The Digital Divide

By any measure, the Asia-Pacific (APAC) region – a collection of some 45 countries occupying almost 30 million square kilometers of land – has an impressive position on the global economic stage.

It’s home to 4.7 billion people (60% of the world’s population) – more than the Americas, Europe, and Africa combined.

It contributed more than 54% of global GDP in 2023 (a figure that is projected to rise to 58% by 2030) and accounted for 70% of GDP growth
during the past decade.

It’s the world’s trading hub, representing more than 50% of global trade value in 2021, 49 of the 80 largest trade routes, and 18 of the 20 fastest-growing trade corridors.

And today, the region is at the forefront of the world’s digital revolution. China is investing heavily in automation, robotics, and other technologies to boost efficiency and productivity across its manufacturing base; India now boasts over five million software engineers and more than 400,000 data scientists, with demand for the latter forecast to hit one million by 2026; and Singapore, despite its small size (six million people, 718 sq km), leads the world in AI spending as a proportion of GDP.

This regional focus on technological innovation and transformation capabilities hasn’t gone unnoticed. Zero100 conversations with supply chain leaders at Western multinationals confirm that they see China, India, Singapore, and other countries in the APAC region as major sources of digital talent.

The challenge for CSCOs and COOs is not only how to best harness APAC talent for business success but also how to ensure that supply chain staff in their home regions acquire the digital skills required to improve customer experience, reduce costs and lead times, and bolster company revenues.

Our latest report, available now to Zero100 members, maps how leaders in the US and Europe can harness talent in the region for business success while also developing digital capabilities back home. This preview is just a small sample of our research and takeaways.

What Sets APAC Talent Apart

Discussions with 20 supply chain leaders at Zero100’s Forum event in March identified a geographic digital talent gap between APAC countries and the West rooted in four key factors:

ONE

The Education System Provides a Strong Foundation

Arguments rage about the quality of engineers and computer scientists in APAC countries compared with their peers in the West, but the former certainly have a numerical advantage. Together, China and India produce around 400,000 computer science graduates every year vs 65,000 in the US.

TWO

Hard Work and Ambition Shine Through

Supply chain leaders point to the industriousness of APAC staff as a second reason for the region’s digital advantage, with the opportunity to acquire knowledge, develop skills, and grow their careers serving as a key driver for many younger blue- and white-collar staff in the region.

THREE

Digital Skills Training Is Expanding Rapidly

Western and Asian companies are investing heavily in training programs to upskill both prospective (students) and existing APAC employees. This is part of a broader push to “elevate local talent,” as one executive put it, and reduce the number of expats managing operations.

FOUR

Lower Costs Are Matched with Higher Capabilities

APAC locations continue to be attractive to US- and European-based companies for cost and 24/7 operational reasons. Increasingly, they are also being recognized for their technology innovation and transformation capabilities.

Talent Strategies for Western Firms

Fundamentally, leaders will have to balance two key strategies that run somewhat counter to traditional outsourcing and offshoring practices.

1. Local Empowerment: Strategically using APAC locations as part of network diversification efforts and to serve regional customers puts a premium on local innovation and leadership. A supply chain leader in the apparel manufacturing industry argues that taking a project management office approach to technology matters in Asia doesn’t work. It’s better to have tech talent talking directly to business users locally than trying to manage projects from afar. This ensures that the solutions developed meet local needs and timeframes.

In a recent article for Harvard Business Review, Sowmyanarayan Sampath, CEO of Verizon Consumer in the US, argues that putting a senior executive (or “czar”) in charge of new technologies like AI is “often a big mistake.” This is because they sit too far away from where the work happens. Instead, he says, it’s better to harness the talent of frontline employees, such as those in supply chain, and support them with “platforms, data engineering, and governance” from a center of excellence.

2. Home Development: If Western companies are harnessing digital talent effectively in their APAC supply chain operations – whether to serve customers in the region or support global transformation initiatives – why should it matter if talent in North America or Europe lags on digital skills?

One reason is the changing nature of technology. The speed of developments in AI means that “talent has to sit closer to the business to add value,” argues the SVP of Digital Supply Chain at a US high-tech manufacturer. A second and connected reason is companies’ shifting global footprints. As supply chain activities migrate from China to onshore or nearshore locations, she says, digital capabilities need to follow. Think of it as “skills reshoring.”

Many Western companies are already engaged in a multi-year process of realigning their supply chains away from a highly global operating model to more regional and local ones. With significant productivity gains, improved customer experience, and superior revenue growth on the table, the time to develop a balanced geographical talent footprint for the AI-powered digital world of the future is now.

Through Zero100 data and analysis, as well as real-world insights from senior supply chain leaders, this report provides a roadmap for supply chain leaders looking to draw on digital talent in APAC countries, build digital capabilities at home, and facilitate digital innovation across regions.

To access the full report, visit members.zero100.com.

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