As Asia continues its growing adoption of cloud services, digitalisation, automation, Internet of Things (IoT) and 5G, three growing verticals have emerged: fintech, healthtech and logistics tech.
Asia is the world leader in fintech adoption, spurred by virtual financial services, popular application programming interface (API) software connectivity, and social media and e-commerce. China and India have the biggest investment and start-ups.
More businesses are also using online apps to handle their loans and payments. Fintech is expected to grow as the industry undergoes deregulation, while virtual bank competition intensifies with more licences being issued.
Healthtech in Asia is second only to that in the US. Services include cloud-based online medical consultations, sophisticated clinical trials, enhancement of the pharmaceutical supply chain, drug discovery through AI and biotechnology, digital therapeutics, connection of pharmacy professionals, and real-time generation of health data from prescriptions.
National health programmes are seeing governments collaborating with private companies, like manufacturers of smart wearable devices. There are even internet hospital models being introduced with data sharing and exchange across multiple sites. Regional partnerships offering online healthcare services, with partners like insurance or telco operators, are growing.
In logistics, the rise of e-commerce is a driver of improved logistics. Some supporting technologies include augmented and virtual reality, big data and machine learning, cloud logistics, enhanced sensors and fibre connectivity, blockchain and IoT.
As for tech infrastructure, China is the second largest cloud infrastructure services market globally, with India and Japan close behind. The next biggest Asian markets are Australia, Hong Kong Singapore and South Korea. The cloud market is expected to grow due to increased online learning and cloud computing. The largest cloud providers in Asia are Amazon, Alibaba and Microsoft.
Increasing cloud services adoption, together with strong fibre connectivity, IoT and uninterruptible power supply, is causing a growth in data centres, which are critical for remote data storage and processing. Growth in the Asian data centre market is expected to overtake Europe within the next two years.
5G development is also benefiting the producers of the printed circuit boards, semiconductor chips and radio frequency components that are needed for processing and bandwidth.
Although Asian tech growth has been temporarily slowed by Covid-19, growing vertical industries can create synergies and value to reinforce each other. They are also supported by a rising middle class, internet penetration, improving tech infrastructure, government health programmes, more talented entrepreneurs and a huge digitising Asian population. Expect to see a rebound in the Asian tech sector.
Lawrence Yeo is founder and principal consultant of AsiaBIZ Strategy, a Singapore-based management consulting firm providing Asia market research, business strategy development and export/FDI promotion services
This article first appeared in the October - November print edition of fDi Intelligence. View a digital edition of the magazine here.