Asia-Oceania a key landscape for the global IT industry

The Asia-Oceania region is seen as playing an important role for the future of information technology, having become a key IT landscape for the industry in the global market. 

Narayana Murthy, executive chairman of business technology consulting firm Infosys, said Asia-Oceania’s lead in technology arises from its cost advantage, and its penchant for innovation such differentiation makes it an ideal candidate for playing a dominant role in the global IT industry. 

Asia-Oceania has contributed to more than 50 per cent of the world’s economic growth in the period following the Asian financial crisis of the late 1990s, and one of the contributing factors to this success has been the significant and sizeable growth of the IT industry of these economics, he said. 

The region’s IT industry has grown to become a leading supplier and exporter – for example, with Taiwan now dominating the global semiconductor foundry. 

Meanwhile, China has become a leading competitor in electronics manufacturing, and India is synonymous with software services. 

“Today, the world is taking note of the growth and the future potential of the Asia-Oceania region. A key driver for this rising significance is the role this region is playing in the global IT landscape,” said Murthy. 

It is estimated that the region caters to more than 73 per cent of the global demand for IT-BPO (business process outsourcing) services, he said, adding that India has accounts for over 50 per cent of the market. 

The Philippines is emerging as the next big destination for BPO, with a global IT-BPO market share of 8 per cent. 

 

Substantial IT consumer

Moreover, Asia-Oceania has also risen as a substantial consumer of IT and IT-enabled services. Mature economies like Australia, Japan and Singapore have increased their consumption of IT to improve their competitiveness and maintain economic efficiency. 

He said Japan today was second only to the US with a 10-per-cent share of worldwide IT spending. China has economic growth of 8-9 per cent and a 5-per-cent share of global IT spending. 

Therefore, information technology in Asia-Oceania is on the rise both in terms of demand and consumption, and the expected economic and social development of the region will lead to accelerated growth in IT-related activities in manufacturing, packaging, exports and services, he added.

“It is estimated that the Asia-Oceania IT industry will grow from US$220 billion [Bt6.85 trillion] today to a size of $400 billion by 2020. This growth will be led by increased demand from technology convergence such as ‘big data’ and the ‘Internet of Things’ (IoT), and social and economic pressures resulting in new ways of consuming IT,” said Murthy. 

He said the government would also be a factor driving IT growth in Asia-Oceania. 

Governments across the globe are adapting to a post-economic-crisis world. 

Therefore, they need to leverage IT to achieve key objectives, including: creating the most efficient, transparent, fair and accountable public-governance systems to provide basic necessities such as healthcare, education, 

nutrition and shelter for every citizen; and creating the most competitive private sector that can challenge rivals in global markets  and add to an economy’s overall competitiveness and growth. 

In addition, he said, the infrastructure needs in emerging economies are set to rise. 

Asia could require up to $8 trillion of new infrastructure investment by 2020 to support the current levels of economic growth.