DBS Asian Insights: Business Impact of Digital Technology
Who will emerge the floaters and sinkers in the sea of digital disruption? That will depend on how well businesses leverage new opportunities.
Author: DBS BusinessClass, Administrator of DBS
Key summary points:
- Asia is primed for the transformative and disruptive impact of digital technology
- Key drivers of digitisation are smartphones, social media, big data and the Internet of Things
- Digital technologies are already impacting sectors such as media, retail and telecom
- Sectors that are highly regulated (healthcare and education) will get more time for adoption
No sector will remain untouched by the digital revolution, but the timing and impact may depend on a few key considerations. Businesses that offer virtual products, such as banks and insurance companies, are more likely to face a challenge from digital players than businesses that manufacture physical products. Burgeoning online retail may lead to higher demand for warehouses and logistics services, and lead to a decline in demand for retail and office space. Some sectors, such as healthcare and education, have a lot to gain from digitisation but the process may take longer because they require more complex digital solutions, and also because they are such highly-regulated sectors.
The new age of digital technology is set to revolutionise how businesses operate, in a manner and at a speed that is unprecedented. The democratisation of technology also means that now, millions of people are able to develop apps that have the potential to reach billions of people. And as costs are driven down, the proliferation of digital devices and platforms will empower individuals and businesses across the world.
Asian economies are seeing huge leaps in internet and smartphone penetration, and are on the brink of the true disruption that will be engendered by the digital age. Asia, excluding Japan, will have one billion smartphone users by 2015. This would more than provide the requisite critical mass and momentum to accelerate the digitisation of its economies.
The first wave of digitisation is well underway, with smartphone penetration empowering consumers by allowing constant access to the internet and apps, and allowing them to buy and sell products and services with the touch of a screen.
The second wave of disruption – that of big data analytics – has just begun and will have far-reaching implications over the next few years. Businesses can predict the next purchase by a consumer by leveraging on developments in big data analytics.
The Internet of Things is the third wave of the digital disruption. We are not quite there yet, but when in full swing, this may be the most disruptive wave of all. Everyday items from refrigerators to car components will be connected to the internet and will have the ability to automatically transfer data over a network without human interaction.
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