Digitalisation 2020 & 2021 – catalysts, breakthroughs, future developments

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By Jason Loh

Analysts and pundits didn’t foresee Covid-19 coming in 2020 and that the virus will accelerate the digitalisation trend – a seismic or tectonic shift in its own right – resulting from the fragmentation of the physical processes and the emphases on a low touch economy as part of compliance to the standard operating procedures (SOP) to break and contain the transmission.

Not all of the digitalisation trends are precipitated (in the sense of having their momentum accelerated) by the unprecedented spread of Covid-19 though – some would have been in the works for years and the breakthroughs only came this year. Likewise, digitalisation trends for 2021 would also reflect similar developments. That is, Covid-19 would have been the impetus and catalyst – in contradistinction from “cause” – for the rise of some digitalisation trends whilst others would have already been pursued beforehand.

Let’s take a look at some of the digital lessons from 2020 as well as looking ahead to 2021.

Covid-19 has encouraged and enhance the use of cloud services for physical operations such as cloud kitchen. What this means is that cooking and delivery services could be centralised rather than from disparate collection points such as various restaurants although not necessarily. The underlying purpose is that dining-in (“front-of-house”) areas are removed from the overall business process thus saving costs (labour/manpower, other operational or overhead costs, i.e., dining assets and not least space).

In Malaysia in particular and the region in general, online food delivery businesses such as GrabFood (through Grab e-Kitchen) and FoodPanda have been leveraging on the cloud kitchen concept due to high demand and cost effectiveness. The trend for cloud kitchen which came into the fore in 2020 is expected to grow and expand in the major conurbations of the Klang Valley in tandem with the growth and explosion of e-commerce in the country.

There’s also the trend of hyperconverged infrastructure/technology (HCI) whereby businesses and enterprises can save costs and physical space too. Data management and cloud specialist Nutanix defines HCI as the “combination of common datacentre hardware using locally attached storage resources with intelligent software to create flexible building blocks that replace legacy infrastructure consisting of separate servers, storage networks, and storage arrays”.

International Data Corporation (IDC), a leading information and communications technology (ICT) market intelligence firm, has predicted that the HCI market will grow US$7.64 billion in 2021. In Malaysia, local logistics and express carrier giant Gdex has adopted Nutanix Hybrid Cloud to keep up with demands in e-commerce for scalability and business-to-consumer (B2C) operations. 

And then, we have augmented reality (AR)/virtual reality (VR) which is increasing its presence in our tourism industry. Again, Covid-19 which has resulted in partial lockdowns and in Malaysia’s case, the movement control order (MCO), has massively impacted our tourism sector which is the third major exporter and foreign exchange earner.

AR/VR is the digital gateway and portal to the on-site tourism experience. Usually, it’s for marketing and promotional purposes and allows potential on-site tourists to enjoy an audio-visual sampling of the “full package” on offer – the real world, tactual experience. All one needs to access the virtual experience is a smart phone, laptop, tablet or personal computer (PC).

Moving forward, the artificial Intelligence of Things (AIoT) which is basically the combination of artificial intelligence (AI) and the Internet of Things (IoT) is making steady and even rapid headway. To quote from Bernard Marr of the renowned Forbes magazine, IoT devices such as sensors, universal remote controllers, and biometric scanners can be likened to a digital nervous system while AI is the brain. To further quote Bernard Marr, “… [W]hen AI is added to the IoT it means that those devices can analyse data and make decisions and act on that data without involvement by humans”. With the advent of 5G technology and smart cities, AIoT is expected to emerge as part of the new norm in the near future in our cities and homes too.

While not exactly part of the digitalisation trends, the Nature online journal on Nov’ 30 has reported that after years of pain-staking efforts, finally an AI called AlphaFold developed by Google offshoot DeepMind achieved a gargantuan leap in computational biology, namely determining a protein’s 3D shape from its amino-acid sequence or what is popularly known as “protein folding” where “structure is function” (an axiom of molecular biology). As proteins are the building-blocks of life, unravelling its molecular structure would yield insights into the mysteries of life so that finding treatments and cure for such intractable diseases as Parkinson’s, producing viral drugs for Covid-19 or identifying suitable enzymes that biodegrade industrial wastes are basically tied to protein structures.

According to the Deep Mind website, AlphaFold was taught (deep learning) by reproducing to it the sequences and structures of around 100,000 known proteins. Come 2021, we could expect to herald the beginning of a new chapter related to many scientific and industrial applications which hopefully extends to agriculture and food production, air pollution control (carbon capture and storage) and water treatment, among others.

Connected to that AI breakthrough in predicting protein folding is, of course, quantum computing that represents the leap from bits (binary – 0 or 1) to qubits (0 & 1 at the same time) – based on quantum physics and mechanics (of the simultaneity-duality of superposition and entanglement). For now, quantum computing can be deployed for complex tasks such as predicting the 3D shape of protein folding and structure.

As for blockchain or distributed ledger technology (DLT), it’s fast making its mark in supply chain management (SCM) – with the strategic collaboration between public and private sectors. In Malaysia, the use of blockchain by the Royal Malaysian Customs Department (RMCD) will ease and facilitate import-export transactions of the private sector stakeholders (shipping/logistics, traders). Specifically, the TradeLens platform – as jointly developed by AP Moller-Maersk with IBM and based on the Collaboration Application Programming Interface (API) concept – ensures that all logistic activities such as haulage, warehousing, shipping and freight forwarding at both domestic and international levels can now be wholly integrated.

Notwithstanding, will quantum supremacy which Google had claimed to achieve finally constrain the full potential of blockchain technology? According to Deloitte, someone with an operational quantum computer who has access to the public key (public address) could then falsify the transaction signature known as “hashing” which is an encryption mechanism (in the form of a cryptographic function) serving as “proof of work” that is linkable to another block of transaction data (hence forming a blockchain) and therefore hack to gain entry to the private key (i.e., for the purpose of decryption of the signature). Be that as it may, quantum computing could easily be deployed in blockchain technology to fend off would-be hackers or rogue miners.

And not least, robotic process automation (RPA) is increasingly used in fintech (financial technology). In its Fintech and Digital Banking 2025 Asia Pacific, IDC reported that financial liberalisation, drive towards cost-reduction, intense competition from counterparts as well as P2P (peer-to-peer) players, wafer-thin net interest margin, etc. are catalysing banks to further automate, e.g., through RPA software that enables computers to process manual workload of business process more efficiently and effectively (such as triggering error-free responses).

Finally, autonomous driving will soon be an in-thing in Malaysia as it is in other parts of the world, not least across the Causeway (in Singapore). eMooVit Technology Sdn Bhd is a local start-up started in 2016 specialising in driverless agnostic vehicle software for urban environment routes. The software can be used in different applications such as first/last-mile transportation, logistics and utility solutions. On Dec 23, eMoovit was reported to be the first company to use Malaysia’s first self-driving vehicle testing route as announced by Futurise Sdn Bhd, a wholly-owned subsidiary of Cyberview Sdn Bhd. As reported in The Edge Markets, the 7km Cyberjaya Malaysia Autonomous Vehicle (MyAV) Testing Route was jointly developed by Futurise and the Ministry of Transport (MoT) under the National Regulatory Sandbox (NRS) initiative for the development of autonomous vehicles or self-driving vehicles.

All in all, Malaysia is well-positioned to leverage on all of the highlighted digitalisation trends, one way or another.

Jason Loh Seong Wei is Head of Social, Law & Human Rights at EMIR Research, an independent think tank focussed on strategic policy recommendations based on rigorous research.

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