Hong Kong lags in digital technology despite top infrastructure, says survey

PUBLISHED : Tuesday, 22 November, 2016, 10:44pm
UPDATED : Tuesday, 22 November, 2016, 10:44pm

A high-speed internet connection is not enough to lift companies into the digital age as the failure of Hong Kong companies to create fruitful digital partnerships with other firms has meant the city lags behind Singapore in its application of digital and online technologies to boost business, a survey has found.

The survey, conducted by the Economist Intelligence Unit and commissioned by telecommunications firm Telstra, placed Hong Kong in fourth place in Asia behind Singapore, South Korea and Japan for digital transformation – defined as the use of digital technology to improve processes and operating models.

“Hong Kong also has very good digital infrastructure... though the partnerships, the ecosystem that Hong Kong companies create with government, with each other, cross-border and with other countries could do with some improving,” said Darrin Webb, chief operating officer global and managing director for North East Asia for Telstra.

EIU surveyed 660 senior executives in 11 Asian markets across six industries alongside 210 executives in the UK, US and Australia to serve as a comparison. Singapore was the only Asian market in line with the three Western countries surveyed, ranking behind the US and ahead of the UK and Australia.

Countries and regions were ranked on digital infrastructure, human capital and industry connectivity to create EIU’s first Asian Digital Transformation Index.

Digital infrastructure was defined by the survey to include access and usage of information and communication technology, 4G coverage and smartphone penetration. Industry connectivity includes access to open data, collaboration between companies and access to e-commerce.

China ranked in seventh place overall.

The survey found 93 per cent of respondents rated a country’s infrastructure as important to their company’s digital transformation and 74 per cent reported investments in digital transformation had already proved their value.

Hong Kong ranked in third place behind Singapore and South Korea for its digital infrastructure, but the city was dragged down by its fifth place ranking for industry connectivity.

Half of the survey’s Hong Kong respondents said they had benefited from involvement in open innovation communities that share data and ideas between companies and research organisations. However, EIU said some of the digital partnerships in Hong Kong were in fact vendor relationships.

EIU’s research found a shift towards using data analytics among Hong Kong firms, with 57 per cent reporting that their companies use data analytics to a large extent and 43 per cent said this would be a major focus in the future.

Charles Ross, senior editor for the EIU’s Thought Leadership division in Asia, said once companies in Asia adopt the use of data analytics they tend to use the tools more heavily than their Western economy peers, which he said is a positive sign for Asian companies to catch up with firms in the west.

The survey ranked Hong Kong in third place in Asia for human capital, but Ravel Lai, group IT director of Jardine Restaurant Group and head of digital marketing for Pizza Hut and KFC chains, said there were still challenges in hiring for the new fields.

Lai said it was difficult to find employees locally with the necessary skills for digital marketing or innovative computer programmers, forcing the company to consider outsourcing some IT functions to Vietnam.