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Business trends

COVID-19 spurs digital shift for companies in Asia

Japan's NEC aims for 5,000 tech experts, Singapore's OCBC hires over 3,000

NEC plans to raise the number of digital experts on its staff to 5,000, from 3,000 now, amid rising demand from clients for digital transformation advice in the wake of the coronavirus outbreak.

TOKYO -- As the novel coronavirus pandemic encourages businesses to move more of their operations online, Japanese and Singaporean companies are looking to beef up their digital talent.

Even before the outbreak, Japan had been struggling with a shortage of information technology experts, partly due to low wages in the industry. COVID-19 has forced businesses to work harder on the problem.

"More companies will face a shortage of experts in cutting-edge technologies after the pandemic," said Yosuke Yasui, a senior economist at the Japan Research Institute. But there is a bright side: The digital transformation triggered by the pandemic is driving the development of such talent Yasui said.

NEC, for example, announced in July plans to increase the number of employees with advanced technology skills to 5,000 from around 3,000 at present as more clients seek strategic advice on digital technology in the wake of the pandemic. "We've received lots of inquiries for digital transformation consulting since the outbreak," NEC representative Ayako Takaki who is in charge of customer relations told the Nikkei Asian Review.

In June, NEC began offering courses aimed at honing employees' digital skills, working with Keio University in Tokyo to develop the curriculum. Around 100 employees will take the course each year.

Whereas before Japanese company focused on specialized training in technical areas such as artificial intelligence and digital security, the new course will teach design skills for the digital sector. Even sales representatives are expected be conversant about design in the digital sector, and be able to explain how the system works to customers.

Kenji Hirata, an NEC employee who took part in the program, said: "My understanding of AI and cutting edge technologies was insufficient to propose business solutions to our clients. The program helps me understand system design and how NEC's technology can be adapted to client's business in response to market needs."

In an effort to compete for top research and tech talent, NEC will offer qualified new hires a pay structure that it hopes better reflects the market value of their skills. The new compensation system will apply to employees hired starting next April.

However, "poaching tech talent from universities and other companies is not enough," NEC's Takaki told Nikkei. The company believes training its sales staff and engineers internally will be easier than waging a bidding war for outside tech talent.

Meanwhile, rival Fujitsu this fiscal year began offering around 9,000 free online courses to 80,000 employees in Japan to improve their grasp of AI and programming. The company plans to double its spending on training compared with the previous year.

The trend is not confined to traditional tech companies. In the steel industry, demand has plummeted due to the pandemic, forcing manufacturers to look for new efficiencies. Japan's JFE steel aims to train around 350 data scientists by the end of fiscal 2020 to reduce errors on its production lines.

In 2021, Mitsui Sumitomo Insurance will start selling data on car accidents and natural disasters to local governments. The company is retraining its sales representatives to handle data sales.

In collaboration with Toyo University and Kyoto University of Advanced Science, the insurer developed tuition-free three- to 10-day courses to help employees to learn how to gather data using drones and wearable terminals.

About 600 employees will have taken the course by the end of March 2021, Mitsui Sumitomo eventually plans for 5,500 salespeople to enroll in the program and will raise its training budget by 50% in fiscal 2021. Hitachi also began digital training for its 160,000 domestic employees in April.

According to a report by Japan's economy ministry, in 2018 nearly 90% of Japanese companies were facing a shortage of the IT workers needed to foster a digital transformation. While the development of digital technologies continues, and the coronavirus alters the way corporations function, a tighter labor market has made the shortage of tech talent even more acute.

"The hunt for people with tech skills is intensifying across the globe. We have to cultivate experts by ourselves, not just by poaching talented people from other companies," said Koichi Tsuji, a regional managing partner at accounting specialist EY Japan. The company's auditing unit, EY ShinNihon, plans to double the number of AI engineers and other digital experts on its payroll to 800 by fiscal 2022.

To attract new employees and sharpen the skills of those it already has, EY now offers an online MBA course in technologies such as blockchain and AI. The accountancy expects inquiries from clients for AI and blockchain to grow faster after the pandemic subsides.

Employees can take the MBA course, developed in collaboration with Hult International Business School, free of charge. One upside of the pandemic is that as many employees are forced to work from home, the time they save on daily commutes can be used to learn new skills, the EY representative said.

Other countries in Asia are also on the hunt for tech talent. Singapore's OCBC Bank in June announced plans to hire more than 3,000 people. In a statement, the bank said: "The [coronavirus] crisis has accelerated digitalization worldwide, and there has been a sharp increase in the number of OCBC customers accessing the various digital channels and solutions." The company plans to hire more tech specialists, as well as help current employees improve their digital savvy to meet that higher customer demand.

OCBC recently worked with Singapore's Ngee Ann Polytechnic to offer data analytics courses, with around 200 employees enrolled in the program as of August.

Rival DBS Group Holdings, also in August, collaborated with top cloud computing provider Amazon Web Services to help employees develop skills in AI and machine learning. The company says more than 3,000 employees, including senior executives, will have been trained in new technologies by the end of the year.

Tomohiro Maruyama, a senior manager at PwC Consulting, thinks more companies will adopt cutting-edge technologies. "Companies that are thriving in the pandemic will increase their digital investment even more, while virus-affected businesses will focus on revival for now, rather than using capital on new technologies," adding, "companies affected by the coronavirus are under pressure to move toward the 'new normal' and accelerate digitalization."

Additional repoting by Rei Nakafuji in Tokyo.

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