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Digital transformation to contribute US$10b to Singapore's GDP by 2021: study
DIGITAL transformation in the economy will add an estimated US$10 billion to Singapore's gross domestic product (GDP) and increase GDP growth at an annual rate of 0.6 per cent by 2021.
These findings come from a study published by tech giant Microsoft and market researcher IDC Asia on Wednesday.
The study, Unloc king the Economic Impact of Digital Transformation in Asia-Pacific, surveyed over 1,500 business leaders in mid- and large-sized organisations from 15 countries and territories in the Asia-Pacific, of whom 100 respondents were from Singapore.
As digital technologies continue to play a bigger role in the economy, digital products and services created directly through the use of digital technologies - such as cloud-related products and artificial intelligence (AI) - are poised to make up 60 per cent of the country's GDP by 2021, up from 10 per cent in 2017.
Moreover, the findings revealed that 98 per cent of the organisations surveyed in Singapore have already embarked on digital transformation initiatives.
From the study, Microsoft and IDC identified five benefits that local firms have gained from digital transformation initiatives. According to the firms, adopting them has resulted in higher profit margins, greater productivity, increased revenue from new product offerings, improved customer advocacy and cost reduction.
Said Microsoft Singapore's managing director Kevin Wo: "Singapore is clearly on the digital transformation fast track ... at the same time, organisations in Asia-Pacific are increasingly deploying emerging technologies such as AI as part of their digital transformation initiatives, and that will accelerate growth even further."
In addition, the local business leaders surveyed felt digital transformation holds additional economic benefits such as increased educational and training opportunities, the creation of higher-value jobs, and opportunities to take up digital-related freelance work.
Unsurprisingly, respondents here felt that 93 per cent of jobs in Singapore will be transformed in the next three years and 62 per cent of the jobs in the market will be redeployed to higher-value roles or reskilled to meet the needs of the digital economy.
"The rise of digital transformation in Singapore will affect the labour market where many types of jobs will evolve and change. What is encouraging is that 83 per cent of the study's respondents are confident that their young professionals already have future-ready skills that will help them transition to new roles," Mr Wo explained.
Despite the high uptake in digital transformation in Singapore, only 7 per cent of companies in the region were considered leaders in this area.
"There is a pressing need for organisations to adopt a leaders' mindset to fully build their digital ecosystem - from employees, to customers, to partners - in order to grow their value chain," Mr Wo commented.
Organisations in Asia-Pacific will need to accelerate their digital transformation journey to reap the full benefits from their initiatives, and to address the invisible revolution brought about by the mass adoption of AI, the report said.
In order to be a digital transformation leader, Microsoft suggested companies create a digital culture, build a digital ecosystem, embrace micro-revolutions, bet big on AI and develop future-ready skills for individuals and the organisation.