Tech transformation, flexible work and environmental progress: three reasons to be optimistic about 2022

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AhmedBy Ahmed Mazhari, President, Microsoft Asia

As we welcome the start of 2022, I’ve been thinking about the changes, challenges and opportunities we might see over the next 12 months. Personally, I feel there’s good reason for optimism, and I expect we’ll have many reasons to feel upbeat over the next year.

Many of us have mixed feelings about 2021, but I think it has set the stage for a transformational year ahead; one where technology will play a leading role as we recover from the pandemic and realign our priorities to empower innovation and a more sustainable future for Asia.

I recently spoke with Amit Gupta who was a guest on my regular video interview series Q&Ahmed. He’s a market analyst and the CEO of Ecosystm, a Technology Research and Advisory Firm here in Asia. He has a special interest in innovation and startups, and is the President of TiE Singapore, a non-profit that inspires entrepreneurs through its training, mentoring and networking programs. As we discussed our outlook for 2022, we identified a few trends we think will shape the year ahead.

Digital native tech innovation will transform the business landscape

Over the last few years we’ve seen a new vanguard of born-in-Asia digital native businesses reshape tech in this region. And I believe we’re on the cusp of another digital transformation in Asia. It is led by Asian businesses who are catering to a young, tech-savvy audience that’s both mobile and social. They’ve created local solutions for local problems. In doing so, they have become tech leaders.

As Amit pointed out: “Asia has seen digital emerge as the great equalizer. We’re no longer behind the curve when it comes to intent or implementation. It’s estimated that 60% of the world’s youth today live in Asia. This is the new digital native population that forms the customer base for businesses.”

We’re seeing new models of e-commerce, innovation among fintechs, new types of social media, and the emergence of super-apps having a huge impact both in Asia and globally. Asian companies now file 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. Grab is just the latest born-in-Asia unicorn to complete its Initial Public Offering in the US.

I expect we’ll see more born-in-Asia businesses having a huge impact well beyond their market cap. They will fuel growth and accelerate productivity and efficiency. And in this increasingly competitive environment, incumbent businesses will have no choice but to respond with their own digital transformation.

It sounds almost paradoxical, but some companies stumble over their own success, and falter by refusing to take chances on bold ideas, even though that’s what made them successful to begin with. Amit says that’s no longer an option. These businesses will need to catch up to the new market leaders.

“I don’t think businesses have a choice. Let’s just say that the pandemic will, for lack of a better way to put it, purge and sift out companies that have not yet adapted or are not adapting and I think the ones that will succeed are the ones that will evolve their business models around the new paradigm of digital,” he said.

Hybrid work will work better for everyone

Microsoft employees this year will begin to return to offices on a flexible basis as we embrace our hybrid work model. And we’re certainly not the only company that is leaning into flexible work arrangements. To say that hybrid work is here to stay seems so self-evident that we can’t really even call it a prediction, it’s just reality.

Over the short-term, there’s not really much choice. Our own offices are subject to different restrictions in different jurisdictions, which we expect to continue for now. But our view is that operating with a hybrid model is a good thing regardless. It’s a positive evolution of work, and if we do hybrid right, we can create better workplaces that cater to people’s needs. I predict that businesses will get much better at it in the year ahead, and Amit agrees.

“We may no longer be limited by borders, whether it’s as an employer or employee, and more importantly, the younger workforce is demanding flexibility. The hybrid model will attract these digital natives. And isn’t that what digital organizations want?”

Hybrid work comes with challenges. There are security issues, as more connected devices create more avenues to attack, and this will require organizations to invest in software and training to help keep data secure. In some creative fields, there are clearly advantages to collaboration in person. But these aren’t insurmountable problems.

The vast majority of employees want more flexible remote work options, but also say they want more in-person collaboration, post-pandemic. Some have called it a paradox, but maybe it just reflects the fact that workers want the best of both worlds. And a sensible approach to hybrid work can deliver it, and result in this flexibility becoming a clear competitive advantage in attracting and retaining talent.

Who’s keeping score? Adding accountability to sustainability

Many saw the COP26 climate conference in Glasgow as a disappointment; a fitting end to a year that failed to deliver on its initial hope. But actually, there were some very consequential agreements at Glasgow, namely a plan to slash methane emissions, the first ever plan to explicitly reduce the use of coal, and perhaps most significantly, a commitment from the finance world to help reduce emissions.

The last one is a great indicator of what we’re likely to see in the year ahead. Businesses no longer see sustainability as optional. They are stepping up and actively trying to make a difference. We know this because sustainability comes up in almost every customer conversation we have. Decarbonizing the global economy will take years, but it’s already clear that we’re heading in that direction.

And we think greater accountability is something that absolutely must be at the forefront of environmental commitments. Microsoft is a leader in this area. We are committed to transparency and we report regularly on our own pledge to be carbon neutral by 2030. And this year we introduced Cloud for Sustainability to help other organizations reach their own goals. Amit says it’s important that we start to establish clear and consistent standards.

“Corporates need to ensure complete transparency in their sustainability efforts. The sad truth is that many of these green ratings are unfortunately based on self-reporting. Once the metrics become universal and transparent, we will move more actively towards our sustainability goals. But again, one of our biggest priorities is really getting to consistent definitions and disclosures across jurisdictions and hopefully COP26 created the right impetus for us to move towards it,” Amit said.

A promising year ahead

More environmental accountability, digital agility and flexible workplaces are just starting points. This year, I hope we’ll continue to see passionate and purpose-driven innovators using tech to make real impact for Asia and the world. I trust we’ll see more people thriving in hybrid work. And I look forward to seeing more progress on some of the more intractable social issues we face in this region.

There are many reasons to feel optimistic about 2022, and I wish you all a safe, fulfilling, and successful new year ahead.

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