In ASEAN, the digital economy is rapidly growing due to the continued rise of digitalization. It has provided several benefits, such as creating new jobs and transforming traditional industries.
The digital age has also fundamentally changed how business is done, wherein ASEAN's digital economy continues to establish itself as a primary market worldwide. Interested parties should become familiar with the region's digital economic landscape to capitalize.
Building the ASEAN Digital Economy
First and foremost, the growth of the digital economy can be attributed to formal institutions and bodies that help align the region's digital development. These parties' significance includes creating centralized frameworks and initiatives that foster Southeast Asia's digital economy.
Within this, ASEAN's digital sector, previously known as the ASEAN Information and Communications Technology (ICT) sector, helped set the foundation of the digital economy in the region, incredibly when Southeast Asia was severely underdeveloped in terms of digital capability. Now known as the ASEAN Digital sector, it functions as the region's leading proponent in overseeing digital data policy and regulation, cybersecurity, online platform, content regulation, and other policy areas to establish and preserve an innovative, safe, sustainable, and inclusive digital ecosystem.
Another critical area for consideration in determining the growth of ASEAN's digital economy is the transformation of its industries. For instance, the digital transformation of finance and the emergence of the financial technology sector has helped stimulate the digital growth of economies in Southeast Asia. For example, ASEAN e-payments were successfully established in March 2019 to support creating a unified and regulated digital payment system across the region, which sought to support important transactions like cross-border e-commerce. Moreover, private sector fintech players also continue to propel further economic growth, as their businesses help facilitate the entry of new investors from domestic and foreign sources.
In 2023 and the coming years, potential investors and new market entrants should continue to consider the role of both the private and public sectors, as their collaboration will undoubtedly play a significant role in continuing the development of ASEAN's digital economy.
How the Digital Economy is Providing Opportunities
Per 2022 data from the Asia Development Bank, the digital economy accounts for only 7% of ASEAN's GDP, comparable to 16% in the People's Republic of China, 27% in the European Union-5 (France, Germany, Italy, Spain, and the United Kingdom), and 35% in the United States. The same report asserts that ASEAN could emerge as one of the world's leading five digital economies by 2025. This suggests that the following years will be a significant period for ASEAN as its governments attempt to realize its immense economic potential.
Sectors closely related to the success of the digital economy have also provided several livelihood opportunities for citizens in the region. Approximately 100,000 qualified experts and four million "partners," or workers on flexible schedules, have been hired in various sectors to carry out duties like food delivery, e-commerce operations, and customer transportation– all of which have emerged due to digital transformation.
It is also essential to consider the digital economy's impact on several levels of society, be it for businesses and entrepreneurs or consumers.
Through digital technologies and the internet, the digital economy has given private sector business owners and independent players new ways to connect with clients, broaden their markets, and enhance their operations, improving their ability to compete, boost their earnings, and generate additional jobs.
Meanwhile, for consumers, the digital economy in ASEAN offers more options, convenience, and better access to goods and services through e-commerce and online marketplaces. Additionally, giving consumers access to information and technological tools enables them to make better-informed purchases.
Overall, the emergence of the digital economy in ASEAN offers substantial chances for the region's citizens to experience economic expansion, innovation, and enhanced quality of life.
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