Indonesia Poised to Leapfrog to Top Three in APJ for Application Economy Potential: CA Study


Key areas of focus required include addressing government use and support of technology, Internet and mobile infrastructure, and business agility

INDONESIA, February 24, 2016 – CA Technologies (NASDAQ: CA) today launched the inaugural edition of the Asia Pacific & Japan (APJ) Application Economy Index (AEI) 2016, designed to identify the readiness of 10 (APJ) markets to thrive in today’s digital world. In our increasingly connected world where devices talk to each other, storefronts fit in pockets and services are accessible over the internet - applications are everywhere. This means every business is really in the software business and needs to embrace digital transformation.

The study - developed and commissioned by CA Technologies, and carried out by research consulting firm TRPC - found that Indonesia ranked last in the region in terms of its readiness to integrate, develop and benefit from application usage. It was joined by Malaysia, China, Thailand and India in the bottom half, while Singapore, Australia, South Korea, Japan and Hong Kong made up the top half.

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.
  • Indonesia had low scores in most of the parameters. It ranked last for innovation under government use and support of technology, suggesting that more protection is needed for ideas. Its Internet and mobile infrastructure also require development, coming in last for Internet connection and average mobile connection speeds. In terms of business agility, Indonesia should create a more conducive climate for businesses to operate. From reducing the time taken to set up a business, to getting its population more receptive and ready for mobile payments, the country needs to ramp up efforts to encourage e-commerce.

    “Indonesia’s performance is not reflective of the full extent of its 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, Indonesia stands to jump seven spots to 3rd place if market gaps are addressed. Some of the opportunities that the country enjoys include strong domestic support for entrepreneurs, and a social media-savvy population that uses the mobile Internet, applications and virtual social networks daily. Indonesia also has the third largest population of smartphone users and the third largest youth demographic in the region.

    Indonesia’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.

    Methodology

    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.

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CA Technologies
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