Digitalisation in Myanmar

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published on May 23, 2018​
 
Interview with Lutz Koch

 

   
If the topic of digitalisation in Germany is written on the agenda, it can be expected that you will not just get a plain definition for the term. The repeatedly mentioned keywords are “disruptive technologies”, “innovative business models” or “autonomization”, which in turn is often summarized under the term “Industry 4.0”. But today we want to talk about Myanmar. Please give us a brief insight into what is meant by the term digitalisation in Myanmar.

During the years of isolation, no one really heard about digitalisation in Myanmar. However, since Myanmar's integration into the global economy, things have changed. A large number of foreign companies have established a presence into the country, particularly in the telecommunications sector. The entree of the mobile phone into the Myanmar market was the first step towards digitalisation, and has since then boosted the digital evaluation. Throughout the following years, the bank industry also set sail for innovation and invested into modern tools like digital transaction technology. E-commerce is also currently booming. That openness to the world lead to the introduction of new technologies to ease business operations. That said, the transition to a digital nation takes time and still needs to be supported by education and investment measures.

  

Digitalisation is a cross-industry and cross-company topic. How do you assess the current situation in Myanmar - Has society already internalized the topic, do companies understand the change or is it more likely to try and endure the topic? Which sectors are already on the road to success, which are lagging behind, maybe even traditionally?
 

Myanmar is in the middle of its transition to digitalisation, the pace being set by its growing telecommunications infrastructure and the improvement of connectivity. The banks are using digital services. Private companies are setting up data bases to centralise information, to ease internal processes and to achieve higher efficiency.

 

Even the Government has launched several e-programs, and will soon also launch a new digital system for company registrations. These are huge steps towards a digital economy. That said, Myanmar is still in transition and needs to find a balance between the digital evolution and the physical necessities, given that many residents in the countryside do no not even have web access and are thus not aware of the value of the Internet. Therefore, Myanmar needs to continue with some urgency working on the transformation of a traditional infrastructure into a digitally compatible one – not only in its big cities, but nationwide.

    

What challenges and opportunities do you see for companies that already work locally to master this rather difficult mammoth task?

Creating awareness amongst locals for the necessity of digitalisation remains difficult. Old analog systems are far from being efficient but are very often favored by most residents as well as by governmental institutions, since they are familiar and thus easier to understand Change in Myanmar is desired on one hand, but on the other hand still widely feared, as the outcome and possible negative effects are unclear upfront. One of the major challenges in this regard is convincing the population ofr the benefits of digitalization. Equally huge opportunities are lying in a huge market potential due to the far underdeveloped level of digitalisation and the still widespread use of analog systems.

   

What points must be given special attention in the transformation in Myanmar (for example: cybersecurity, data protection, change management, cloud computing, ERP systems, (tax) compliance systems, digital payroll, value change, blockchain technologies, etc.)? Do you see local cultural, social or economic advantages that speak in favor of an easier transformation?

 

Although digitalisation provides advantages and efficiency, it also brings along various challenges, e.g. in matters of cybercrime and data protection. Currently, neither government nor private companies are well prepared to face cyberattacks. They both need more structures and more technical knowledge to handle the threats. The government has postponed most investments in cybersecurity measures due to the high expenses involved, and has not even drafted any legal framework regarding cybersecurity.

 

As to data protection, Myanmar faces similar issues as with regard to cybercrime. While the General Data Protection Regulation (GDPR) will enter into force in the EU on the 25th of May 2018, providing better protection and better transparency, Myanmar has not even come forward with a legal data protection framework. Therefore, the current legal framework needs to be adapted to meet the requirements of the new digital environment and to protect sensitive personal data.

  

The digital change need to be lived up to and promoted by the company leadership in order to prevent the transformation from being jeopardized. Does the local government provide support and funding opportunities for the first steps towards digital transformation? Are there investment programs to attract ambitious digital pioneers? Have incubators been installed in order to promote innovative business models and to accelerate e.g. establishment of start-ups? 
 

While one of the main challenges upon implementing new technologies and concepts in a new and underdeveloped market remains the lack of education and training , some private companies, willing to support emerging markets such as Myanmar, place investments into and promote entrepreneurship and technology, particularly in start-ups. They provide support to help local businesses grow and succeed. They also provide financial services and try to connect local companies with foreign investors., The government itself does not provide private companies with much financial support. However, it  started to help young people to develop, emerging entrepreneurship through an innovation center.

 

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