By 2021, Singapore's GDP is expected to grow by $10 billion due to digital transformation.
The finding is part of 'Unlocking the Economic Impact of Digital Transformation in Asia Pacific', a study by IDC, commissioned by Microsoft, looking at the impact of digital transformation on companies, society and the economy.
Based on responses from 1,560 senior business leaders across 15 APAC nations, the study concluded that Singapore's GDP would grow by 0.6% annually as a result of a digital transformation, which covers the evolution of processes, competencies, and business models that leverage the opportunities granted by digital technologies.
“Within the next four years, we expect to see approximately 60% of Singapore’s GDP to be derived from digital products and services,” said Kevin Wo, managing director of Microsoft Singapore.
Wo said that 10% of Singapore's GDP in 2017 was derived from digital products and services such as mobility, cloud, Internet of Things (IoT), and artificial intelligence (AI).
The study concluded that the top five gains of digital transformation in the APAC region would include higher profits, enhancements in productivity, an increment in revenue from new products and services, an improvement in customer advocacy, and reductions in cost for the long run.
The speakers acknowledged that while digital transformation will have a short-term negative impact on society as a result of the eradication of repetitive and manual jobs rife with human error, initiatives from governments such as Singapore's SkillsFuture will be critical in enabling future readiness for any nation willing to attain a head start.
Ralph Haupter, president of Microsoft Asia, said that the government of Taiwan undertook a similar initiative, co-investing $500 million with Microsoft to develop an AI lab intent on enabling local businesses and SME's with AI first capabilities and advantages.
Microsoft regards leaders of digital business transformation as companies that derive a third of revenue from digital products and services. It said these companies have quantified improvements in their business by 20% to 30%.
Leaders were also classified by shared perspectives such as a concern for disruptive technologies, striving for business agility, a focus on measuring digital transformation success, self-awareness of challenges in the digital transformation journey, and an investment across AI and IoT.
“The pace of digital transformation is accelerating, and IDC expects that by 2021, at least 60% of Asia Pacific GDP will be digitalised, with growth in every industry driven by digitally enhanced offerings, operations and relationships,” said Daniel-Zoe Jimenez, research director at IDC.
Singapore’s Infocomm Media Development Authority recently partnered with Microsoft Singapore to help with its Industry Transformation Map, relying on the technology company to help it reap the full benefits of accelerated digital transformation.
Ho said that businesses in the APAC region that want to stay ahead of the disruption curve need to invest in creating a culture that is digital-first and open to failure while betting on AI and helping their employees and partners develop the skills they need for the future.