Applications have become indispensable to today’s economy, and enterprises are embracing a digital transformation to enhance their competitiveness and profits. The AEI 2016 study offers a special perspective to look at the progress and momentum that APJ markets have created so far in this respect.
According to the study, Hong Kong ranked in the top half as one of the five disruptors in APJ, along with Singapore, Australia, South Korea and Japan. Malaysia, China, Thailand, India and Indonesia make up the rest of the ranks either as challenger or mainstream.
Figure 1 The CA Technologies APJ Application Economy Index 2016 evaluates three main pillars that are critical for a vibrant application economy.
Hong Kong receives high scores in the categories “strength of intellectual property protection” and “time taken to set up a business”. This could be attributed to its government’s commitment to developing Hong Kong into a regional intellectual property hub, and the high efficiency of the government operations, as well as its support for local startups.
This ranking was made by consolidating ten parameters into three pillars:
1. Government Use and Support of Technology and Innovation: The measurement of the degree in which governments are using technology and are developing positive policies for innovation and technology use.
2. Internet and Mobile Infrastructure: Internet and smartphone penetration rates and average connection speeds determine whether or not the application economy can flourish.
3. Business Agility: The ability to move with agility and to act quickly and responsively when driving market disruption. To achieve this, governments must create an environment that is conducive to businesses.
“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.
Apart from showing each market’s current ranking, the AEI 2016 study also reviewed the potential and prospect of these markets, by looking at potential accelerators.
Figure 2 The Market Potential Accelerators Index evaluates factors which have the ability to impact and accelerate market potential in the new application economy.
The factors include: (i) the number of smartphone users, (ii) the number of daily general mobile Internet use, (iii) the use of virtual social networks, (iv) the daily use of mobile apps, and (v) the size of the youth demography — the population aged 15-24 — in the market.
Hong Kong remains in the middle position at the 5th place of APJ Application Economy Market Potential Accelerators following Indonesia and Singapore as one of the six achievers in APJ, with China and India ranking highest as accelerators.
“It is interesting that Hong Kong ranks in the middle in terms of both current situation and future potential. It probably means that Hong Kong is standing at a crossroads in this digital world — we can easily become a leader or fall into mainstream,” explains David Aston, vice president, Greater China, CA Technologies. “As one of the most developed economies in the world, Hong Kong is mature and settled into the application economy readiness leaderboard. Based on the solid foundations built in the past, the government and organizations in Hong Kong should take action to quickly address the gaps and seize the opportunity.”
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.