For the tech hubs of the future, look to Asia’s smaller cities

This is an update on a piece I’d written for Reuters six years ago on remote freelancing in emerging markets. It was written in part for a new Cisco report on Technology and the future of ASEAN jobs (PDF), launched this week at WEF.

 

Much of the disruptive change in Southeast Asia in the past five years has been been by adding formalized systems and layers to existing sectors, most of that in what broadly be called mobile commerce. Think Grab, Go-Jek, Lazada.

The investment has been concentrated, in country, sector and in companies. But the real change in skills and work in the long run may come more from the backroads of Southeast Asia, tapping into a vibrant but hidden economy of online knowledge workers.

According to data collected by Google last year, the majority of investments in Southeast Asia have targeted companies based in Singapore and Indonesia — together accounting for 92% of funds. In turn most of that money ($9 billion — 73%) found its way to unicorns — those companies with more than a $1 billion valuation — while companies worth less than $100 million got $1.9 billion and those between $100 million and $1 billion attracted $1.4 billion.

These figures are good, in the sense that it had taken some time for Southeast Asia to attract significant venture capital attention, but it illustrates how slanted the overall picture is. Those unicorns are: Go-Jek, Grab, Lazada, Razer, Sea Ltd, Traveloka and Tokopedia. All are essentially platforms for retail selling: transport, consumer goods, travel etc. All capitalize on inherent problems in the free flow of goods and people in Southeast Asia, because of inadequate infrastructure, be it physical, financial or social.

And most are now trying to extend their presence beyond the major regional cities. But I think what has been happening in these smaller cities and towns for several years may be the more significant development in the long run. Indeed, when these platform players bring their services to these cities, there may be an interesting confluence of improved infrastructure and pent-up B2C or B2B demand. It should be here that companies and governments are focusing their attention — on building infrastructure, on tapping into these self-replenishing skill pools, and hubs of quiet entrepreneurialism. In the long run these skills are going to help to even out and possibly reverse the long term trend of migration to the cities, or megacities.

Take, for example, 99designs, an Australian crowdsourcing design company. They’ve been operating for several years, providing a platform for graphic designers to submit their work and earn business. I interviewed their CEO six years ago and he told me he was awestruck by how one city in Indonesia — central Java’s Yogyakarta — consistently beat other cities for quality and contracts won. He eventually went to see for himself, and was greeted like a rock star by the city’s 99designs community — one of the biggest in the world. Those young men and women were tapping into a deep well of artistry that stretches back hundreds of years, and can still be seen in carvings, batik and other artwork around the city.

I asked 99designs for an update, and they told me the trend has only increased: 95% of the Indonesian designers on the platform live outside Jakarta. Nearly 70% of them live outside the country’s top five cities. This is not just an Indonesian phenomenon: In fact the numbers are higher in the Philippines and India, two other big contributors to 99designs.

I checked Upwork, one of the main providers of freelance services and I lost count of the number of services being offered by freelancers based in Yogyakarta (and in other Indonesian cities like Makassar and Medan.) These services are not basic, either: they range from Ruby developers to 3D rendering artists.

Another important thing to note about these freelancers is that they are constantly taking on new skills. For this piece I caught up with a Philippines librarian I had met when I wrote my story six years ago. Back then Sheila was using her library skills to work with clients in Australia and the U.S. to enter metadata as they digitised their libraries. Now, she tells, me she’s taken some online courses in personnel management and is now working as a project management for a startup. Freelancers are well-motivated to acquire skills and their clients are keen to help them do it because they like working with them.

The implications are clear. As technologies emerge and develop more quickly so will companies have to look elsewhere for skills. This benefits freelancers like Sheila because they can more readily and rapidly identify what skills they should acquire and position themselves. The top fastest growing skills on Upwork in Q2 2018, for example, included blockchain, Google Cloud, ecommerce software volusion, risk management and rapid prototyping. While most of these skills are likely to be found in the U.S., they can also be found in Southeast Asia, where rates are significantly lower: rapid prototyping in Southeast Asia fetches mostly $10-30 an hour, whereas in the U.S. evenly between $10-$30 and 30-60 and 60 and above). Of course there are many more in the U.S. offering that skill, but expect that to change.

This hidden economy is growing, and is impressively independent. But it could do with support. This will come in part as Go-Jek and others further expand beyond the big cities, bringing improved transportation and better support services. But governments too, could lend a hand. Internet connectivity is still patchy in some parts, and a lot of those hoping to switch from a long commute to working at home often find it hard to get that first job. If those who do succeed can be encouraged to help build out these communities and share their skills, a whole new generation of home-based knowledge workers could lift towns like Yogyakarta and even further afield into hubs of the future.

2017 Predictions

This piece was written for the BBC World Service’s Business Daily.

This year is going to be an interesting one, but in technology it’s going to be particularly so. Social media is going to see some reverses, as users start to wake up to the compromises they make in sharing information with companies, governments and the world. But the real progress is going to be making our machines understand us better, in ways that we want.

Artificial intelligence: you’re no doubt rolling your eyes at the phrase, given how many times this technology has been promised as being around the next corner. I’m with you. But I think the focus has been on the wrong place: voice. Apple’s Siri has not been a huge success — except for my daughter, who loves talking to an adult she can be rude to — and Amazon’s Alexa, though impressive, is going to confine itself to those places where we feel comfortable talking to machines: the home.

That makes it inherently limited. Ours is actually a largely text-based world — we still use email, we prefer to text, or Whatsapp our friends, and this is where AI is going to be most useful. I already use an AI assistant called Evie to schedule my appointments; she parses emails I send her and, with a little human help, sets up meetings and calls on my behalf. I save an hour or so a week.

Expect to see more of this: using natural language – the way we usually write — to interact with devices, not via special apps but via whatever channels we already use. It’s our devices — fridges, computers, databases — that have to learn our language and preferred medium, not the other way around. AI will be a success if it can master this, and this year will be key.

Indeed, the same principle will be applied elsewhere: removing the machine-like elements of our interactions. AI will help us talk to machines better, but machines will also help immerse us in experiences. Pokemon Go, the mobile app that led many people astray catching and battling weird critters, was a hit because it took a decade-old technology, augmented reality, and bolted it onto something that people actually found useful. Well, not useful, exactly, but compelling.

Augmented reality took technology into the real world, and gave it an enticing layer. The next step — using technology to shrink the distance between people and the real world. Optimists are calling it teleportation — moving you to places you wouldn’t normally go, or can’t go. That could be a 360 degree video from a live event, or drones filming from way above you, or even experiencing something akin to physical touch with someone whose far away from you. A Singapore startup offers a remote kissing machine, which it of course has called the Kissenger.

Industry is getting excited about this because it sees the possibility of creating a digital twin of a real world device — a turbine say — and then manage and experiment on that digital version of the real thing. A Malaysian company does something similar with corpses — scanning the deceased so that post-mortems can be conducted digitally. The original body is left untouched — which may please relatives, but also means the number of post-mortems can be limitless, and performed by someone on the other side of the world.

All of this technology is available now, but it still takes some vision and money to bring it to market. But what people want is clear enough: technology should bring people closer to each other and their machines, but stay out of the way as much as possible. We may not successfully wean ourselves off our mobile screens any time soon, but we could at least make what we see, hear, and do on those screens as useful, exciting and human as possible.