Today’s app economy leaders, gone tomorrow: CA study
By Benjamin Cher February 25, 2016
- Singapore leads 10-country app economy index, Malaysia No 6 and Indonesia last
- But China, India and Indonesia could potentially take the top 3 positions in Asia
HERE today and gone tomorrow is a phrase that can describe the digital leaders of today, where disruption can easily upend the market. Similarly, the level of digital readiness in a country does not guarantee its position as a digital leader, according to a recent study.
The Application Economy Index 2016 from CA Technologies Inc, conducted by TRPC, was designed to identify the readiness of Asia Pacific countries for the ‘application economy,’ which posits that every business is a digital business, and that mobile apps are the face of the business.
The study has Singapore at the top of the Application Economy Index, with Malaysia ranked sixth and Indonesia in 10th place out of the 10 countries studied.
The study based its findings on three pillars with 10 parameters, with the first pillar being government use and support of technology and innovation – which includes government use of technology, strength of intellectual property protection, and innovation.
The second pillar is Internet and mobile infrastructure, including Internet penetration, average mobile connection speed, and smartphone penetration.
The third pillar is business agility, including the time taken to set up a business, debit card and credit card penetration, mobile payment readiness, and strength of cybersecurity.
The findings of the study were “nothing new,” according to TRPC managing director Lim May-Ann (pic above).
“The question would be, is this indicative of the future? As technologists and people who are looking at trends, you want to look a little into the future and you want to project where the growth is.
“What is going to propel economies into the application economy?” she told a media briefing in Singapore.
The TRPC study also looked at new disruptive factors that could affect the potential for markets to accelerate and leapfrog into the application economy proper.
These factors include the total number of smartphone users, daily general mobile Internet users, daily use of apps, use of virtual social networks, and youth demographics.
“We think that these factors – market potential accelerators – are going to determine a particular country’s performance in the application economy,” said Lim.
“This could be in the next five years or three years, we don’t quite know yet, but we feel quite strongly that these factors are going to impact how countries are going to accelerate,” she added.
When it came to application economy market potential, China and India came up first and second respectively, while Indonesia and Singapore ranked third and fourth respectively. Malaysia was ranked ninth, just above Japan at 10th.
Strengths, challenges and opportunities
Singapore, Malaysia and Indonesia have notable strengths and challenges of their own, as well as opportunities that can propel them up the Application Economy Index, according to the study (click infographic on the right to view in full).
Current leader Singapore has a consistent ranking across all categories, especially in Pillar One – government use and support of technology.
“The challenges Singapore face are that the state of its mobile market is very mature, and there are not many local challengers or players in the market,” said Lim.
In terms of opportunities, Singapore records high daily mobile and virtual social network use, and has a forward-looking government.
“The Singapore Government itself is trying to innovate, with the recent merger of media and infocomm regulators MDA and IDA (the Media Development Authority and Infocomm Development Authority of Singapore),” noted Lim.
Indonesia, while currently ranked last in the Index, has unique opportunities to leapfrog its way up, she argued.
“Many people [in Indonesia] don’t actually realise they are using the Internet when they access Facebook or when they move on to apps.
“Even for us who have lived through the evolution of the application economy we found it very strange, but that’s what happens when countries like Indonesia leapfrog into the application economy,” she added.
Indonesia has an above-average number of people who use mobile apps daily and virtual social networks, and the third largest mobile-savvy population, with a promising youth population as well.
According to Lim, these are opportunities that can propel Indonesia to the next level. However, challenges still abound.
“Unfortunately, the risk is that people’s ideas lack protection in Indonesia; more protection is needed for ideas and innovation,” she said, in reference to intellectual property.
The republic also needs to see a higher penetration of debit and credit cards, as well as adoption of mobile payments.
Malaysia scored in the mid-range across all parameters, showing especial strength in cybersecurity, according to Lim.
“The strength in cybersecurity was interesting, possibly because there has been a lot of discussion with the community on improving cybersecurity, and it has been in the consciousness and the mind as well,” she said.
Malaysia’s challenges are the low level of smartphone users relative to the region; it also has the smallest number of people who use the mobile Internet on a daily basis.
“The opportunities are there: An above-average percentage of youth, which stands it in good stead to accelerate education and training for the next generation of digital natives to take advantage of the application economy,” said Lim.
Survival of the fittest
All this aside, the status quo can be challenged and current leaders need to adapt or risk losing out, argued CA Technologies Asia Pacific and Japan president and general manager Kenneth Arredondo (pic above).
“It is a level playing ground for all of us right now, for all countries – we all have opportunities.
“The leaders need to stay aggressive, and the market holders need to be more aggressive,” he added.
As much as countries, companies too need to act fast to survive and thrive in today’s fast-changing environment.
“The pace of innovation must match the pace of disruption, and forward-looking, pro-active strategies for managing risks and capitalising on opportunities must be put in place if businesses are to succeed in the application economy,” Arredondo said in an official statement.
“In anticipation of the future marketplace, the best bet is still for enterprises to act fast to capture market share, and for governments to improve the enabling infrastructure for businesses to develop and adapt quickly to changing market environments,” he added.
Read the report here.
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