Regardless of size or industry, most companies today offer digital products or services or digitally engage with their customers, partners and employees. As technologies — such as cloud, 5G, and edge computing — continue to advance and gain mainstream adoption, a shift from a digital economy to a digital-first economy.
A digital-first economy (DFE) is one where gigabit broadband infrastructure will deliver real-time, ubiquitous computing power everywhere, according to the recent Digital First Economy white paper Huawei commissioned for the International Data Corporation (IDC).
Fully autonomous systems will drive industry, and a much more significant portion of our lives can take place in the digital world. Besides that, a digital-first economy will see broad adoption of renewable energy and effectively harness massive data for economic growth, resiliency and competitiveness.
“A DFE is crucial for Asia Pacific’s economic recovery and development. It drives rapid, green growth through the use of digital technology and digital infrastructure, prioritising the development of the digital economy as part of the wider national GDP growth,” says David Lu, president of strategy and marketing for Huawei Asia Pacific, in an interview with DigitalEdge on the sidelines of the Huawei Connect 2022 event in Bangkok recently.
Economies in the Asia-Pacific (APAC) region are very diverse. Although most have issued national digital strategies and started embracing digital technologies, their level of digital infrastructure and preparedness for DFE differs. Lu explains that there are four stages of DFE readiness according to the output of the DFE Index in the whitepaper. They are:
- Adopter: Countries in this stage are starting to develop their digital economy, and the most significant gap is between their digital connectivity and policy. Adopters need to build a more comprehensive digital masterplans to increase connectivity and digital infrastructure, as well as improve network throughput speed. Most APAC developing economies are currently in this stage, including Cambodia, Indonesia, and the Philippines.
- Accelerator: These nations, such as Malaysia and Thailand, have a robust ICT infrastructure and prioritise increasing investment in ICT and talent development. “To progress to the next stage, accelerators should] focus on developing appropriate policies and approaches to drive growth in the digital economy. [They will also need to] build digital connectivity such as 5G networks to drive cloud computing, and [look at] data assets monetisation,” advises Lu.
- Advanced: Countries that fall under this category, like Singapore, focus on in-depth digital transformation and using data to create new economic value.
- Aspirational: Strong integration of digital intelligence in all aspects of the economy is needed here. “APAC economies have yet toreach this stage. But if we adopt the proper digital strategies, the region will begin entering this aspirational stage in the next 10 years,” says Lu.
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Five building blocks of a DFE
Improving DFE readiness is expected to have a multiplier effect on GDP growth. According to the white paper, a one-point increase in DFE score correlates with a 3% growth in GDP. Additionally, every US$1 ($1.43) ICT investment drives US$13 in GDP output.
APAC economies must build and execute digital master plans, which include digital infrastructure and sustainable development targets as well as the provisioning of more significant spectrum resources and financial support if they want to bring their digital economies to the next level. “The plans should be clearly defined to provide direction and guidance for ICT infrastructure construction while complying with local policies and regulations,” says Lu.
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Secondly, countries in APAC should encourage ICT spending by incentivising public and private investment in frontier technologies, ICT infrastructure, and digital talent.
Lu states: “The shortage of digital skills and talent, as well as the lack of ICT investment, will impose significant constraints on the digital transformation of industries, which in turn impacts the digital transformation of the entire economy. So ICT investment and talent development levels must be enhanced to build up capabilities to drive digital transformation [as a whole].”
Thirdly, digital connectivity needs to be improved, so APAC nations should build ultra-broadband, intelligent network infrastructure (such as gigabit-level full fibre and 5G networks) and boost network coverage to ensure inclusive, reliable access for all.
“Network connectivity is like water and electricity: it is essential and should be universal so everyone can enjoy basic services. At the same time, immersive extended reality and metaverse services will require higher quality connectivity and faster uplink speeds, as well as higher requirements on latency,” says Lu.
“Digital connectivity needs to achieve wider coverage. Connecting the unconnected and delivering higher bandwidth throughput to improve the quality of the experience using digital tools is essential to open access to cloud-first Anything-as-a-Service and other high-value digital services.”
Fourthly, APAC economies should promote cloud adoption. They can provide cloud-first policies and support for cloud migration to accelerate vertical industry digitalisation.
Finally, there is a need to invest in data hubs and artificial intelligence (AI), focusing on data hubs that promote data sharing while ensuring effective data governance. “More cloud computing workloads will create more data assets for citizens, industries, and governments. These data assets can be analysed and monetised through AI to drive the next phase of DFE’s growth,” adds Lu.
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Supporting APAC’s DFE progress
By building and solidifying their digital infrastructure, APAC economies will see more robust GDP growth, encourage new business models, and improve their digital resiliency against future disruptions. They can also expect to enhance digital inclusion so that everyone can share the benefits of digital technologies and achieve a green, sustainable future.
Table: Huawei
Huawei is helping APAC economies strengthen their DFE foundation and improve digital inclusion through its RuralStar solution, which brings voice and broadband data services to hard-to-reach communities.
“RuralStar uses low power and its power supply of solar. It can be easily installed on the poles and is a very cost-effective solution to provide connectivity and broadband in remote areas. As of 2021, RuralStar has been deployed to more than 110 networks in 70 countries, bringing more than 60 million people to the digital world,” says Lu.
He continues: “[To overcome the issue of inflation and future-proof their economic competitiveness,] every country should push forward targeted DFE development policies and planning recommendations, focusing on ICT digital infrastructure to drive GDP growth.
“Huawei [will continue to] strengthen cooperation in 5G, cloud services, and AI technologies, to become a strategic digital transformation partner and a key digital economy contributor to all APAC countries.”
