According to new business study released by Microsoft in partnership with IDC Asia/Pacific, digital transformation is expected to add an estimated US$8 billion to the Philippines’ GDP, and increase the growth rate by 0.4% annually by 2021.

The study predicts a dramatic acceleration in the pace of digital transformation across Asia Pacific economies. In 2017, about 3% of the Philippines’ GDP was derived from digital products and services created directly through the use of digital technologies, such as mobility, cloud, Internet of Things (IoT), and artificial intelligence (AI).

The survey conducted with 1,560 business decision makers in mid and large-sized organizations across 15 economies in the region highlights the rapid impact and widespread disruption that digital transformation is having on traditional business models.

The study, which included 100 respondents from the Philippines, identified five key benefits from digital transformation such as higher profit margins, greater productivity, increase revenue from new products and services, improved customer advocacy, and more cost reductions.

While 93% of organizations in the Philippines are in the midst of their digital transformation journey, only 7% in the entire region can be classified as Leaders. These are organizations that have full or progressing digital transformation strategies, with at least a third of their revenue derived from digital products and services. In addition, these companies are seeing between 20–30% improvements in benefits across various business areas from their initiatives.

The study indicates that Leaders experience double the benefits of Followers, and these improvements will be more pronounced by 2020.

In a recent press conference about Digital Transformation organized by Microsoft, the company talks about how digital transformation will bring three benefits to society from potential increment to personal income through freelance and digital work; creation of more higher value jobs; and increased educational and training opportunities. 

Among the speakers are Andrea Della Mattea, President of Microsoft Asia Pacific; Hans Bayaborda, Managing Director of Microsoft Philippines; Arvie De Vera, Head of Fintech Group of Union Bank; and Jubert Albert, Heead of Operations of IDC Philippines.      

“The Philippines is clearly on the digital transformation fast track. Within the next four years, we expect to see approximately 40% of the Philippines’ GDP to be derived from digital products and services,” said Hans Bayaborda, Managing Director of Microsoft Philippines. “At the same time, organizations in Asia Pacific are increasingly deploying emerging technologies such as artificial intelligence as part of their digital transformation initiatives, and that will accelerate growth even further.”

Daniel-Zoe Jimenez, Research Director Digital Transformation Practice Lead, IDC Asia/Pacific, said, “The pace of digital transformation is accelerating, and IDC expects that by 2021, at least 48-percent of Southeast Asia’s GDP will be derived from digital products and services, with growth in every industry driven by digitally enhanced offerings, operations and relationships. The study shows Leaders seeing double the benefits of Followers, with improvements in productivity, cost reductions, and customer advocacy. To remain competitive, organizations must establish new metrics, realign organization structures, and re-architect their technology platform.”

*Contributed by: Raymund Ravanera