Spotting the green shoots of recovery in a post COVID world
Updated: Jun 19, 2020
Whilst we have seen 'lock down' status relieved across many Asia locations, there is no exact timeline on when 100% normal daily movement will be restored regionally and when the economy will respond accordingly. That being said, it isn’t all doom and gloom! There are many sources of optimism in the market that we should take stock of to ensure we retain perspective.
The following industry update from a leading Fintech startup is one such source of optimism and it really illustrates the robust nature of the South East Asia digital ecosystem.
‘We have raised RM 3.8 million in the past 20 days of the Movement Control Order, putting us on track to hit our revised maximum target of RM 4 million. Thank you to our 123 investors...’
This update may seem highly uncharacteristic given the typical news stories we are bombarded with predicting doom and gloom for the economy. Off the foundation of a hugely sustainable South East Asian digital ecosystem, the outlook going into 2020 was extremely rosy. In 2019, the region’s internet economy had hit US$100 billion, which was a 39% increase from US$72 billion in 2018. In similar fashion, investor funding in the SEA region has been enjoying steady growth, with Internet firms raising US$7.6 billion in the first six months of 2019 - a 7% increase over the same period of time in 2018. Furthermore, the doubling of average deal size in early-stage funding over the last three years also serves as a clear indicator of investor confidence in the robustness of the regional economy. Therefore, while we cannot deny the impact of the recent crisis, we must also retain perspective regarding the robust economic foundations in place, supported by a rapidly expanding and highly digitally engaged domestic market.
Another source of optimism is the willingness of companies to embrace a new view of workplace management that is underpinned by digital technology. If there is any sort of silver lining to the current situation, it’s that changes in terms of how we work that would normally be rolled out in stages over a few years have been forced through overnight by COVID-19, accelerating what is an already growing trend towards digitalization into hyper-speed. From simple ‘virtual meetings’ to the complexity of automating processes through contact-less, IoT based solutions, digital services and technologies are now fully galvanized as an essential component in society, thus promoting sustained adoption, growth and further investment. Digitally agile firms are successfully navigating the ongoing crisis, while those that need to make up ground are already taking steps to rapidly up-skill and drive the necessary culture change in response to the challenges facing prevailing business models.
One more thing to note is that hiring has not slowed down as much as many predicted would. Unfettered by perceived economic uncertainty, many companies are viewing the current conditions as an opportunity to invest in headcount they may not normally have had access to and are forging ahead with hiring activity. Much of the region has been hampered to varying degrees by the fact that the demand for talent has constantly exceeded supply in recent years. Quality talent in the field of mobile development, software development, UI/UX, DevOps and Big Data are so rare that they are often referred to as proverbial unicorns. The fact that companies are still hiring indicates their belief in the resiliency of the economy to bounce back and for business operations to return to normal sooner rather than later.
In conclusion, we shouldn’t lose sight of the macroeconomic context, no matter how bleak the current situation might appear. Whilst we can expect companies to exercise caution, as we all navigate towards full recovery, we are seeing beams of optimism emerge. It is crucially important we don’t lose sight of the bigger prize, namely Asia’s rapidly ascending digital trajectory, one which is currently outpacing the US and most of the the rest of the world. As a case in point, the payment culture in China is already virtually cashless at this point, which is already having a major impact on digital adoptions for consumer processes across the wider Asia region. Outside of these observations, you may simply prefer to consider things from as philosophical a perspective as possible. If so, let me leave you with Winston Churchill’s famous quote - ‘A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty’