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Bridging the Gap: Challenges to Greater Digital Adoption in Asia Pacific

 The broader economic story in the Asia Pacific region over the last few decades has been one of near-uninterrupted success. However, challenges have emerged in recent years, including COVID-19 and economic problems in China that have sent shockwaves across the region.


As Asia Pacific's economies mature, the rate of growth has slowed. Industrialization helped the region reduce the gap with more developed economies, but further expansion will require a different approach that includes embracing digital technologies.


A recent BCW report titled Digital Transformation in Asia-Pacific Communications suggests that 71% of companies plan to increase their digital transformation investments by 2025. However, 49% of respondents indicate a lack of senior management support for enacting digital changes.


Economies are becoming increasingly complex and competitive. PWC reports that Asia Pacific countries must respond to these changes to stay relevant. They recommend “better data, deeper insights, and more efficient processes that empower new business models and create new revenue streams” as the pathway.


It’s clear that digital adoption across the region is crucial. However, several roadblocks to transformation must be addressed if the region wants to continue its promising trajectory.


Image by ijeab on Freepik



Challenges to digital adoption

On average, the pandemic accelerated digital adoption by three years worldwide. However, these gains were four years in the Asia Pacific region. This momentum is essential, and business leaders in the area must look to keep things going in the right direction.


However, there are macroeconomic challenges to be considered. Inflation and high commodity prices are threatening growth in the region. As the World Bank reports, Asia Pacific economies are caught in the trade-off between dampening inflation through fiscal policy and hampering economic growth. 


Furthermore, stalling growth in China is a huge concern. A failing property market, local government debt, and a shrinking population are not easy problems to solve. The IMF suggests that each point of growth in the Chinese economy provides a 0.3 boost to the rest of Asia, meaning leaders throughout Asia Pacific will be watching developments with great interest.


Despite these macroeconomic concerns, the outlook among CEOs is far rosier than it was in January 2023. An Ernst and Young CEO Outlook Pulse Survey shows that the number of leaders who expect a "a severe temporary or persistent downturn" has dropped from 54% to 32%. 


While volatility and regulatory risk are still a concern, CEOs are looking towards a brighter 2024, with more than 70% of leaders suggesting they will maintain or accelerate their digital transformation efforts over the next twelve months.


Let’s explore the five challenges to digital adoption across the Asia Pacific region and how businesses can address these issues.


#1. Uneven economic growth

IMF projections for the region demonstrate inconsistency in growth. Growth projections across the region for 2024 sit at around 4.4%. However, for advanced economies in Asia Pacific, average growth is 1.7%. For emerging and developing countries, average growth is 5.1%.


A tighter monetary policy will translate to lower investments across the region. However, per the World Economic Forum, it's vital that companies still make investments during an economic downturn. They suggest that things will improve eventually, and the companies that have focused on digital transformation will be in the best position to take advantage of growth.


An uncertain economic outlook can make businesses doubt their plans for digital investment. As a result, getting ROI on spending is essential. According to the IDC, digital investment in Asia Pacific will hit $1trn by 2026. For context, that's about double the amount of 2022 spent. These figures present a massive opportunity for software developers in the region. 


Digital adoption tools can help ensure that spending on software doesn't go to waste by teaching workers how to get the most from their work tools. 



#2. Workforce issues

Digital adoption is essential for businesses to stay competitive. However, it's not just about managerial change. Workers need to adapt and adjust to new tools. Depending on the industry, this can be a dramatic departure from traditional workflows.


Some economies, such as Malaysia, report a lack of qualified IT graduates, which is slowing down digital transformation efforts. Research suggests that while 3 in 4 Malays have basic IT skills, only 15% have the advanced skills to help digital adoption.


PWC’s Asia Pacific Workforce Hopes and Fears Survey underlines the problem. Only 57% of workers in the region are satisfied with their jobs, with 20% suggesting they want to switch employers. Retention is an issue that businesses across the globe are grappling with.


Employee onboarding software can help solve these issues by ensuring that new hires hit the ground running and feel supported in learning new tools. Furthermore, learning and development support can help employees feel valued and reduce churn across the organization.


#3. Choosing the right application

The World Economic Forum has much to say about the region's digital transformation. They suggest that "Every $1 dollar of Information Communication Technology (ICT) investment drives $13 dollars in GDP output."


The WEF suggests three strategies for delivering digital transformation across the Asia Pacific region. The first two are about developing green initiatives and making tech more accessible to traditionally underserved and under-engaged communities. However, the third is an integral part of digital adoption in general: developing inclusive applications.


The WEF suggests infrastructure investments like 5G are just the first step. After that, digital adoption requires better apps. 


Users approach digital products with different experience levels, familiarity, and learning types. Developers should make applications with as little friction as possible. Digital adoption platforms have a significant role to play here by helping with customer and employee onboarding that will help users get the most from digital technologies.


#4. Different attitudes toward digital transformation

Like any diverse region, digital adoption is happening at different paces. The pandemic saw digital transformation accelerate across Asia Pacific, but reports suggest that larger companies have embraced new technologies, while small to medium-sized (SME) businesses have not been as quick to invest in digital products. For example, a report on post-pandemic strategies among SMEs in Malaysia suggests that only 1 in 4 saw digital tech as a strategic pathway. 


Experts suggest that finances are to blame, with SMEs less likely to invest in digital technologies. However, these discrepancies between companies could make the digital divide more extreme. These problems speak to the need for user-friendly and cost-effective tools that enhance inclusivity.



#5. User experience 

A recent McKinsey report highlights how user experience is a key to adoption. Their research includes an intriguing statistic that suggests "60 percent of non-digital consumers use physical services because they are perceived to be faster or more convenient." A clear driver of production adoption will involve making users understand why digital products are faster and more convenient.


However, some research from the same McKinsey report says that "32 percent of Egyptian digital consumers find it difficult to use digital services and don't believe they offer the desired functionality". 


This figure is high and gets to the heart of making products that are intuitive and easy to adopt. What is important to note is that a similar sentiment is not shared across the region. A logical conclusion here suggests that intuitive software is not enough and that businesses and developers need extra steps to make digital adoption take off across the region. Once again, the situation highlights the importance of digital adoption tools to help bridge the gap and create competence and buy-in for work tools, apps, and other digital properties.


Final thoughts

The Asia Pacific region stands at an important juncture. Governments and business leaders in the area must find ways to keep up the momentum of exceptional economic growth. As world economies become more digital, extra efforts are required to stay competitive. Digital adoption platforms like Usetiful are at the heart of this change by ensuring businesses in the region have the customer and employee onboarding tools they need to unlock the benefits of digital tools. 


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