In the Asia Vision Series, we explore key industry trends and issues with our subject matter experts and visionaries. In this interview, Michelle Simmons, General Manager, Southeast Asia New Markets, Microsoft Asia Pacific, tells our writer Geoff Spencer why digital transformation in emerging markets in Asia is akin to running a marathon. She also says technology is opening the door to potentially massive social and economic benefits.
Running the digital transformation marathon in emerging markets
Sometimes someone can alter how you look at life in a most unexpected way and in a most unexpected place.
For Michelle Simmons, that person was Rose – a legally blind, but unstoppable, woman in her 60s who simply would not take “no” for an answer. And the place? A marathon event held in one of the world’s remotest corners – the western tip of Antarctica, just below South America.
Michelle was into running, but she lacked confidence in her own potential. The most she had ever run before had been 10 kilometers and this time she was only planning to take on a half-marathon. Like many people, she had regarded marathon runners as being super-fit, special, and even elite. “But Rose was older and running marathons, and she had a disability and was still making it happen. She challenged me to run my first full marathon, and I did just that.”
On race day, Rose’s doggedness became Michelle’s inspiration. As she limbered up at the starting line, Michelle overcame her self-doubt. She ran across a glacier, up and over rocky terrain and through icy mud patches. She pushed on and dug deep, even when a howling polar storm blew snow across her path parallel to the ground. She stayed at it for the full 42 kilometers and crossed the finishing line.
“It was a great lesson: Anything is possible with some tenacity, perseverance, and commitment to make it happen.”
Fifteen years later, this remains a defining experience for Michelle, who is now Microsoft’s General Manager for Southeast Asia New Markets. Eight of the nine countries in which she operates – Bangladesh, Bhutan, Cambodia, Laos, Maldives, Myanmar, Nepal, and Sri Lanka – are among the world’s poorest nations. The ninth, the oil-rich Sultanate of Brunei on the island of Borneo, has wealth. But it is also facing far-reaching economic challenges as energy prices sag.
Her wide-ranging brief is to help modernize underdeveloped economies and companies through digital transformation in line with Microsoft’s global mission: To empower every organization and every person on the planet to achieve more. Wherever she is – be it humid Yangon, crowded Dhaka, or slow-paced Vientiane – she constantly applies the life lesson she learned on the Antarctic ice.
There are plenty of challenges. More than 95 percent of the companies in her multi-country patch are small to medium-sized businesses with little, or no, tech experience. Their government bureaucracies are often buried under with mountains of paperwork and archaic procedures. Their infrastructure and public services are basic, and in places, almost non-existent.
For these countries, starting off on a digital transformation journey seems as daunting as Michelle remembers starting off on her first marathon. But she is convinced they can do it, just like she did.
“Just like I could run a marathon with little (athletic) background, an emerging country can also adopt technology and embrace digital transformation and benefit from that with little background in technology from the past. Companies today can embrace the technology right away. They don’t need to wait a long time.”
Michelle was born, raised, and educated in the United States, where she also joined Microsoft. She later was posted to Singapore and then South Korea. In 2014, she took on her nine emerging markets, which she admits was an eye-opening experience.
“One of the things that really surprised me was the lack of infrastructure … The roads were in poor shape. There was a lack of public transportation, a lack of utilities as well, and so the physical infrastructure was behind,” she says. “That’s still largely the case, but in the last three years or so the digital infrastructure has changed and grown rapidly.”
Take Myanmar, for example. In 2010, only 10 percent of its people had mobile phones or internet access. Today, the country has more mobiles than citizens and 90% of the population is online. Similarly, companies and governments – which a few years ago lacked basic resources and skills to build their own IT systems – are now increasingly moving their paper-based operations directly into the cloud.
And that means, that unlike early tech-adopter economies in the developed world, emerging markets do not have to wrestle with the complications of legacy IT systems. The very fact that they were unwired backwaters in the recent past makes them digital clean slates for the future. This promises to be an exciting advantage. “They can advance much faster and even leapfrog developed countries,” says Michelle.
This paper-to-cloud transformation is already reaping massive benefits and revealing new opportunities and empowerment across various economic and social sectors.
