We have said our collective goodbyes to 2019, and 2020 is opening up before us. As we move into the new decade, it is time not just to look ahead, but to reflect on the journey of recent years.
It is undeniable that data and digital disruption were the major drivers of the decade that has just passed. Data-driven and digital transformations provided the catalyst for sweeping change in the 2010s, spurring both public and private organisations towards a new generation of technology and opportunity. That journey was not without its challenges.
Digital transformation should, ultimately, offer new ways of working and unlock fresh opportunities for businesses. But the process of transformation itself is tripping up many companies. BCG analysis undertaken in 2017 shows that 70% of publicly announced digital transformations failed to achieve a company’s stated ambitions, timelines, or both.
Business leaders are often uncertain about how to navigate these transformations. BCG analysis is clear that, despite the eye-catching nature of emerging technology, just 20% of our focus should be on technology itself, 10% on strategy and algorithms, and 70% on fundamental organisational change.
We should be in no doubt that data and digital will continue its expansion throughout business and society in the decade to come. If Malaysian businesses are to flourish, they must embrace the nature of cultural change inherent in that 70%, central to which is building a lifelong learning mindset and supporting the workforce to be skills-ready and skills-relevant.
In a study of over 360,000 individuals undertaken by BCG, Decoding Digital Talent, we revealed that more than 75% of Malaysian respondents believed their jobs will be greatly affected by global megatrends of technological transformation and globalisation in coming years, among the highest of countries surveyed globally.
That’s a notable question mark for the nation’s evolving economy. Malaysia’s digital economy alone was worth RM267.7 billion in 2018, making up 18.5% of national GDP. That is a remarkable achievement, but there is greater opportunity to come. The key will be pushing this digital evolution beyond large established corporations — a transforming opportunity for the SMEs that make up over 95% of Malaysia’s businesses, but just under 40% of its GDP.
There is a welcome boost of RM21 billion funding over the next five years announced under Budget 2020, aimed at raising productivity through investment in new technology for business. It is important that organisations that benefit from this investment don’t overlook the fundamental 70% focus that may steer such transformation’s success.
This need for cultural transition within business, and increasing focus on appropriate skills for a future world of work, frame a landscape where individuals, organisations and policymakers face growing pressures to transform.
Learning to take charge of individual change
The job market is evolving, which means individuals must strive to evolve along with it. The average individual spends less than 90 minutes building new skills and knowledge each week. That is simply not enough. Individuals will need to triple their learning time to over five hours per week in order to meet changing workforce needs.
The key to this transformation will be embracing learning as an ongoing part of your personal and professional development, rather than a single leap that must be taken at set points in your career. That process is no longer a series of individual steps, but a continuous case of progress to reach the top of the mountain.
Skills as a new strategic priority for employers
In the new reality of a changing workplace, individuals are eager, and indeed expect, to learn new skills. Seventy per cent of individuals surveyed in the Asia-Pacific in BCG’s Decoding Global Talent series noted a willingness to retrain for a new job. It is up to the organisations to create the right framework to support and empower them through the learning process.
This challenge is further amplified by recognition of a growing global skills mismatch, as traditional educational systems develop the next generation of talent without appropriate skills for the future job market. BCG estimates this shortfall in skills impacts around 1.3 billion people worldwide, imposing a 6% annual tax on the global economy through lost labour.
Organisations need to understand learning as a holistic and integrated part of their business. There is no room in the new workplace for a siloed mentality where workers are shuffled one-by-one through a human resources department for standard episodic learning processes.
The skills agenda should be a core part of your business strategy, providing an environment where skills are learned, and relearned, through embedding learning into day-to-day routines and organisational processes. As you focus your businesses on the increasing importance of agile operations, so too should you position your learning within the same agile framework.
A public policy of being skills-ready
Recent government announcements to focus efforts on science, technology, engineering and mathematics (STEM) and technical-vocational education and training (TVET) offer an encouraging foundation. The goal of increasing the number of Malaysians focusing on these professions from 44% to 60% is a positive step. But it is vital that businesses embracing these new professionals also embrace the realisation that learning is now an essential and ongoing process. Only then can sustainable success be nurtured into the future. Policymakers have an important part to play in that process.
Retraining and reskilling the existing workforce are equally important levers in embracing a better economic future for Malaysia. This can not only help improve economic prospects, but also provide an important social foundation that helps the nation react to, and embrace, technological change.
Government should work to understand and deliver industry-focused skill forecasts that inform policy decisions. That includes identifying key workforce gaps and strategically planning a response that supports the future skills agenda. Singapore’s “SkillsFuture” is a great example of such initiatives, offering a framework to support career-long learning opportunities for citizens. The Republic of Korea’s fourth National Lifelong Learning Promotion Plan offers another example of an integrated strategy designed to empower people and society in partnership.
The recent announcement by Malaysia Digital Economy Corporation (MDEC) of an end-to-end support process under a new digital talent development strategy framework may well offer the kind of strategic vision required. Industry will no doubt be waiting eagerly to see how such a vision will emerge. Supporting continuing development of both local and global tech talent will be key in ensuring we have a workforce fit for the future.
Navigating digital change
The river of change is all around us. Whether organisations are ready or not, the time of digital transformation is now. The current will only grow stronger in the years ahead. We have what we need to make this a success, we just need to embrace it.
We must learn to adapt quickly, to embrace the skills for tomorrow. That is how we ensure success for Malaysian society and Malaysian business. Only by working together can we navigate the best route through the river of change ahead.
Sagar Goel is an associate director with Boston Consulting Group and leads BCG’s People Strategy practice in Southeast Asia