The study - developed and commissioned by CA Technologies, and carried out by research consulting firm TRPC - found that Thailand ranked 8th in the region in terms of its readiness to integrate, develop and benefit from application usage. It was ahead of only India and Indonesia, and behind Singapore, Australia, South Korea, Japan, Hong Kong, Malaysia and China.
Figure 1 The CA Technologies APJ Application Economy Index 2016 evaluates three main pillars that are critical for a vibrant application economy.
“Regardless of whether they are in the Disruptors, Challengers or Mainstream group, markets will still need to focus on creating conditions for businesses to thrive in the application economy. They can do so by continuing to do well in their key success characteristics, while mitigating current and potential weaknesses,” said Lim May-Ann, managing director, TRPC.
The index evaluates three main pillars that are critical for a vibrant application economy, with each pillar comprising various parameters:
- Government Use and Support of Technology and Innovation: To develop sound technology policies and promote innovation, governments themselves should understand and use software and applications.
- Internet and Mobile Infrastructure: Without the necessary infrastructure and enabled access to technology, an application economy cannot fully develop. Basic connectivity and network backbones must be in place, along with an environment which supports business growth and transformation.
- Business Agility: The ability to move nimbly and quickly in driving – and capturing – market disruption. For this to be possible, countries need to have an environment conducive for entrepreneurship and new forms of commerce to happen.
Thailand had low scores in most of the parameters, in particular government use and support of technology and innovation, and Internet and mobile infrastructure. It ranked last in the region for intellectual property (IP) protection, suggesting that more needs to be done to encourage continued innovation. Thailand’s Internet and mobile infrastructure also requires building up, coming in 9th for average mobile connection speed, 8th for Internet penetration and 7th for smartphone penetration. In terms of business agility, Thailand should focus on strengthening its cybersecurity and promoting mobile payments readiness, for which it ranked last and 8th respectively. Ramping up efforts in these areas would create a more conducive climate for businesses to operate, as well as boost e-commerce in the country.
“Thailand’s current rankings are not reflective of its full potential,” said Nick Lim, vice president, Asia South, CA Technologies. “The results offer a snapshot of the environment today, and indicate where Asia’s economies are in terms of how conducive their market environments are for app development and market entry in the present. Businesses will find it more critical than ever to harness software to stay competitive and relevant in a fast changing world, while governments should address any weaknesses in policy or infrastructure.”
The second part of CA’s study examined future leaders of the application economy through the use of Market Potential Accelerators (MPA). This index evaluates factors which have the ability to impact and accelerate market potential in the new application economy. They are: (i) the number of smartphone users in a market, (ii) the number of people who use mobile Internet on a daily basis, (iii) the use of virtual social networks, (iv) the daily use of mobile applications, and (v) the size of the youth demographic in the market.
Figure 2 The Market Potential Accelerators Index evaluates factors which have the ability to impact and accelerate market potential in the new application economy.
When MPA are taken into account, Thailand jumped two spots to 6th place if market gaps are addressed. The country has several opportunities it can leverage, including a relatively large smartphone user base of 42 million people, and an above-average youth demographic that will be entering the marketplace. The Thai population is also well-versed in using application economy mediums to interact, ranking 4th in daily use of applications and use of virtual social networks.
Notably the government has also taken proactive steps with a series of “Digital Economy Bills” that cover areas such as personal data protection, cybersecurity and electronic transactions.
Thailand’s rise in rankings in the MPA highlights how disruption can help markets move ahead in the application economy, in spite of a seemingly slow start. Enterprises must act fast to capture market share, and governments need to push ahead with policies to improve infrastructure ahead of demand.
The 10 parameters of the Application Economy Index (AEI2016) and five Market Potential Accelerators are sourced from publicly-available indices.
As indicators used had different units and scales, any indicator that did not use a 10-point scale was normalized to make the indicator values comparable, as well as to construct aggregate scores for each economy.
Read more about CA’s APJ Application Economy Index here.