“When you look at the world, there are two billion people who are unbanked globally – and about 450 million in Southeast Asia alone. Technology is changing that. People, who perhaps had to travel tens of kilometers in order to get to a bank, can now have access to banking services through their mobile phones, through technology,” she says. “That’s changing people’s lives in these emerging markets. They can set up a business. They can be a part of the formal economy … and it’s enabling governments to have more productive societies so that their countries can advance.”
Paper-to-cloud transformation not only boosts business and finance, it can also save lives. Michelle points to how the Cambodia Children’s Fund and the Cambodian National Police have been able to step up their fight against child trafficking by digitizing mountains of paper records into easily accessible databases. Information on missing children, that used to be kept in unlinked paper files, is now available to investigators anywhere, on any device, and at any time on the cloud. That means greater numbers of kids are being located and rescued from lives of misery and danger. “They are solving these cases faster and they’re able to return more children home to their families.”
Upskilling: Digital transformation is economic transformation for all
Is digital transformation something to be feared or welcomed? Does it create or destroy jobs? These are big questions facing the modern world. And, how you might answer them probably depends on where you are on the planet.
In developed countries – where the march of digital disruption is fast eating away at well-entrenched occupations, sectors, and industries – there is soul searching and even trepidation. But in developing countries – where infrastructure and high-end legacy industries barely exist – there is much more hope, and even enthusiasm, for change, says Michelle Simmons, General Manager, Southeast Asia New Markets, Microsoft Asia Pacific.
“Technology is being embraced in these countries because it’s viewed as a way to transform economies, to transform businesses,” she says. “Digital transformation has the potential to empower millions of people to achieve more. Its potential for the region can be profound. Done right, digital transformation means economic transformation, and that means transformation for everyone.”
Emerging economies throughout the Asia Pacific have steadily grown over the years thanks to relatively cheap and low-skilled labor in agriculture and in low-level, export-focused manufacturing. This strategy has made them stronger economies, but it can only take so far. They now realize they must build technological capabilities so they can upgrade to have more productive, knowledge-based industries with knowledge-based workforces that are digitally literate.
The fundamental challenge of how to upskill workers digitally is more or less the same in developed and emerging economies. But in the latter “there’s not that fear of jobs being reduced. It’s about how do we make sure people, individuals, youth, have the skills for tomorrow’s jobs,” Michelle says.
Bridging that digital skills gap is a priority for economic development. And, tech companies – like Microsoft – can help. Among the biggest cheerleaders for digital literacy are the region’s young people who hope to build meaningful careers in economies that traditionally offered few possibilities outside of a factory or a farm. “More than half of the world’s millennials reside in the Asia Pacific. And that’s a great opportunity if we can only tap into their capabilities, have them introduced to technology, (and) get access to technology.”
Adding to the importance of this goal are high youth unemployment rates in emerging Asian economies, which are estimated to be up to three times greater than the overall global rate. “When you have unskilled people and a high unemployed youth population, that’s a real problem for a lot of countries.
“So, we are working with a number of non-government organizations to help build the skills of these youth, to build their digital skills. We know that today, about 50 percent of jobs require technology skills. Within the next three years, that’s going to jump to more than 75 percent. So we’re working to help build the skills that employers need to expand their companies.”
In Sri Lanka, decades of civil strife have now given way to sustained economic growth. In this period of calm and reconstruction, 24-year-old Prabhath Mannapperuma leads a team of techie volunteers teaching digital skills to rural and underprivileged children. They use the micro:bit, a tiny programmable device that makes coding fun. “Using a keyboard to type in code is not interesting for kids,” says Mannapperuma, an IT professional and tech-evangelist, who is determined to inspire a new generation.
Upskilling is also a priority in one of Asia’s poorest countries, Nepal. Here, Microsoft has launched an ambitious digital literacy training program that is transforming lives. Santosh Thapa lost his home and livelihood in a massive 2015 earthquake and struggled in its aftermath to start again in business. Things turned around after he graduated from a Microsoft-sponsored course that taught him some digital basics, which he now uses daily to serve his customers and stay ahead of his competitors.
Often women are the most disadvantaged in the skills race. For instance in Myanmar, only 35 percent of the workforce is female. Without wide educational opportunities, most women have been relegated to the home or the farm. But times are changing as the economy opens up after decades of isolation. “Women in Myanmar are at risk of not gaining the skills for the jobs of the future, and so we are helping to develop the skills of young women, and that’s been an exciting effort,” says Michelle.
