EMs in Asia Record Higher Business Confidence Globally

A new report reveals strong business confidence in the world’s emerging economies, with Bangalore topping the barometer across all five categories. Of the top 10, seven cities are from developing Asian countries. Conversely, lower confidence was recorded in developed cities such as Hong Kong, Tokyo and Berlin.

The ‘Connecting Commerce’ report, conducted by the Economist Intelligence Unit and commissioned by Telstra, assesses the confidence of business executives in their city’s environment and its conduciveness to supporting the digital ambitions of companies. It ranks Singapore 14th for overall business confidence, NetWorksAsia reported.

The report includes the first ever Digital Cities Barometer–a ranking of 45 cities around the world across five key categories relevant to business performance: innovation and entrepreneurship; the financial environment; people and skills; development of new technologies; and ICT infrastructure.

“Businesses rely on their city environments for talent, ideas, ICT infrastructure and financial resources to drive their digital initiatives,” said David Burns, Telstra’s Group managing director of global services and international.

 “It is striking that developing cities are recording much higher business confidence than developed cities. This reflects strong optimism in fast-growing markets. While city environments in developed countries may have served businesses well up to now, there is a sense that they must keep evolving to meet increasing expectations.”

“The Singapore government is recognized for its work in creating a strong environment for digital development, however there is room for improvement when it comes to support for innovation and entrepreneurship as well as talent and skills development. Skills shortages present one of the toughest challenges for Singaporean firms when attempting to pursue digital transformation initiatives, with skills in analytics, security and the Internet of Things most in demand,” said Burns.

“It is acknowledged by the executives surveyed that skills development is being closely coordinated between government and academia, with 75% in Singapore stating that they are consulted about their digital skill needs by academic institutions, and 77% saying the same about government authorities. This is a promising trend that should see more relevant digital skills being developed in the coming years,” said Burns.

Bangalore Shines

While overall business confidence in Singapore’s environment for digital transformation is reasonably strong at 6.89 on a 10-point scale, the city-state lags emerging Asian cities, such as Bangalore, Mumbai, New Delhi and Beijing.

Of the five research indicators, Singapore performs most poorly in ‘Innovation and Entrepreneurship’ (21st) and ‘People and Skills’ (18th), while Bangalore tops the table. Bangalore’s vibrant digital environment can be attributed in part to grassroots activism from the business and academic communities.

Forty-three percent of Singapore-based executives find government programs and events to be the most helpful external resource for their digital transformation efforts. More than half (53%) have also used government programs to finance transformation initiatives in recent years, signaling strong public-private trust.

APAC Behind the Curve

More than half of global survey respondents (54%) think their cities make poor use of the data they collect. That figure is highest in Asian cities. In Singapore, 45% think the government could make better use of the data it collects.

The research recognizes the increasing importance of digitization to an organization’s global competitiveness and shows that strong local government leadership can facilitate better outcomes for business and the local economy.

Globally, 48% of surveyed executives said their firm has considered relocating their operations to a city with a more favorable external environment. Respondents in Asian cities are most likely to consider moving (53%), while nearly half in US and Australian cities say the same.

Good Bet for Investors

Emerging economies will always offer investors good returns owing to their demographics, said Sameer Joshi, director, corporate and institutional relationships, Australia and New Zealand Banking Group Limited, DIFC branch. He was speaking at a panel discussion organized by the Indian Business and Professional Council on Saturday.

"An emerging middle class and young population with access to technology will offer growth prospects in emerging economies as opposed to the 2% returns currently available in developed economies," Joshi added.

Mahadevan Radhakanthan, chief credit officer, RAK Bank, said the economies of the BRIC quartet, Mexico and Indonesia registered growth above 5% in 2016.

"There are pockets of excellence in Africa despite changing political risks. A well-diversified Dubai economy where Expo 2020 contracts have already kicked in should help accelerate growth," said Radhakanthan.