By Ahmed Mazhari, President, Microsoft Asia
Asia has a growing middle class which will include 3.5 billion people by 2030. Most of them have been added in my lifetime, which is a testament to the incredible power of economic transformation. Technology has helped to turbo-charge this economic progress. Not just because the tech sector routinely grows faster than the broader economy, but also because it powers innovation in other sectors, opens new markets and boosts productivity. And innovation needs innovators – people with bold ideas coupled with the expertise and ambition to pursue them. That’s why it’s so promising to see how greater access to technology and training is expanding the region’s talent pool, which will be fundamental to continued innovation and sustainable economic recovery.
As we emerge from the pandemic, we’re on the cusp of another transformation. This one is led by a vanguard of Asian born-in-the-cloud startups and businesses who might owe as much to Shenzhen, Bangalore, Singapore, and Sydney as they do to Silicon Valley. Asian companies filed more patents than US and European companies combined and Asia is now the largest R&D investing region in the world with more than 44% of global R&D share.
This new breed of business will be essential to helping Asia recover from the pandemic and for powering growth in the years ahead. It’s a shift from solutions or products simply being ‘Made in Asia’, to being ‘Born in Asia’, where this region is no longer seen as the factory of the world, but a place where ideas and innovations originate.
How Asia’s tech companies are different
If you live in Asia, you might know some of the names already: Lazada, Grab, Alibaba, Afterpay, Bukalapak, Tencent, JD.com, Reliance Jio, GoJek, Shopee and Coupang, among others.
While Lazada bears a passing resemblance to Amazon and Grab might look similar to Uber, they’re very different. In Asia, mobile leapfrogged other forms of connectivity and helped to shape a tech-savvy but demanding generation of consumers, who demanded mobile-first services. Mobile became the platform of choice for innovation.
In China, by some measures more goods are now sold on mostly mobile e-commerce platforms than in stores, and e-commerce elsewhere in Asia is catching up. Asian e-commerce retailers have improved customer experience through social marketing and livestreaming sale events – practices which western companies are starting to adopt. China’s e-commerce apps have also created an entire payments and finance ecosystem in their wake.
Super apps are another Asian innovation. They started with China’s e-commerce apps, but Southeast Asia’s mobility apps are now taking customers’ whole lifestyles online. Originally a ride share app, Grab has expanded into food delivery and financial services and is now southeast Asia’s best-known super app. These super apps are disrupting existing business models. Even Japan’s 7-Eleven has announced it will start to deliver. In the age of on-demand delivery, even a convenience store isn’t convenient enough.
TikTok, a mobile-first short-form video app, is the first Chinese social platform to go truly global. It has more than twice as many users as Twitter, and US-based social media giants have started to add features similar to those that made TikTok popular. The gaming industry has been shaped by Asian gamers who play across multi-devices – console, PC and mobile. Tencent is the world’s biggest gaming company, and invests in dozens of others.
Tech powers inclusive growth
So how will this new generation of tech businesses help to transform Asia’s economy?
Innovation has a lengthy record of driving change in Asia. The Asian Development Bank says digital innovation alone accounted for nearly 30% of GDP growth in Asia over the two decades to 2019. And Asia is now home to seven of the world’s top 10 economies in terms of the technology sector’s contribution to the wider economy. If anything, these numbers underestimate the impact, because tech fuels efficiencies in other sectors and creates positive pressure for other businesses to accelerate their own digital transformation.
The pandemic has demonstrated how these companies might start to address some of the region’s most pressing social and economic inequalities. Although the biggest acceleration of digital solutions has been in countries that already have a well-developed digital ecosystem, there has been progress elsewhere too. We have seen an explosion of new telehealth applications that make care possible for people in remote areas in China and India. Digital wallets have grown dramatically in countries like the Philippines for people without access to banking. New startups have attempted to improve financial access in India. Education has shifted online almost everywhere.
The International Finance Corporation predicts emerging markets will see greater “adoption of disruptive technologies and a proliferation of online business models and platforms” in the years ahead.
These new technologies will generate new jobs. But growth is more meaningful if local talent can supply the skills to fill those positions. Asia is already home to some of the best and brightest minds in tech, but there is a skills gap for tech talent here, as there is globally. Digital upskilling initiatives supported by industry and government are now opening doors for new career opportunities for a wider group of people to secure jobs in the digital economy. We’re committed to partnerships and region-wide digital upskilling initiatives so that we can deepen and diversify the talent pool in Asia, and develop experience locally that will continue to create world-leading products and services.
This includes a commitment to making tech more diverse. For example, we have just launched a partnership with She Loves Tech – a global platform committed to closing the funding gap for women entrepreneurs. The partnership spans 15 countries and aims to unlock US$1 billion in capital for women-led businesses by 2030. The partnership will provide a variety of tech tools, as well as mentorship and access to a global ecosystem of industry experts.
This is in addition to a separate inclusion initiative, Code; Without Barriers, which is a partnership between Microsoft and 13 companies across nine Asia-Pacific markets to help close the gender gap in the region’s fast-growing cloud, artificial intelligence (AI) and digital technology sectors.
Inclusive growth is the tide that lifts all boats, and we’re optimistic that our inclusion initiatives as well as the growth of born-in-Asia companies will make a real difference.
Asia’s progress is the world’s progress
Microsoft is a natural partner for both startups and transformative enterprises. We already partner with many of Asia’s most exciting tech businesses, and we only expect these partnerships to grow. Increasingly, we’re a cloud-based business. Our cloud, security, data, and AI solutions empower organizations of all sizes and across industries to meet new customer demands and create new revenue streams.
Technology has powered much of Asia’s growth over the past two decades. We hope this will not only continue but accelerate as new innovations build on existing ones and demand for better technology grows. The world needs tech-powered growth, and Asia may lead the way as an engine of innovation in the decades to come.
Microsoft is proud to play a part in that story.