Storm of digital services and its impact on Asia

Friday, 28 March 2014 00:05 - - {{hitsCtrl.values.hits}}

By Shabiya Ali Ahlam One cannot deny the presence of a digital storm in our everyday lives. Due to this, approximately six years from now, there will be no less than 50 billion devices connected to the internet and five billion internet users. This is because typically middle class citizens will have about 10 devices connected to the internet. What this means is that in

terms of propagation and explosion, the growth of people, business and other factors that are connected to each other will grow approximately by 50-fold. At the recently-held WSO2 Conference 2014 Asia, Dialog Axiata Group Chief Executive/Director Dr. Hans Wijayasuriya delivering the first keynote address shared his thoughts on emerging Asia in this regard. Greatest opportunity for digital service explosion resides in Asia Opining that it is in Asia that the greatest opportunity for the digital service explosion resides, he cautioned that Asians being within close proximity have to be conscious of the problems and opportunities that lie ahead. While 40% of the economic weight of the world will be in Asia, it is important to note that 67% of new employment that results in growth at an individual level will be in emerging Asia compared to 1.8% in Europe. Moreover, smart phones will be available to 54% of Asians by 2015 and more than 80% by 2020. Wijayasuriya asserted penetration will reach 100% well before 2020. “The challenge we all face in doubling the technology in emerging markets is that we need to face the reality that none of us will earn our lunch unless digital services can transform lives,” Pointing out that 36% of South Asians and 31% of South East Asians live on less than US$ 1.25 per day, he emphasised this cannot continue. “If we are driving the future of business, and if we are the engine of innovation and want money flow in the years to come, then we must transform lives. If we don’t do so we will be faced with a challenging situation where technology and the society will not be aligned,” asserted Wijayasuriya. Why is Asia challenged? Although many opine the region is challenged due to the status of its absolute wealth, Wijayasuriya stated it is not so. Since, majority of Asian countries have a plethora of natural services, in addition to its highly-capable human resources, it is not the wealth factor that challenges the region at the top of the pyramid. Challenging is the region’s unequal income distribution within countries which skews the wealth gradient at the top of the pyramid. The Gini coefficient for most of the Asian countries is

greater than 40%. Linking the impact of this factor to the digital service storm, Wijayasuriya said: “At the end of the day, if technologies evolve and people cannot consume the products of the business, the money that will flow to technology industries and towards the growth of these technologies will be limited,” he cautioned. Story of the two segments of the pyramid In Asia and in most emerging markets there are two very specific segments in the digital service pyramid. One segment, which is positioned at the top of the pyramid, is the small minority of business and enterprises that are largely cosmopolitan in nature that live and operate in line with global influence. The second, which is positioned at the middle and the base of the pyramid, is the real growing segment which is highly heterogeneous and represents the mass market. While the wealth of that segment resides in South Asia, the Western business has attempted and rushed to capture that area. This custom-based duality, which on one hand has a cosmopolitan globally emerging segment and on the other hand a very unique mass market segment which is rapidly growing, is the influence of the structure and behavioural dimension of what is called the digital opportunity. How technologies can be used to ride the digital storm Wijayasuriya said the solution to this is to think of two dimensions to innovation. One is value addition, which continues to enhance customer experience (that applies to the top of the pyramid segment), whereas the other is value adaptation.

Top forum hosted by WSO2 on ‘Connected Business’

In the ever-changing world that is literally transforming by the minute, customers are adopting technologies faster than companies can adapt. In order to keep pace with today’s connected customers, it is essential for companies to become connected. In a border context this means that companies should increase their efforts in deeply engaging with workers, partners, and customers, while changing how work is done. It requires coming up with new ways of thinking about the company and treating it more like a complex and dynamic system that can learn and adapt over time. Having identified the need to further promote the idea of connected business in Sri Lanka, WSO2, a leading global enterprise middleware company, kicked off this week its 2014 Asia Conference in Colombo. The conference was held for the third time in Sri Lanka. The three day conference held from 24 to 26 March, aimed at providing technology insights for a connected business. Attended by over 400 participants from the IT sphere, the WSO2 Conference 2014 Asia that was held under the theme ‘Connected Business’ featured top industry personalities such as Dialog Axiata Group Chief Executive/Director Dr. Hans Wijayasuriya, Commercial Bank Head of Innovation and Digital Financial Services Technology Rana Peries, and Virtusa Senior Vice President and Global Head of Engineering Chandika Mendia to deliver keynote addresses in addition to senior officials from WSO2 to share their expertise on connected business. Following the conference in Colombo, the event will go to Europe where it will be held in Barcelona from 16 to 18 June 2014, and the USA, in San Francisco from 27 to 29 October 2014.

The latter is about empowering the bottom and the middle of the pyramid consumers, which account for 90% of the emerging market. It is the value adaptation that might be needed to reduce the capability of the product. Taking the example of the mobile telephony, it started with post-paid services that offer a range of value-added services, allowing customers to access different packages. Then came the prepaid service which restricted this product. Customers had to pay in

advance but were able get any service they wished to have. It was a completely opposite approach and that was value adaptation. So how does this apply to technology adoption? According to Wijayasuriya, if one can innovate in the direction of value adaptation and manage to digitally empower and engage the bottom of the pyramid, then over time the digital bridge in the middle of the pyramid will undergo transition to the top of the pyramid of advanced technology. He noted that the mobile industry has had the luxury of seeing this over the last 15 years. It has applied the same formula time and time again on to successive generations of technology facilities and abilities of digital advancement. “If we were to adopt this approach, we need to ensure that we digitally empower with the value-adapted product, get on top of the pyramid, and be conscious of transaction between the two so we can build sustainable digital businesses that flatten the pyramid and create a more equal world. One might think that creating a more equal world is a philosophy, but as you all know, the more equal people are and the more equal technology makes people, the more value technology will bring,” concluded Wijayasuriya. Pix by Upul Abayasekara