Digital Economy in Asean will keep growing

By: Ardi Wirdana

The Digital Economy among the Association of Southeast Nations (ASEAN) will keep growing, according to a consulting firm A.T. Kearney in conjunction with Axiata Group Berhad (Axiata), one of the largest Asian telecommunication companies, at the GSMA’s 2016 Mobile World Congress.

The firm says the growth opportunities, the hurdles that need to be overcome and policy initiatives that will help the sector fulfil its growth potential and contribute to the bloc’s overall economic expansion.

According to the firm, it predicts that ASEAN could become one of the world’s top-five digital economies by 2025. There are a number of different factors to this such as the robust economy of Asean countries which is still growing. Another factor is the many literate population that the region holds. Asean countries also have a good track record when it comes to ICT innovation.

“When it comes to market size and growth opportunities, there are few economic regions that can match ASEAN’s potential, especially when it comes to the digital economy. More than half of the bloc’s population is aged 30 or below. This is the consumer group which is most likely to contribute to digital economy as they are most tech savvy,” says Naveen Menon, Partner and Asia-Pacific Head of Communications, Media & Technology Practice at A.T. Kearney and one of the authors of the report.

“The confluence of technology innovation, a youthful population and robust economies can help ASEAN leapfrog into the vanguard of the digital economy” he added.

Jamaludin Ibrahim, President and Group Chief Executive Officer of Axiata said, “Through accelerated innovation, mobile network operators are ready to support and grow the ASEAN digital economies of cashless societies, smart cities, borderless digital services and financial inclusion.

However, for mass adoption of the services to drive digital economies, policies and a strong digital agenda is required in the region with visionary government and industry collaboration. It is our hope, therefore, to see operators and governments quickly come together to accelerate this development. I believe a ‘revolution’ is required!”

The report adds that the impending implementation of the ASEAN Economic Community (AEC), which promises to promote free movement of goods, services, investment, skilled labor and freer flow of capital, is also likely to provide a big boost to the sector.

However, it highlights issues that need to be addressed, and policy initiatives that need to be implemented, for the region to meet the growth potential. The biggest homework for the region is to develop a comprehensive digital strategy. This must be done with a high level of coordination between the countries of Asean. The strategy should not only develop each country, but should be one that covers the entire region.

The region also needs to improve its broadband and internet services. This would mean massive infrastructure work especially for countries in the region that still have problems with internet access like Myanmar and Cambodia.

There also needs to be a comprehensive overhaul of cross border regulations. This needs to be done by regional policy makers to help domestic companies prosper in the region and also make an impact globally.

It is also important that the countries in the region create a single digital payment platform. This needs to first be done in each countries before implementing it across Asean. To help this, the region needs to accelerate innovation in mobile financial services. One way of enhancing mobile innovation is by allowing the creation of digital only banks.

The establishment of smart cities will also be important, but needs to be done in a way so that they all target the same objectives. These smart cities should harness the power of technology and empower businesses and consumers.