Blog Post on Digital Transformation by Gerelmaa Batchuluun, AmCham ICT and Digital Economy Committee Chair
Technology has transformed the global economy in the last decade and made it easier to transfer knowledge. Now it’s giving emerging markets a competitive advantage, allowing them to be more agile and innovative in some cases than developed economies.
It is a historical time for many countries to prosper in a new global digital economy, but countries that are not ready will risk being left behind.
There are two parts to the concept of digital transformation. The first is about reorienting your organization to make strategic use of digital technologies like cloud platforms, mobile apps, social networks, connected infrastructure and products, and so on.
The second is about using digital technologies to change the nature of the business itself. You can think of these two parts as “transforming to digital” and “transforming digitally.” One is about digital technology-usage as a destination; the other is about actually changing how you take that journey. Every business needs to start in a place that reflects its business priorities. Digital technologies’ economic value is all about their ability to coordinate resources more efficiently.
But having the technology available alone will not guarantee success, no matter how innovative it is. Just as important as new technology is the social and economic environment in which technology is used. Technology will almost always be a force for growth, but technology is not automatically a force for inclusion. Without a deliberate effort to include everyone, digital technologies can end up entrenching existing inequality, which is one of the concerning issues in Mongolia’s socio-economy today.
Government, civil society, and the private sector should come together to craft a shared national vision. Everyone has a role to play in major economic transformation. Without a collective and robust national vision for supporting digital technologies and adaptations for each industrial sector, Mongolia cannot go forward that far by the sheer enthusiasm and driving force from the private sector initiatives leading the way until now.
The government has taken some initiatives in the past, including joint launch with an external organization called The Pathways for Prosperity Commission on Technology and Inclusive Development (Pathways), launched in January 2018 and ‘E-Mongolia’ discussion organized by the Offices of the President and Parliament of Mongolia, Government of Mongolia, and the ‘e-Governance Academy’ non-profit think tank and consultancy organization, a joint initiative of the Government of Estonia, Open Society Institute (OSI) and the United Nations Development Programme, on December 4, 2019. These are significant initiatives to be acknowledged yet need to be sustained and have to go hand in hand with the private sector’s practical approaches. In simple words, these policies and government visions need to be translated and be as close as possible to business executions. It has to nurture the betterment of businesses to transform digitally, not burden them with extra resources.
Geographically, we are inseparable from China unless we dig up the land and place it elsewhere. The most dramatic digitization story is in China, which has overtaken the US for the top five unicorn values and produced global technology leaders, including Alibaba and Tencent. Chinese companies have created ecosystems that incorporate the functionality of Facebook, eBay, and Amazon all in one app, that’s meant they haven’t had to create a vast infrastructure to facilitate their growth. Mongolia’s foreign trade is heavily dependent on China, and we have got no choice but to adapt to their means of doing business to maintain the economic partnership between two countries at its optimal outcome.
When it comes to ICT and Digital Economy, people assume that it’s only relevant to tech companies. But Mongolia’s commodity-based economy is proving otherwise. The mining sector has started adapting to the transformation and been leading it quietly. We should understand that transforming-digitally does not mean that we leave heavy or traditional industries out of the picture. They will transform internally and process-wise to improve their businesses using technologies while new sectors such as fintech, EdTech, MedTech, and other industries should be developed and allowed to be mashed-up with each other freely.
For digital transformation, like China, Mongolia could embrace the same structure with good nurturing policies to enable ICT and digital economy to prosper. For many ICT leads and allows businesses to flourish, we need to deregulate. Some individual licenses and requirements only slow the innovation process as they are designed for more traditional companies and only slow down the business cycle’s speed. Moreover, we should re-evaluate and rewrite the current regulations related to investment environments to support this sector.
Last but not least, humans are the key to this transformation. If your people are not ready for upcoming changes or trained to implement it, then there will be an inevitable failure. According to the change experts, 70-80% of the transformation change is dependent on human resources. Mongolian businesses should heavily invest in education and capacity training and readjust the national policy on education and lifelong learning.
The “digital transformation” is a complex process with numerous stakeholders who need to work openly and patiently towards a common goal. It will not happen in a life cycle of the one government; it has to be sustained and pursued regardless of the ruling party if Mongolia wishes to be part of this global shift and not stay behind. Through its newly launched platform, AmCham Mongolia, ICT and Digital Economy Committee is committed to playing a medium to bridge government and private sectors to pave that road successfully.