The team at Microsoft Philanthropies has partnered with the Myanmar Book Aid and Preservation Foundation in its Tech Age Girls program. It identifies promising female leaders, between the ages of 14 to 18, and provides them with essential leadership and computer science skills to be future-ready for the jobs of the 4th Industrial Revolution.
The goal is to create a network of 100 young women leaders in at least five locations throughout Myanmar with advanced capacity in high-demand technology skills. One of these future leaders is Thuza who is determined to forge a career in the digital space. “There seems to be a life path that girls are traditionally expected to take,” she says. “But I’m a Tech Age Girl and I’m on a different path.”
In Bangladesh, Microsoft and the national government have come together to teach thousands of women hardware and software skills. Many are now working at more than 5,000 state-run digital centers that encourage ordinary people to take up technology for the business, work, and studies. It is also hoped that many of the women graduates of the training program will become digital entrepreneurs themselves.
These examples are undeniably encouraging and even inspirational. But Michelle is clear on one point: Digital skills development is more than just meaningful and impactful philanthropic work. It is also a hard-headed, long-term business strategy and a big investment in human capital.
Microsoft wants its customers to grow and push ahead with digital transformation, she says. And to do that, they need digitally skilled workers. “This is about empowering individuals, and also about enabling businesses to fill gaps in order for them to actually compete globally … by developing the skills, we can develop the economy.”
Game-changing cloud: New business mindsets to compete globally
Optimism is the powerful new force sweeping through some of Asia’s poorest and least developed economies. It’s changing how business is done, what’s being produced, and who’s moving ahead.
“One of the things I love about Asia is that anything is seen as possible,” says Michelle Simmons, General Manager, Southeast Asia New Markets, Microsoft Asia Pacific. “Companies look at things and say: ‘How do we embrace technology in order to do something differently than how we’ve done it in the past? To compete in a different way, to bring new solutions to our customers, to build new business models.’ That promise of possibility is alive and well throughout Asia, and in the emerging markets especially.”
Michelle operates across nine emerging markets – Bangladesh, Bhutan, Brunei, Cambodia, Laos, Maldives, Myanmar, Nepal, and Sri Lanka. Most of the companies she encounters are small-to-medium businesses. Some are startups. Some are state-owned. Some are family-owned. Some cling to traditional ways of doing things. But many are adopting new mindsets as they look to the future. Some have already made substantial inroads into the global economy and supply chains.
For Michelle, the “anything is possible” attitude of outward-looking entrepreneurs in Asia’s emerging economies today can be loosely compared to the expansive free enterprise culture that took hold in the United States in the late 19th and early 20th centuries. Being described as “emerging markets”, of course, implies that they are rising. But they do face their own limitations and the pace of their digital journeys varies.
“I’d say they are willing to take bigger risks. But they’re limited by what skills – what capabilities – are available to them in their markets. I’d say they’re open to possibilities but may not see how to get there. We try to help customers see what is possible and how to get from A to B – how to transform their businesses and realize their full potential.”
Many companies in emerging markets – big and small – are privately controlled. Unlike corporates in developed markets, they do not face stockholder and governance demands. But they do have their own set of checks and balances.
“They are usually family-owned. And so, it’s about their money, not somebody else’s money,” Michelle explains. “They’re making decisions based on their own livelihoods, the livelihoods of their family members. That rings true for small businesses and all the way to some of the largest conglomerates.”
Until now, it has been easy for them to tap massive pools of cheap and relatively low-skilled workers to solve problems or meet targets rather than adopt new technologies. That strategy works in the production of low-end goods, such as in a garment factory or a food processing plant. “But that can only take them so far, and they’re starting to recognize that,” she says.
The change in mindset often comes when a company steps up into the production of higher-end goods and services aimed at sophisticated export markets and foreign partners who hold higher expectations of quality and other standards. “This is a matter of survival on a globally competitive scale, and so they are recognizing that technology will help them to be more competitive.”
Some of the largest companies in emerging economies are rapidly taking up technology solutions so they can join the global business community. “If they want to have foreign investments – if they want to be competitive globally and work with global partners – they need to have a strong governance model. They need to have technology in place in order to be competitive,” Michelle says.
