Three quarters of Asia-Pac businesses consider themselves disrupted by tech change: Baker McKenzie
A full three quarters Asia Pacific-based business leaders surveyed describe themselves as being disrupted, rather than a disruptor, amid accelerating technological change, said Baker McKenzie in a report.
The law firm said these businesses, which are often launched before the advent of the internet, are struggling to adapt and compete against new entrants born of the online era.
This is as 30 per cent of respondents admitted they are barely keeping pace with new technologies, while only 25 per cent said they are highly adept at exploiting the benefits of new technologies.
"Technology-driven disruption is affecting every industry, even those that previously assumed their sector to be immune,” said Adrian Lawrence, head of technology, media and telecoms, Asia Pacific, Baker McKenzie. “Firms that are failing to appreciate that disruption requires a top-down, across the business response are falling behind and risk reaching a point where they will never catch up."
The report noted a direct correlation between companies that describe themselves as highly adept at maximising technological benefits, and those describing their organisations as driving technology changes; one in four Asia Pacific executives claims to be both.
Accelerating technological change is often accompanied with increasing risks. Theft of sensitive information – such as trade secrets and internal communications – is the main technology-related concern among executives across Asia Pacific (identified by 34 per cent of respondents).
Meanwhile, only 20 per cent of Asia Pacific business leaders describe themselves as “highly successful” in managing the risks from new technologies, while most executives question their ability to handle such risks.
The report also found that consumer goods and retail executives collectively describe themselves as the least successful at managing tech risk, despite likely access to a wealth of consumer data.
Regardless of their success levels, most respondents agree that there will always be hidden risks when it comes to new technologies. In the report, an executive in the technology, media and telecoms sector said that new risks will emerge as current technologies find new uses in different fields, industries and markets.
To get ahead of the tech curve, Asia Pacific companies said they will focus primarily on the capture and use of data - 68 per cent of business leaders identify big data as a key tech focus. This was followed by cloud computing, AI and client relationship management systems.
Companies typically tap on big data to provide data analytics on their customers, operational processes, amongst other uses.
"It is increasingly clear that those who win in terms of data, win in business,” Sonia Baldia, technology, media and telecoms partner and India specialist, Baker McKenzie, said. “Leading Indian companies, and multinationals basing their tech operations in India, are alive to this fact, and are preparing for the new data driven age with significant investments in processes and people."
While many businesses in Asia Pacific claim to be keeping pace with technological changes in their industries, senior executives in these companies see most regional and global regulators as lagging behind, noted the report.
The report found just 17 per cent of executives surveyed see regulators as ahead of the curve, while 46 per cent said regulators are well behind the curve.
That said, the report understands from the overall sentiment that policymakers introducing laws that inadvertently – or quite intentionally – create roadblocks for innovation, rather than them falling behind the curve, is the real problem for Asia Pacific businesses.
Singapore-based Stephanie Magnus, head of financial institutions, Asia Pacific, Baker McKenzie, said: “The relentless pace of tech change necessarily requires companies to work closely with regulators and policy makers to ensure that companies are heard in the policy-making process and have a sense of where legislation is headed.”
While in general, companies from no single economy collectively reported being particularly confident about the challenges posed by the pace of technological change, the report revealed that Indian companies are currently the most positive about technology in Asia Pacific.
According to the report, 31 per cent of Indian business leaders describe their organisations as “highly adept” at exploiting the benefits of new technologies, against 30 per cent in Singapore, and just 8 per cent in Malaysia.
Singapore companies are ranked among the top when it comes to managing risks brought by new technologies, with 73 per cent of them saying they are successful at managing such risks, compared to 60 per cent in Malaysia.
On average, Singapore-based executives are the second most confident in their regulators, with 22 per cent seeing them as ahead of the curve. Meanwhile, only 8 per cent of Malaysian business leaders said their regulators are ahead of the curve.
Singapore policymakers have worked diligently to recreate a Silicon-Valley-like environment, led by the government’s commitment to a strong intellectual property regulatory framework. Singapore boasts several other key ingredients that make it one of Asia’s top technological centers: modern information technology infrastructure; a highly skilled, tech-savvy workforce; and proximity to several of the world’s largest emerging markets and an East-West gateway for multinational corporations, noted the report.
The report added that tech change is unlikely to slow down in the 2020s, as 85 per cent of business leaders said technological change is accelerating, with 30 per cent further projecting an exponential rate of change.