How organizations in Asia Pacific should re-strategize for business success in the hyperconnected economy.
In an era marked by the fusion of artificial intelligence (AI), blockchain, and platform technologies that will usher in significant changes to traditional business and economic models, how should organizations in Asia Pacific ride the crest of this trend?
DigiconAsia sought out some insights from Theo Scherman, Chief Strategy Officer, Hitachi Asia, on embracing and succeeding in today’s hyperconnected and interdependent economy.
Why is the hyperconnected economy a trend in 2024? Can you explain what it is and why it’s becoming more relevant now?
Theo Scherman (TS): To dive into the significance and relevance of the hyperconnected economy, we must first appreciate the various economic phases we’ve been through. Our journey commenced in the ‘Pre-Internet Era’, which then transitioned into the ‘Internet Economy’ where the physical world first became digitized. This was followed by the ‘Social Economy’ that transformed the production and consumption of information.
Fast forward to where we are today, and we find ourselves in a ‘Collaborative Economy’ which reshaped the services industry (think ridesharing and short-term accommodation etc.) where services and goods are exchanged with one another. However, in recent years, the conventional boundaries between these economic phases have converged, prompting a critical re-evaluation of these established business models.
Today, we are ushering in the era of the hyperconnected economy, where the fusion of AI, blockchain, and platform technologies is set to redefine the way in which we conduct business forever. This era transcends a mere stage of technological innovation. It is a transformative wave that will fundamentally alter how businesses carry out their daily tasks and operations.
While such a concept is not entirely new, hyperconnectivity is becoming increasingly prevalent in the world we live in today. Businesses are awakening to the implications of not embracing this new economic paradigm. To prosper in this new economy, companies will have to become more agile, and forward-thinking to adapt to a new hyperconnected, interdependent economic ecosystem.
How can businesses stay competitive and thrive in this hyperconnected era?
TS: Businesses must become more agile and adjust not just their operations – but their revenue and business models – to the hyperconnected economy, to thrive. Such a shift is pivotal due to the virtual elimination of the middleman, such as distributors, wholesalers, and brokers. Without such intermediaries, businesses will need to directly engage with customers, and this requires a deep understanding of their needs and wants.
To achieve this, businesses must leverage data to make more informed and strategic decisions. Recognizing the enormous value of data is essential. Oftentimes, many businesses are sitting on a treasure trove of data, but fail to strategically harness it. By analyzing vast amounts of data, businesses can gain deeper insights, enabling them to create more tailored, personalized experiences that meet individual consumer needs and preferences.
For example, within a hyperconnected economy, AI technologies can recommend various products and services in e-commerce platforms. Such systems sift through enormous amounts of data, such as browsing history, recent transactions, and demographic information to enhance the overall shopping experience and foster increased customer satisfaction and loyalty.
What are some of the challenges for businesses as they navigate the hyperconnected economy? Can you share some examples?
TS: For companies who are well acquainted with traditional business-to-business (B2B) transactions, navigating a shift towards a direct-to-consumer (D2C) approach may present challenges. As opposed to B2B transactions, a D2C approach necessitates a more personalised and consumer-centric mindset. This is a sharp exit from typical B2B interactions, which often involve bulk orders and standardised negotiations.
Consider the healthcare sector, where many providers are embracing telehealth services to adapt to this new era. Telehealth grants healthcare professionals the ability to communicate directly with patients via online portals or mobile applications without ever needing to leave the house.
With the ease of appointment bookings, medicinal deliveries, and professional advice at the click of a button, more and more consumers will be drawn to the appeal of such services. Failure to adopt such solutions could leave healthcare providers and clinics vulnerable to getting left behind and surpassed by their competitors.
Conversely, what are some of the opportunities for companies that proactively align their business approach with the dynamics of the hyperconnected economy?
TS: In the hyperconnected economy, the removal of the middleman will produce a wealth of advantages for companies. For one, it will allow businesses to foster direct connections between producers and consumers through virtual, distributed marketplaces.
This in turn, enables companies to acquire real-time insights into consumer preferences and developments in the market. Moreover, the elimination of the middleman will not only give companies real-time actionable data on operations and products, but also lead to lower prices and higher profit margins.
Last but not least, this removal will streamline distribution and put an end to intricate, long-standing supply chains.
What are some key ways Hitachi is helping businesses to navigate the hyperconnected economy?
TS: At Hitachi, we collaborate with businesses to develop platforms and solutions that will help our customers connect directly with their consumer base, provide timely insights via AI-enabled analytics and have the capability to have a bi-directional relationship. These platforms provide precise data that empowers companies to gain a better understanding of their customers, minimize business risks, unlock new revenue streams, and boost growth.
In addition, our cutting-edge technologies have enabled our clients to accelerate collaborative creation, thereby enhancing the overall customer experience for their target audiences.
For instance, we have leveraged our digital capabilities to contribute to Singapore’s Green Plan 2030, and build a decarbonized society with increased connectivity. Commissioned by the Building and Construction Authority (BCA), we constructed a Super Low Energy Building platform, a national database that collates and analyses energy-efficient data and green technologies. This database generates unique data analytics functions to drive data-driven decision making, supporting the transition towards a more sustainable built environment sector in Singapore.
