Digital transformation will add US$1 trillion to Asia Pacific by 2021

A new study has found that by 2021, digital transformation will add an estimated US$1.16 trillion to Asia Pacific’s gross domestic product (GDP).

The research, which has been produced by Microsoft in partnership with IDC Asia/Pacific and is entitled Unlocking the Economic Impact of Digital Transformation in Asia Pacific, predicts an acceleration in the pace of digital transformation across Asia’s economies.

The survey, which gathered insight from 1,560 business decision makers in mid and large-sized organisations across 15 economies in the region, highlights the widespread disruption that digital transformation is having on traditional business models.

In 2017, approximately 6% of the region’s GDP was derived from digital products and services created directly through the use of digital technologies, such as mobility, cloud, internet of things (IoT) and artificial intelligence (AI). However, this is expected to increase to around 60% of Asia’s GDP by 2021.

By 2019, IDC predicts that 40% of digital transformation initiatives will be supported by AI and cognitive capabilities, providing critical insights for new operating and monetisation models in Asia Pacific, excluding Japan.

“Digital transformation has a positive and measurable impact on Asia Pacific’s economy, and it is widely regarded that every organisation needs to be a digital one,” said Ralph Haupter, president of Microsoft Asia. “In fact, organisations are seeing tangible improvements from their digital transformation initiatives between the ranges of 15% to 17% today, which shows that digital transformation is no longer an idea, but a reality.”

“We see AI as a primary catalyst for further growth,” he added. “Our customers across Asia are already demonstrating a strong sense of urgency to integrate AI into their business as part of their digital transformation initiatives. The study shows that AI is top of mind when it comes to investing in emerging technologies today.”