The Digital Revolution: From Mandalay to Manchester

In the era of the global digital distribution, products made in Mandalay can be sold in Manchester cost-effectively – the key to that economic miracle is the mobile phone.

The Myanmar Times spoke to James Song after his trip to Phnom Penh in Cambodia for the World Economic Forum (WEF) on ASEAN 2017. This year, young people, technology and growth are the key themes of the Forum.

James Song is a managing principal and co-founder at Faircap Partners, which is an American investment management firm focused on building Myanmar’s economy. Mr Song was made a Young Global Leader by the World Economic Forum in 2016.

From Mandalay to Manchester

The key lesson for the Myanmar government is that Myanmar has the space to lead, not follow, the ASEAN by introducing inclusive policies that harness the power of the people, according to Mr Song. For example, if the country wants to develop entrepreneurship, the government should include real entrepreneurs in the legislative process.

“What’s particularly important to learn from the ASEAN community is that a lack of inclusion hinders progress.

“ASEAN’s governments, for the most part, are segregated from the people they are trying to help and the issues they are trying to solve. But how do you help people when you don’t know anything about them? And how do you solve real problems when stakeholders aren’t participating in the conversations you’re having at the WEF?” he asked.

The world is changing rapidly because of technologies, and global digital distribution has changed the economic landscape.

“[With digital distribution,] you can take your product made in Mandalay and sell it in Manchester cheaply and quickly. And the key to all of this is the mobile phone.

“Ten years ago you had to advertise [products or services] on billboards or run TV commercials. Today, you push your messaging out on Facebook or Instagram or Youtube and it gets shared globally,” he said, adding that Myanmar businesses need to understand that they have global reach through their smart phones nowadays.

Adapting the Fourth Industrial Revolution

The First Industrial Revolution took off with new manufacturing processes with steam power and water, followed by the Second with the advent of electricity-driven mass production. The Third used electronics and information technology to automate production. Now, Klaus Schwab, founder and chair of World Economic Forum, proposes that a Fourth Industrial Revolution, a digital one, is taking place, characterised by a fusion of technologies which blurs the lines between the physical, digital, and biological spheres.

“The possibilities of billions of people connected by mobile devices, with unprecedented processing power, storage capacity, and access to knowledge, are unlimited.

“And these possibilities will be multiplied by emerging technological breakthroughs in fields such as artificial intelligence, robotics, the Internet of Things, autonomous vehicles, 3-D printing, nanotechnology…” Mr Schwab wrote back in 2016.

For Mr Song, Myanmar needs to adapt the Fourth Industrial Revolution and start adopting digital technologies. Multinationals need to be alarmed at the prospect of being eased out if they refuse to evolve.

“Remember in 2013, when lots of people in Myanmar were still using typewriters and that seemed so antiquated?

“That’s where most global businesses are right now, stuck in outdated business models that are slowly dying. The only reason why they’re dying slowly is because they have these huge cash piles they’ve built up over the last few decades that they’re using to stay afloat.

“We are just starting to see the results of this around the world, with large retailers closing locations at scale, because they didn’t innovate and adapt to an world. More of that is going to happen and it’s going to happen soon,” he said.

For Myanmar to stay afloat or even to succeed, the country has to fully adopt digital technology, leapfrog traditional infrastructure development and embrace bleeding-edge solutions, such as block-chain and mobile payments. The impact, according to Mr Song, is that these would make governance cheaper, easier and with more transparency.

“Ultimately, Myanmar needs to open up business by making it easier for ordinary people to operate in the country. This will drive innovation through increased entrepreneurship, allowing the market to help Myanmar adapt to the Fourth Industrial Revolution.”

Preparing for the AI challenge

“The driving force of globalisation is not trade but technology,” argued Arancha Gonzalez Laya, executive director of the Geneva-based International Trade Centre (ITC) at the Forum, who advocates that countries should pursue a domestic agenda that builds the competitiveness of the economy and skills of the people.

Mr Song highlighted Mithrandir Labs, which he founded this year, to illustrate how Myanmar can achieve that. Mithirandir Labs uses predictive analytics to improve education.

“I did that [building the firm] because a skilled labour force is a function of education, but Myanmar doesn’t have 10 or 15 years to wait for its people to get educated: we need skilled people now.

“Predictive analytics, as a technology, is the only thing available today that can reduce learning times by over 50 percent, and no one is really using it because everyone is focused on automating external processes with AI instead of improving ourselves with AI. But the problem we will all face in the near future is this: as AI advances and becomes ubiquitous, the countries and businesses we deal with will deploy it against us, and we should be ready with our own AI to counterbalance, or even win, against that,” he told The Myanmar Times.

In other worlds, AI is similar to having an employee who is 100 percent dedicated to his task without getting hungry or ill or distracted. The AI employee makes decisions “better than anyone else in the world”, and he makes them instantly, rarely making a mistake, because human errors are not possible for him.

“Now imagine all your employees were like this; that’s what everyone is thinking about, and for Myanmar to stay competitive, that’s what we should be thinking about too. To get there, we’ll need to get smart about AI really fast, and that starts by using AI – specifically predictive analytics – to maximise our ability to learn,” he explained.

A week ago, Mr Song took his team to a Rohingya refugee camp in Bangladesh to test the technology. They selected females for the test in order to provide equal opportunity. The women chosen had no education, as they entered the camp as small children, never went to school, got married at 15 and started having children. Now they are 25 years old and don’t know anything outside of refugee life.

“If the technology really works, we should be able to train a team of them to build a global digital business in just one week – and we did exactly that. The test was a resounding success.

“My team is actually en route to the United States right now to set up a product fulfilment for them. “It showed the technology works irrespective of background or education level; it just makes you really competent, really fast,” he said.

Youth inclusion and representation

Youth is another major theme for this year’s Forum, where the Philippine President Rodrigo Duterte declared that, “The Philippines, along with other Southeast Asian countries, is in a demographic sweet spot. The youth is a key sector in which we must invest.” Mr Song believes the Myanmar government and businesses should invest in human capital by inclusion and representation.

“Representation for young people needs to be included in every level of government. Just because you are young does not automatically mean you do not work every day or do not have children of your own or do not contribute to society. The youth are stakeholders too,” he said.

“Myanmar can also invest in youth by giving them high-quality education – for free. You want smart, informed people building your country and your businesses, and so education is where most of your investment should go,” he continued, stressing that Myanmar needs to accelerate its education strategy, and part of the reform means using predictive analytics and, possibly, mobile phone-based learning.


Source: The Myanmar Times.


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