Digital products to boost Singapore GDP by $13.2b

Bosses are seeing greater profits and productivity after their firms upgraded to digital.

Nearly $13.2b (US$10b) will be added to Singapore's GDP thanks to digital products or services by 2021, Microsoft said.

In 2017, about 10% of Singapore’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).

Microsoft Singapore managing director Kevin Wo said, “Singapore is clearly on the digital transformation fast track. Within the next four years, we expect to see approximately 60% of Singapore’s GDP to be derived from digital products and services. At the same time, organisations in Asia Pacific are increasingly deploying emerging technologies such as artificial intelligence as part of their digital transformation initiatives, and that will accelerate growth even further.”

The study identified five benefits that organisations get after going digital: higher profit margins, greater productivity, increased revenue, improved customer advocacy, and more cost reduction.

According to the research findings, business leaders are already seeing 17% to 20% improvements across these benefits from their efforts today, and they expect to see more than 40% improvements in those key areas by 2020, with the biggest jump expected in customer advocacy.

The study indicates that whilst 98% of organisations in Singapore are in the midst of their digital transformation journey, only 7% in the entire region can be classified as Leaders. These are organisations that have full or progressing digital transformation strategies, with at least a third of their revenue derived from digital products and services. In addition, these companies are seeing between 20% - 30% improvements in benefits across various business areas from their initiatives.

The study indicates that Leaders experience double the benefits of followers, and these improvements will be more pronounced by 2020. Almost half of Leaders (48%) have a full digital transformation strategy in place.

Respondents in Singapore felt that 93% of jobs will be transformed in the next three years due to digital transformation, and 62% of the jobs in the market today will be redeployed to higher value roles or reskilled to meet the needs of the digital age.

This is highlighted by a previous report that said 32% of workers think that digital and technological changes could lead to job displacement. To quell their fears, workers said they want to learn technologies like blockchain, cloud tech, and big data.

Wo added, “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 percent of the study’s respondents are confident that their young professionals already have future-ready skills that will help them transition to new roles. Governments and organisations should still focus on reskilling and upskilling, because continuous learning will be important in ensuring a successful workforce transformation for the digital age."