Author: Cheng Wei Swee, AlphaBeta
Asia’s digital economy has grown significantly in recent years, driven by factors such as national digitalisation efforts and COVID-19-induced changes in the use of electronic platforms. The Malaysia Digital Economy Blueprint , for instance, aims to transform the country into a technology-driven nation by building digital infrastructure and driving electronic transformation in the public sector. To maximise growth, policymakers must establish a robust understanding of the economic benefits of digital transformation, what drives the gains, the potential challenges to growth and how they might be overcome.
Presently there are several knowledge gaps. First, various definitions associated with the digital economy exist, and some are relatively narrow with potential in order to underestimate the particular impacts of digital change. For example , some studies focus only on platform-enabled activities like super apps. Second, differences in evaluation methodologies make regional analysis difficult. Third, there is limited research upon the financial benefits associated with technologies applied to traditional sectors. Neglecting the impact of electronic technology on traditional sectors, such as health, overlooks its transformative effects beyond the technology sector. It is important to bridge these spaces in order to reveal the opportunities, risks plus solutions.
Leveraging digital technologies offers many opportunities. Eight key systems — mobile internet, financial technology, advanced robotics, additive manufacturing, cloud computing, big data, artificial intelligence and the internet-of-things (IoT) — and their related technology applications have transformative potential. Electronic e-commerce platforms, facilitated by mobile internet, for example, can unlock productivity gains of up to 15 per cent through reduced labour requirements, inventory efficiencies plus lower real estate costs.
Digital technology, it’s estimated, have the potential to create an annual economic value of US$628 billion in Japan , US$80 billion within Thailand and US$60 billion dollars in Pakistan by 2030. This is equivalent to about 13, 16 and 19 % of the countries’ current gross domestic product respectively.
Traditional sectors for example retail plus hospitality, health, agriculture and food account for most associated with these benefits. Countries are already realising that pursuing digital transformation will be imperative to manage challenges induced by the particular pandemic plus to ‘build back better’. Big data can help those tackling challenges in healthcare, social protection and education simply by supporting vaccine roll-outs, targeting vulnerable populations for interpersonal welfare plus identifying specific skills gaps. Other technologies can address sustainability difficulties such because biodiversity loss.
But there are significant barriers in order to realising the opportunities. Vietnam faces regulatory obstacles such as data localisation laws and limited electronic connectivity. In Singapore , while most businesses have internet access plus online presences, adoption rates for sophisticated technologies such as the particular IoT are low, especially for smaller enterprises.
A key regional barrier is the digital abilities gap. Two in three Asian workers are not confident that will they are usually gaining digital skills fast enough to meet future career needs and 93 per cent of workers and organisations face obstacles — this kind of as restricted awareness of training options as well as the lack of time — in order to digital skills training. As new roles emerge and skill requirements evolve rapidly, employees will need regular training to keep up along with job demands. There will be implications for work mobility if technologies create job losses, especially in case there are insufficient reskilling programmes to ensure that displaced workers can transition to other jobs.
While there is certainly tremendous potential for digital modification, the pandemic has also underscored the particular existing electronic divide between countries. Because high-income countries accelerated digital adoption, numerous low-income countries were left behind because they lack the necessary enablers like reliable plus affordable access to the internet. They will certainly not be able to access the benefits of technology since systems are increasingly dependent on internet connectivity. This may drive the inequitable distribution of benefits from the electronic economy and continue to disadvantage low-income nations.
Progress has been made to address these issues but greater partnership among stakeholders is critical to capture digital economy benefits. This is encouraging that governments in Asian countries have identified the digital economy as a key development area. Examples include Singapore’s Research, Innovation plus Enterprise 2025 Plan , Vietnam’s National E-commerce Development Program 2014–2020 and South Korea’s Digital New Deal . Such initiatives are making significant progress and the particular Global Innovation Index indicates that while North America and Europe always lead globally, Southeast Asia, East Asian countries and Oceania are the only regions closing the particular innovation gap.
The outbreak has also accelerated efforts in order to enhance access to mobile devices and the web, narrowing the digital divide. But there is scope to push further upon policy enablers and greater partnership among stakeholders. Take digital skilling — many of the best initiatives require the particular support associated with stakeholders, for example governments, employers, workers plus training institutions. For instance, to upskill talents, the Indonesian government could partner with industry leaders to develop skill frameworks that align with business preferences for specific electronic skills required in each sector. These frameworks could then be used to guide training attempts.
Addressing the particular limited awareness of coaching options, government authorities can develop skills portals to promote relevant courses and drive outreach to the masses, including out of place workers. Addressing the lack of period, training providers can work with industry to develop short-term micro-skills training courses. With this support, companies can leverage free teaching courses in order to upskill their workers. Finally, workers will require a mindset shift towards lifelong learning and must realise that upskilling does not always require formal degrees but can be undertaken via micro-skills courses.
The pandemic has amplified the importance of digital transformation within Asia in boosting long-term economic performance and resilience. Key stakeholders — such as governments plus businesses — need to understand the economic impacts of digital alteration across industries, identify existing gaps and risks plus collaborate on steps to reap its full potential advantages. If the electronic opportunity is usually captured, it presents the multibillion-dollar way forward with regard to Asia’s economic climate, a much-needed boost within the post-pandemic era.
Cheng Wei Swee is a Senior Manager at AlphaBeta.
This article appears in the most recent edition associated with East Asia Forum Quarterly , ‘ Asia’s Digital Future ’, Vol 14, No 2 .