When people think about the next wave of digital innovation, they probably imagine it originating in Silicon Valley.
But compelling reasons have emerged for their gaze to shift eastwards.
The Asia Pacific region is quickly gaining prominence as the home of numerous fast-growth technology innovators, and as a hotbed for transformation within traditional businesses.
According to the business analytics firm CB Insights, as of November 2020 the Asia Pacific region was home to more than 170 technology unicorns – that is, privately-owned technology startups with valuations greater than US$1 billion. This represents more than a third of all unicorns globally and includes the world’s two most highly valued examples – ByteDance and Didi Chuxing.
The emergence of Asia Pacific as a hub for innovation is reinforced by the World Intellectual Property Organization’s finding that in 2018, two-thirds of all patent applications filed worldwide were registered to its offices in the Asia Pacific region.
Asia Pacific is also home to many of the world’s leading users of cloud and data technologies, such as UnionBank, Edelweiss, and Globe Telecom. These companies are decades old, but have proven adept at using cloud technologies to streamline their businesses and improve customers’ experiences.
One of the defining characteristics of Asia Pacific innovators is their global focus.
For some, this arises from their home markets being too small to sustain their growth ambitions, and so they often begin operating in nearby nations within a few years of their founding.
For others, and especially those born in China and India, the opposite is true – the massive size and diversity of their home markets provide the perfect training ground for adapting to other opportunities around the world.
Being born in the cloud means they can quickly cross national boundaries without the constant need to invest in computing hardware in their destination markets. This slashes the cost of expansion and enables them to direct resources at establishing their presence and making connections.
And many of the region’s unicorns have taken venture capital from heavyweight international investors such as Sequoia Capital, Accel Partners, and Tiger Global Management, which ensures they are globally connected from day one.
New approaches to old problems
The speed at which new businesses can be created in the cloud means that when a viable new opportunity is uncovered, we might see dozens of similar businesses emerge to explore it.
One example is in the transport and logistics sector, where the cloud is enabling the emergence of low-cost service providers that can better organise existing resources. The result has been an explosion in ride-sharing, establishing fast-growth companies like Grab and Go-Jek.
We are witnessing sector-wide transformation in financial services, where cloud-based fintechs are bringing new thinking that both challenges traditional players and creates opportunities.
At the same time, we see existing players responding, like the Singapore-based multinational banking and financial services corporation DBS, which has leveraged the cloud to reinvent its products and customer experience, and is now taking the next step forward by working to equip thousands of workers with skills in Artificial Intelligence (AI) and Machine Learning (ML).
Going from zero to hundred at an accelerated pace
Working closely with startups across the region has allowed us to see firsthand how quickly these companies have grown their footprint in the region. The increasing collaboration between governments and private sectors to support budding enterprises on their cloud transformation journeys – for example, Singapore’s Smart Nation goals or Malaysia’s Digital Economy Blueprint – have enabled them to achieve an unprecedented pace of technological innovation.
Freshworks, an Indian-born business software maker, was able to leverage an international network through the AWS Cloud Connections program, an event series aimed at educating technology communities on today’s biggest cloud topics, to rapidly expand to ASEAN, EMEA, and the US.
Programs like these have helped many Asia Pacific startups grow at a rapid rate. The Singaporean-born multinational ride-hailing company Grab Holdings, for instance, was founded in 2012 and today is valued at around US$40 billion, while the Indian online education app maker BYJU’S was founded just one year earlier and is now valued at US$16 billion.
And in some instances, we are seeing these businesses expand their service offerings as they grow, leading to the creation of so-called Super Apps which enable users to perform multiple tasks with the same provider.
In Vietnam, the startup Zalo is not just that country’s favourite messaging app, having grown to 52 million users in barely a decade, but is rapidly emerging as one of that country’s favourite payment platforms.
Similarly, online travel unicorn Traveloka Indonesia, which offers air tickets, guidance on local activities, and travel finance, pivoted rapidly on the cloud to save its business under pandemic lockdowns.
This ability of Asian innovators to build loyalty through dynamic thinking and strong customer experience, and then leverage it to expand their service offerings into other lucrative markets, is something leaders around the world can learn from.
Building on the cloud for innovation
We frequently see startups using cloud technology to solve problems that have proven too difficult to take on using traditional methods, including bringing banking, education, and healthcare services to people in remote regions.
In the Philippines, fintech startup PearlPay is helping local rural banks digitise their services and serve customers who have limited, or no access to the internet.
In Thailand, the digital healthcare startup Doctor Raksa Co. helps patients consult with more than 800 specialist doctors through its Raksa app, and provides online prescription services with medications distributed within an hour.
Australian startup AgriDigital is enabling thousands of farmers to connect with their supply chain network and manage contracts, deliveries, inventory, orders, and payments, in real-time, through the use of cloud.
And it is not just startups that are benefitting from the cloud. In Asia, public cloud spending is expected to reach US$48.4 billion by the end of 2021, as organisations everywhere realise its true value as an innovation catalyst.
For example, we’ve been working with Korean Air to explore how they can use AI technology to create a touchless check-in process. This will help minimise COVID-19 transmission, and create a smoother experience for customers.
A cloud-based launchpad
None of this would have been possible without the cloud, but it is how customers use the cloud that has enabled them to be successful.
And the ways startups and traditional businesses in this region are adopting cloud technologies and using them for positive human impact is something to be celebrated. It is a reminder of the power of diversity, and the benefits that different perspectives can bring to bear in solving both local and global challenges.
All of this makes the Asia Pacific region worth studying closely as a new global hub for innovation.