Bridging divides – inspiring ways technology can transform Asia’s emerging economies
Originally published on LinkedIn
Is technology the great enabler?
In the midst of recent negative commentary around emerging market growth, a recent report from The World Bank predicts that Asia and the Pacific region will remain resilient over the next three years. China is expected to sustain growth at 6.5% in 2017, with the rest of “developing” East Asia to rise from 4.8% now to 5% growth during the same period. India’s emergence as the world’s fastest growing economy at over 7% is well documented.
Most interestingly to me, the World Bank recommends that regional countries “continue to harness the potential of technology in transforming financial services so as to increase financial inclusion” among citizens. The link between economic growth and technology is very evident in this recommendation.
It’s this kind of focus on technology matched with business, community, and government leadership which inspires me. Areas of special interest include the potential for technology to help transform and lift Asia’s emerging economies, the ability to improve healthcare and education outcomes, and to solve some of the daily issues of citizens.
Emerging economies can and should leverage technology to leapfrog traditional development paths
I keep a close watch on these areas, and retain some interest in tech startups in these industries. This is centred on the belief that emerging economies can and should leverage technology to leapfrog traditional development paths, which plainly – and at times naively – are expected to follow what developed economies have gone through. With the benefit of technology, imagine the possibilities further innovation in healthcare and education can deliver to the economy as well as to the average citizen.
China and India is a great case in point: technology has helped these two large countries to build telecom infrastructure faster and more efficiently than developed economies.
Mobility is also playing an important transformative role. The rapid and significant penetration of cellular phone technology in China and India is a great case in point: technology has helped these two large countries to build telecom infrastructure faster and more efficiently than developed economies. Echoing the World Bank’s recommendations, a new report from the McKinsey Global Institute states that digital finance – delivering financial services by mobile phone – could benefit billions of people across the developing world. They point to transformation of the lives and economic prospects of individuals, businesses, and governments to the tune of $3.7 trillion in added growth to the GDP of emerging economies within a decade.
Tech innovation in the world’s fastest-growing economy
India’s place as the fastest growing economy in the world, represents in some respects the full gamut of Asia’s opportunity, along with parallel issues to overcome. Technology provides a yardstick of the burgeoning middle class according to the Harvard Business Review: 130 million Indians will make an online purchase in 2016 (up 76% from last year), while the number of people with smartphones has soared to over a quarter billion (from a few million) in less than three years.
It’s encouraging to see progress covered in another report from the McKinsey Global Institute, which describes how technology is helping to accelerate the economic growth needed to underpin better-paying jobs and improved standards of living. Alongside digital technologies are other high-value industries such as energy and genomics. As these innovations are commercialised, we should see a lift in productivity and services across developing economies.
I’m particularly optimistic about the potential of technology to improve education and healthcare.
I’m particularly optimistic about the potential of technology to improve education and healthcare. McKinsey estimates that remote learning in India could have an economic impact of as much as $90 billion a year by 2025 thanks to higher productivity among a larger number of skilled workers. High school and college-educated workers in India should also skyrocket by 2025.
By way of example, IoT sensors in medical devices will soon combine with mobile Internet hosted in the cloud to monitor patients and remotely alert medical workers to emergencies. This isn’t technology for technology’s sake: healthcare IT advances can save Asia’s emerging economies billions every year in costs, while giving poorer communities access to better healthcare.
Healthcare IT advances can save Asia’s emerging economies billions every year in costs, while giving poorer communities access to better healthcare.
Remote healthcare can help deliver higher quality health outcomes to rural communities, well above and beyond what they have access to today. Similarly, connecting rural students with the best available education content and options is already underway. There are many experiments and companies focusing in this area, I am happy supporting it in my own small way with my angel investments. The innovations on the horizon in both areas look really exciting and I can see radical changes in the way healthcare and education will be delivered very soon.
Nowhere else in the world has e-wallets and digital payment technology been pitchforked into the centre of a major economic transformation of a trillion dollar economy…
Global commentators have also noted developments with the Indian Aadhaar project. This digital identity venture for citizens is leading the world in biometric ID credentials. As long as the correct modifications are made to accommodate cultural considerations or differences, similar systems could be equally as effective in other countries or regions. While India, as per many emerging countries, has a cash economy which comprises approx. 20% of GDP, such digital identity systems have the potential to remove the fees, middle-man cuts and charges which arise from multiple intermediaries handling transactions. This will help make the distribution of wealth more efficient and equitable to a much larger majority of individuals. Indeed, with the recent demonetisation decision, the Indian Government has banked on technology (pun intended!) to make it work. Nowhere else in the world has e-wallets and digital payment technology been pitchforked into the centre of a major economic transformation of a trillion dollar economy… not to mention the accompanying political debate. It will be interesting to see how this will play out.
Accentuating more positives
A 2015 research study from Microsoft revealed that emerging economies in Asia are making good use of innovation and technology such as cloud computing and digital productivity tools. Small-to-medium sized businesses are increasing their overall competitiveness in the region by embracing new technologies, with Indonesia, Vietnam and Malaysia among the front-runners.
I strongly believe technology can and should help deliver maximum positive impact to more disadvantaged parts of populations.
Bridging divides across emerging economies is a journey, with no shortage of potential and inspiring projects already under way. There will be new and unforeseen challenges along the pathway, but I’m confident that new technologies – combined with good leadership and strong governance (like the move towards a cashless economy underway in India) – have the potential to dramatically and positively affect outcomes for citizens, communities and businesses across the region. Through all of this, I strongly believe technology can and should help deliver maximum positive impact to more disadvantaged parts of populations. That’s a win no government can ignore for too long.