Disruptive technologies for AEC need to be watched
In a recent study “Southeast Asia at the crossroads: Three path to prosperity”, McKinsey Global Institute highlights the relative low base in terms of digital infrastructure, adoption, and innovation of ASEAN member states with the notable exception of Singapore. If the Region, however, would put the necessary backbone infrastructure in place, it could harness the power of technology to drive productivity improvements. ASEAN’s low starting point implies that it has a larger opportunity for technology-driven growth than more developed regions.
Five closely related digital technologies are poised to create substantial economic growth and changes in society across sectors:
The mobile Internet can pave the way for productivity gains and more efficient delivery of vital services, provide the basis for geographical barriers and widen access to information, products and services to rural populations that have been excluded from technologies, including financial services, so far.
Big data or the ability to analyze huge volumes of data to extract insights and to act on them in close real time could be a source of advantage for the Region. To better cater to consumers, companies will need to understand increasingly granular micro-segments of their markets. For the Philippines, given its expertise in business process outsourcing and knowledge process outsourcing, it can provide data analytics for third parties. This goes from providing financial institutions with sophisticated risk-management data to sharing medical records, patient data and health care analysis.
The Internet of Things refers to networks of sensors and actuators embedded in machines and other physical objects that connect with one another and the Internet. Radio frequency identification, for example, can track products as they move through warehouses and transportation hubs to store shelves, allowing companies to tighten their supply chain to avoid stock-outs, excess inventory, and losses. GPS-enabled telematics can manage fleets and distribution networks in real time.
The automation of knowledge work fosters advances in artificial intelligence, machine learning, and natural user interfaces; it can go a long way towards filling gaps or empowering workers with less training to achieve greater impact.
Cloud technology offers companies across the region access to secure storage and infrastructure services, basic software, and enterprise systems at pay-as-you-go rates. Many small enterprises have limited access to IT services today, but cloud technology can give them new productivity tools without forcing them to tie up capital in IT systems. Given the fact that ASEAN is made up of SMEs, this technology is extremely important. Advances in cloud computing will also reduce the costs associated with storing and analyzing big data.
These five disruptive technologies, together with several sector-specific innovations like 3D printing, infrastructure design, advanced genomics in agriculture and healthcare, have the potential to unleash substantial economic impact in the years to come. Within many sectors, there is large value at stake for companies that move quickly to digitize their operations and carve out competitive positions.
Disruptive technologies can accelerate the Region’s growth and progress – and not only for its higher-income economies. To capture opportunity, however, policy makers need to prioritize building the backbone infrastructure and low-cost Internet access. These reasons are behind Philippine business advocacy for the creation of a Department of ICT. Additional challenges include establishing a policy framework for data sharing, online privacy, and cybersecurity as well as supporting SMEs in technology adoption.
By focusing on global trade, urbanization and disruptive technologies as drivers of future growth, the Region could be poised to make a leap forward in economic development. In all three of these areas, long-term thinking and investment by both public and private sectors could create immediate economic impact.
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