
Across the Asia Pacific and Japan (APJ) region, device penetration is very high and smartphone subscriptions are estimated to more than double by 2020, reaching a staggering 6.1 billion. Almost 80 percent of these new subscriptions will come from Asia Pacific, the Middle East and Africa. According to a GSMA Intelligence report, Asia Pacific will add almost 1.7 billion smartphone connections by 2020, over half of the global total and emerging markets in ASEAN will be a key driver of this growth.
The Millennial Generation Impact
The millennial generation has grown accustomed to the transformative digital technologies that exist currently and they will play an important role moving forward, especially at a juncture when about 50 million people from across the ASEAN region are estimated to enter the workforce from 2010 to 2020.
According to a projection by the International Labour Organization (ILO) and the Asian Development Bank (ADB), by 2025, the regional economic integration will increase GDP by 7 percent. Many of the workforce will be millennials – the first generation of digital natives brought up in the age of technology.
Taking Digital Transformation to the next level
Today, the application economy has morphed into a very real phenomenon for businesses and consumers alike, with every business transforming into a digital business at a certain level.
Everything is driven by a connected, mobile, application-based world, whether it is retail, news, entertainment, banking, education, government or communications. It is a fact that today’s customers are far more likely to experience a brand and interact with enterprises through a software application than with a live person.
Organizations are increasingly leveraging modern technology and communications to transform one or more key aspects of the business to achieve a state of digital readiness.
Finding the Right Connect
With mobile and desktop applications becoming the new battleground for brand loyalty in the region, enterprises failing to deliver a positive application experience risk losing about a third of their customer base.
Brand loyalty is crucial and it all depends on the consumer experience with factors like Quick Loading, Simple Functionality and The Assurance of Security playing a big role.
Applications are increasingly becoming the primary modes for consumers to connect with businesses. A real differentiator is creating applications which are personalized, secure, responsive and easy to use.
The AEC will provide greater access to a market of over 630 million people offering tremendous opportunities. This translates to greater regional competition and the need to address a population of which half are under the age of 30. These are among the main consumers today who have little or zero tolerance for delays or downtime, with their ever-increasing access to various brands through apps.
Getting on the Right Track
Being software-driven has become a prerequisite for enterprises in today’s dynamic business environment. The players which deliver high-quality and secure applications to market faster will stand out eventually in the AEC marketplace.
Embracing an agile management approach is no longer just confined to product development, but it is a culture for engaging in business. Agile thinking is being used to enable digital transformation for businesses across industry. It provides a fast and meaningful way to connect the methodology of agile teams to the business portfolio so management can derive results from agile adoption and have the insights needed to make quick decisions. With the AEC taking off, new opportunities also means new competition. Businesses with agile practices will have the competitive advantage especially in the application economy.
Going agile will enable enterprises to gain competitive advantages through the delivery of superior user experiences and the ability to operate in a more iterative way that can constantly adapt, adjust and pivot based on changes in the market.
For smaller markets especially, businesses could start to see a flood of other players competing against them locally. Given the application economy potential in the AEC, it is important for businesses to adopt a software-driven business model as well as an agile management approach to survive and thrive.