She cites the example of how one regional company modernized its internal communication across a string of different plants and over a range of industries. Previously, paper memorandums would have been distributed from the CEO’s office. Now, that same CEO can have regular bi-directional conversations with his workers and managers on all sorts of issues, from improving productivity by reducing errors to better managing absenteeism.
The big game changer in all this is the cloud. Economical and flexible, the cloud not only provides efficiency, communication, and better governance, it also brings unprecedented security. This is of grave importance to a region regarded as particularly vulnerable to cyberattacks. Microsoft’s most recent Security Intelligence Report found that four out of the nine countries which Michelle covers were dangerously open to cyberthreats because of lax regulations, the widespread use of malware-infused pirated software, poor IT management, and simple complacency.
It is clear that cybersecurity is an essential part of any business expansion strategy. One example is Chip Mong, a conglomerate in Cambodia that has its eyes set on spreading its reach across the whole of Southeast Asia. Since 1982, it has been producing a diverse array of services and products – from manufacturing and distributing concrete to importing and distributing cement, ceramic tiles, and steel. It has also moved into a range of consumer goods.
But to move to the next level, its leaders understood that data protection would be essential to winning market share and satisfying customers. And so Chip Mong adopted a cloud-based Office 365 solution to transform its operations. Not only did this resulted in a robust security posture, it produced competitive efficiencies within, and collaboration across, its many business units and teams. Furthermore, its digital transformation journey bolstered Chip Mong’s reputation as an attractive employer for Cambodian millennial professionals who understand that doing business in the cloud can open the door to the world.
For many years, manufacturers in emerging markets relied on their comparatively low costs to be effective exporters. But things are getting more complicated as industries develop and global markets become more sophisticated and discerning. Quality control, and the costs associated with it, are now key. And, data-driven technology is playing a crucial role.
Let’s look at the Hirdaramani Group. It started as a single retail store in Sri Lanka’s capital, Colombo, and today, it stretches across multiple sectors with more than 60,000 employees working in dozens of facilities in four countries. With an eye on growing its apparel manufacturing business further, Hirdaramani has adopted an end-to-end quality management system, it calls Res.Q. This solution integrates real-time data and analytics with Power BI to monitor key production quality indicators. This eliminates reporting time lags and enables data-driven decision-making, which, in turn, slashes costly wastage, builds new efficiencies, and boosts competitiveness.
Michelle sees ongoing innovation, based on cloud technologies, as the way forward for emerging economies as more globally-minded entrepreneurs establish new industries, tap new export markets, and create new jobs.
“The cloud changes everything for small and medium businesses. If you think about how they operate without technology, it’s a paper-based. Their borders are typically within the distance that they can reach their customers, which might be a walking distance, it might be a driving distance. But with the cloud, they can theoretically operate anywhere.”
“That means barriers are broken down,” Michelle says. “The cloud provides them with capabilities that, not so long ago, only the top 1,000 companies globally would have had access to. The whole world becomes an opportunity for anyone in any country at that point. From a customer perspective – everyone can access the global economy. You can have a company in Bangladesh or Cambodia competing with companies in Western Europe. And that is a very different story today than it was 10 years ago.”
This is a pivotal change for Asia’s emerging markets, Michelle says. If companies anywhere can compete anywhere, there is no reason why a now small company based in Bhutan or Brunei, Nepal or wherever, cannot grow, prosper and “one day make it on the Fortune 500.”
General Manager, Southeast Asia New Markets, Microsoft Asia Pacific
Based in Singapore, Michelle leads Microsoft’s business across nine countries that make up some of Asia Pacific’s fastest growing markets including Bangladesh, Bhutan, Brunei, Cambodia, Laos, Maldives, Myanmar, Nepal and Sri Lanka. Before her current role, Simmons was the senior director of Marketing & Operations for Microsoft Korea. In this capacity, she was responsible for business operations, marketing, customer satisfaction, and driving overall business priorities for the Korean market.
Digital Content Editor, Communications, Microsoft Asia
Geoff has worked extensively in Asia as a reporter, correspondent and editor for The Associated Press, The Sydney Morning Herald, and MSN, as well as the US-based Asia Society. He has covered a wide variety of big stories over the years, including the Asian financial crisis, the fall of the Suharto dictatorship in Indonesia, East Timor’s independence struggle, and the hunt for Osama bin Laden in Afghanistan after the 9-11 attacks in New York. His journalistic interests are now focused on how the world is changing through digital transformation.