depa Reveals Digital Industry Sentiment Index as COVID-19 Drives Digital Transformations
“depa” pledges to shape the future of Thai entrepreneurs through information-based digitalisation
depa Building Ladprao – The Digital Economy Promotion Agency (depa) announced the “Digital Industry Sentiment Index” that shows new milestones of databased constructive development of digital economy and society. The index finds the digital industry also suffered no less impact of the COVID-19 pandemic than other industries despite growing usage of digital technologies during the pandemic. Meanwhile, digital service providers outperformed the IT hardware market, which has been nosedriving due to the evolving customers’ behavior. It prompted business operators to gear up adjusting their business development plans and strategies to keep pace with the changing business landscape and digital ecosystem. However, the “Digital Industry Sentiment Index” is also in line with growth of the Thai industry, reflecting all mechanisms in the market are moving toward the era of digital economy and there is a possibility that a new industry is going to happen. But a drawback is the lack of skilled digital manpower to create an advantage and enhance competitiveness.
Dr. Nuttapon Nimmanphatcharin, President/CEO of depa, said the depa has been assigned by Mr. Buddhipongse Punnakanta, Minister of Digital Economy and Society (MDES), to accelerate the development of digital economy and society based on data and information in order to create more broad-based benefits for society and the economy. Therefore, the depa conducted a survey and came up with the Digital Industry Sentiment Index to serve as an international reference and benchmark for industry development. The survey is based on data gathered from business operators and trends of the digital industry, including the confidence in the digital industry. The Digital Industry Sentiment Index will be revealed quarterly. The survey also included data from users in the industry. At the initial stage, the survey focused on the adoption of digital technologies and innovations in the manufacturing sector before broadening the scope of the survey to cover other industries, including the service sector in the near future.
“The Digital Industry Sentiment Index is in alignment with the value and market growth of the digital industry. It indicated that Thailand is on the path to the digital economy as the country has continuously seen a consistent growth in the digital industry, while digital technology is playing a vital role in driving the economy and it becomes an essential part of our daily lifestyle. However, Thailand is still short of skilled digital workforce to help maximize the country’s competitive edge in the digital industry. Highly-skilled digital personnel, experts and specialists are the key factors to help move the Thai digital industry forward to flourish in the global market. The newly graduates must be ready to enter the labor market and they must be equipped with digital skills required by the labor market in order to start working immediately. So, upskilling and Reskilling for undergraduates are highly needed. The Digital Industry Sentiment Index is an indicator of how effective the government policy is. If the sentiment index is at a low level it means the businesses are not confident in the government policy and its administration. Hence, the sentiment index is a mirror that directly reflects feedback from digital-centric business operators,” said the president and CEO of the depa.
According to the dapa’s latest survey, the Digital Industry Sentiment Index in the second quarter of 2020 stood at 43.4, which is at the low level, indicating that the digital industry was potentially affected by an economic recession, similar to other industries, which were battered by the fallout of the COVID-19 pandemic. Even if there was a steep increase in users of digital services during the pandemic, most digital service operators and developers and businesses related to digital technologies said the COVID-19 took a toll on their revenue as they also faced difficulties finding supportive financial sources to shore up the liquidity in order to move the business forward. The global economic downturn and the lack of skilled workers highly needed for a particular job also attributed to the weak business performances.
The Digital Industry Sentiment Index edged up to stay at 49.8 in the third quarter of 2020 after the government eased the COVID-19 lockdown measures and restrictions as the series of economic and consumption stimulus measures were introduced to revitalize the post-COVID-19 economic recovery. Digital business operators resumed their operations and received more business deals and projects. The COVID-19 pandemic has accelerated all parts of society, the public and private sectors, schools and universities to increasingly adopt digital technologies in order to stay afloat in the business. It resulted in digital business operators posting improved performances, but still behind the pre-pandemic levels. It is expected that the Digital Industry Sentiment Index will climb to 61.2 in the next three months largely driven by the industry-wide digitisation and adoption of digital-driven solutions such as Cloud Technology, Software, Social Media, Online Entertainments and Online Payments. Businesses will embrace digital technologies and innovations in order to expedite the digital transformation in organization.
Moreover, the depa conducted a study on the market value of the digital industry in 2018–2019, it expects the IT hardware industry to deal with difficulties in the next three years as the value of the IT hardware market is declining. It found that the value of IT hardware products and equipment as well as smart devices and use cases dropped from 325.261 billion baht in 2018 to 299.342 billion baht in 2019 due in large part to weakening demand and falling consumption of IT hardware products and equipment. The market switched to using more digital solutions and services, while customers particularly have a greater access to multiple types of digital services from their communications or mobile devices. It resulted in the value of the digital service market surpassing the value of the IT hardware market, which is on the downward trend. Even if the Digital Industry Sentiment Index indicated that digital business operators and digital providers have greater confidence, businesses and vendors in the IT hardware and smart devices still need support from the government in terms of design competition, exploring new markets as the IT hardware manufacturers do not want to be just the manufacturers for exports. Businesses also need support and promotions to grow their business domestically.
Dr. Nuttapon Nimmanphatcharin also mentioned about the development of digital manpower, saying that the growth pace of the digital industry will be in line with employment of skilled workers whose expertise in digital design skills such as Machine Learning in order to enhance efficiency and productivity in the digital industry. Such skills will help with cost reduction as the industry will look for digital personnel with specialized skills needed to drive the industry such as Data Analytic and Data Engineering.
The depa publicly reported the “Digital Industry Sentiment Index” on its website www.depa.or.th and on Facebook: depa Thailand for business operators and the public to use as a reference to adjust business strategies in order to further grow their businesses. It also included surveys on digital transformations in several aspects of the digital industry. Further inquiries, contact Policy and Promotion Strategy, the Digital Economy Promotion Agency (depa).