IDC: Digital shift to add $9bn to GDP
Region expected to transform quickly
Digital transformation should add 0.4% compound average growth annually to Thailand’s GDP for an estimated US$9 billion (284 billion baht) by 2021, says Michael Araneta, associate vice-president of IDC Financial Insights.
The company’s study, “Unlocking The Economic Impact of Digital Transformation in Asia-Pacific”, commissioned by Microsoft, said last year 4% of Thailand’s GDP was derived from digital products and services created directly through the use of digital technologies, such as mobility, cloud, Internet of Things (IoT), and artificial intelligence (AI).
By 2021, it expects to see 40% of Thailand’s GDP derived from digital products and services.
However, IDC anticipates organisations in Asia-Pacific will increasingly deploy emerging technologies that will accelerate growth even more, up to at least 48% of GDP.
“Higher profit margin, greater productivity, improved customer advocacy and increased revenue from existing and new products and services are the main benefits of digital transformation in Thailand,” said Dhanawat Suthumpun, managing director of Microsoft Thailand.
The study had 1,560 business decision makers respond across 15 economies in Asia-Pacific, with 100 respondents from Thailand.
The study indicates leaders who adopt digital transformation first will experience double the benefits of followers, and these improvements will be more pronounced by 2020. Almost half of leaders have a full digital transformation strategy in place.
Mr Dhanawat said companies need to focus on capitalising on their own data in order to gain new market insights, create new digital products and services, and monetise data through sharing data securely and in collaboration with their ecosystems.
He said the survey found the top challenges for Thailand’s digital transformation are a lack of workforce skills — in AI, IoT, and robotics — organisational culture that needs to adapt to change, continued learning, and leadership.
Mr Dhanawat said the study identified key differences between leader firms and followers, finding the former are more concerned about competitors and emergence of disruptive technologies such as AI.
Business agility and innovation culture are key goals, measuring digital transformation successes by adopting new key performance indicators to better measure digital transformation initiatives, such as effectiveness of processes, data as capital, and customer advocacy in the form of a Net Promoter Score. Leader firms are much more focused on leveraging data to grow revenue and productivity, and to transform business models.
Leaders are more aware of challenges in their digital transformation journeys such as skills and cybersecurity threats that bolster their data capabilities through advanced analytics.
Mr Dhanawat said crucial technology investments for digital transformation in 2018 will be in core technologies including cloud, big data, mobility security, and emerging technologies such as IoT, AI/ robotics, virtual reality/augmented reality, next generation interface and blockchain.
According to the survey, digital transformation will bring about the creation of more higher-value jobs and smarter, safer and more efficient cities, from potential increments to personal income through freelance and digital work.
Respondents in Thailand felt 95% of jobs will be transformed in the next three years because of digital transformation, while 65% of jobs in the market today will be redeployed to higher value roles, or reskilled in order to meet the needs of the digital age.