51 per cent of firms in India that participated in a recent survey agreed that sustainability is a critical differentiator. Only 19 per cent of organisations in the country say they are fit for the future.
Last week, Vodafone Business released a report which shows that sustainability is viewed as a competitive advantage for high-performing companies. The Vodafone Business Fit for the Future global research project, first performed in 2019, is an annual report conducted in partnership with B2B International.
It explores international business leaders' attitudes and actions on sustainability, innovation, and resilience. This year's survey covered 3,101 firms across 15 countries, including 748 in the Asia-Pacific (APAC) region. Firms deemed "Fit for the Future" score highest on measures such as speed-to-market, embrace of change, detailed strategic planning and openness to new technologies.
Besides India, other APAC countries in the survey include China, Australia and Singapore.
The Vodafone Business report define Fit for the Future (FFTF) businesses as those that understand the power of technology to solve their business challenges and have technology roadmaps in place to transform their working methods. Their strategies are specific, documented, adequately funded, and well-measured. They understand the forces shaping their businesses and seek help from crucial thought leaders when needed. And they're adaptable, seeing change as an opportunity and reacting quickly to new trends to get to market faster than other companies.
Making the effort to embrace and execute FFTF strategies has benefited these firms as they have reported superior financial performance. Almost 70 per cent of FFTF firms have higher profits now than they did a year ago compared with 46 per cent of non-FFTF firms. And 81 per cent of FFTF firms forecast higher earnings over the next five years, compared with 62 per cent for non-FFTF firms.
Despite FFTF firms being in the global minority, companies in the APAC countries generally led their European counterparts in the survey. 33 per cent of the firms surveyed in Singapore earned the FFTF designation, as did 24 per cent in China, 22 per cent in Australia and 19 per cent in India.
Only 18 per cent of firms report themselves as FFTF in Germany, 14 per cent in the U.K., and 13 per cent in the Netherlands. Spain (24 per cent) and Italy (23 per cent) improved their rankings. Since 2019, the proportion of FFTF businesses decline slightly in China and Australia while remaining broadly stable in India. Singapore is ahead of the U.S. where 27 per cent of firms say they are FFTF.
Fit for the Future enterprises, especially the larger ones, understand the return on investment from focused tech spending. Their senior managers and executives encourage innovation throughout the ranks. In this year's survey, FFTF businesses said they were far more likely than their peers worldwide (86 per cent vs. 67 per cent) to have a structured approach to innovation and simultaneously recognise that everyone has a part to play.
Top on the minds of these companies in supporting their innovation investment plans are cybersecurity (27 per cent), Internet of Things (IoT, 26 per cent), Cloud (23 per cent), Mobile (20 per cent) and Business Intelligence (19 per cent). FFTF firms see these technologies as having the most direct impact on their sustainable growth.
In the APAC region, up to 69 per cent of businesses are looking to IoT (sensors, monitors, drones) to optimise their supply chains and improve quality control, as well as to understand where they can save on energy costs and fleet maintenance. IoT was, in fact, the most important tech priority for firms in China and the largest businesses in this year's survey, but it was also in the top five for small and medium-sized businesses.
Companies across the APAC region agree that cyber defence is an investment priority, especially with increased tech adoption. Half (51 per cent) of businesses see cyber threats growing somewhat or significantly, especially in the government, professional services, and healthcare sectors.
Although 70 per cent of all APAC businesses see sustainability as important, less than half say they are committed towards net zero, and only 24 per cent of them say they have a well-developed plan to tackle climate change.
However, Fit for the Future firms are different. These high performing firms place emphasis on their sustainability programmes and view it as a competitive advantage. This philosophy is embraced most in APAC, where firms recognise that sustainability is a critical differentiator: 56 per cent agreed it was in China, 51 per cent in India, 42 per cent in Australia and 32 per cent in Singapore. These numbers were far higher than the share of companies saying yes in the U.S. and Europe, the Middle East and Africa.
While sustainability is a significant concern, there's a sense that progress could be stalling. Most businesses remain focused on bread-and-butter issues such as fulfilling customer expectations for faster service and higher quality. Furthermore, only a third (34 per cent) say customers are willing to pay more for environmentally sustainable products and services. This means that customers expect companies to adopt sustainable practices, without translating into higher costs for them.
This may explain why the number of businesses making decarbonisation a critical goal has remained flat globally since 2019, while the number of companies globally that consider sustainability an absolute necessity for survival (21 per cent) is the same as last year.
Despite the lack of clear action from APAC businesses on sustainability, those already implementing sustainability practices into their business planning are realising significant business benefits from doing so. The study found 74 per cent of businesses reporting higher profits this year have a formal ESG program in place. Among firms that reported lower profits fewer than half (47 per cent) said they have such programs in place.
Many APAC companies continue looking outside themselves, and especially to the government, to solve environmental sustainability challenges. However, FFTF firms in APAC are acting on their own, and this is broadly driven by customer demands. 69 per cent of APAC FFTF firms say their customers demand environmental sustainability compare with 55 per cent for non-FFTF APAC firms. They are being rewarded by their customers and investors. FFTF firms are not waiting for others to invent the future, perhaps because they also have a clear-eyed view of their impact, especially in China and India.
"While there is recognition across APAC on the importance of environmental sustainability, there is a clear opportunity for businesses to take more concrete actions, particularly driven by customers and investor demand. Technology plays a key role in helping businesses overcome the barriers and move towards sustainability goals, with over 70 per cent of businesses in APAC agreeing that technology breakthroughs are needed to enable progress," said Bhupinder Singh, President, Asia Pacific & Middle East, at Vodafone Business. (ANI)