PH’s GDP can increase by $8 billion in 4 years through digital transformation — study
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In the next four years, digital transformation is estimated to contribute $8 billion (P416.9 billion) to the Philippines’ GDP, with an increase in growth rate by 0.4 percent annually, according to an IDC study.
Microsoft, in partnership with IDC Asia/Pacific conducted the study “Unlocking the Economic Impact of Digital Transformation in Asia Pacific” among 15 countries in Asia, to examine the impact of digital transformation on traditional business models.
Digital transformation refers to the change that occurs when digital technology is applied to human society. It includes the use of digital products and services like mobility, cloud, Internet of Things (IoT) and artificial intelligence (AI).
Three percent of the country’s GDP came from digital products and services in 2017.
By 2021, 48 percent of Southeast Asia’s GDP is expected to be derived from digital products and services “with growth in every industry,” said Daniel-Zoe Jimenez, research director of Digital Transformation Practice Lead, IDC Asia/Pacific.
Of the 1,560 respondents which included business and IT leaders, 100 hailed from the Philippines.
Effect on labor, organizations
The benefits of digital transformation were mainly linked to improving employment. The leaders identified three key benefits to society, namely increasing personal income through freelance and digital work, higher value jobs and more training opportunities.
In the country, the most in-demand skills are big data, cloud computing and mobile development.
According to the country’s respondents, 92 percent of jobs in the Philippines will be transformed in the next three years while 65 percent of jobs will require higher value roles.
At least 84 percent of respondents claimed that their employees were equipped with the skills for the new roles.
For organizations, the top benefits included higher profit margins, greater productivity and cost reductions.
“Leaders” benefited twice as much as “Followers” when it came to strategizing and investing in digital transformation. Leaders were defined as companies with “full or progressing digital strategies.”
However, of the 93 percent of organizations undergoing digital transformation in the Philippines, only 7 percent of these could be counted as Leaders.
How organizations can lead in digital transformation
Top organizational traits were identified on how companies became leaders, which can serve as a guide to other organizations who aim to follow suit.
These include a culture which is less risk-averse, collaboration among departments and a dedicated business unit focused on digital transformation initiatives.
Allocating a budget for such initiatives and organizational alignment were also important to stepping up as a Leader.
It was found that Leaders focus on developing a “culture of agility and innovation” while Followers center on productivity and profitability.
Microsoft advised that the digital transformation journey “does not start with widespread change” but with “small, quick projects” that can become larger initiatives.
Companies must also look into creating a data strategy such that data should be shared within and outside the company “in an open yet trusted manner” which could even lead to AI initiatives.
Leaders, for instance, are “investing in big data analytics” to discover insights such as market trends or patterns that aren’t easily identifiable to make business decisions.
Equipping employees is also paramount with “future ready skill sets” identified as complex problem solving, critical thinking and creativity. JB
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