Articles

Unlocking the Digital Potential of ASEAN’s Small Businesses

The rapid development of Southeast Asia’s digital economy is affecting MSMEs. This article highlights their efforts to adapt to technological advancements and explains how innovative, community-focused digital skills training programmes—such as Go Digital ASEAN—are helping them to realise their full potential. These initiatives promote financial inclusion, strengthen resilience, and drive innovation across the region.

By Hannah Najar and Anne Cortez, TFGI Insights Contributors

Across Southeast Asia, small businesses are embracing the digital revolution with remarkable determination, striving to remain competitive in a rapidly evolving digital economy. From bustling cities to remote villages, entrepreneurs are leveraging digital tools to overcome challenges and unlock new opportunities for growth. Their journeys exemplify innovation and resilience, reshaping the region’s economic landscape.

Launched in 2020, the Go Digital ASEAN (GDA) initiative was designed to broaden participation in digital skills training across Southeast Asia. It provides digital and business training to micro, small and medium enterprises (MSMEs), empowering them to navigate the digital landscape with confidence. Endorsed by the ASEAN Coordinating Committee on MSMEs, GDA is implemented by The Asia Foundation, with funding from Google.org—Google’s philanthropic arm.

The stories of Sawitree Srijinda from Thailand, Dr Chan Pick Kuen from Malaysia, and Luu Kim Hoa from Vietnam illustrate the transformative impact of GDA.

MSMEs in Southeast Asia represent a substantial economic force

However, these businesses often face obstacles such as limited access to financing, a shortage of qualified employees, and technological constraints. Nevertheless, success stories demonstrate the significant opportunities that MSMEs hold. Reports from the Asian Development Bank (ADB) and the Economic Research Institute for ASEAN and East Asia (ERIA) emphasise the need for harmonised policies and capacity-building initiatives to address these challenges—particularly for women and rural communities.

Since its inception, GDA has trained over 400,000 individuals—60% of whom are women—across its two phases. Impact research by The Asia Foundation reveals that participants have improved their digital literacy, financial acumen, and resilience against cyber threats, enabling them to unlock their digital potential.

ASEAN’s Small Businesses Go Digital

Sawitree’s success in selling roses online and leveraging digital payments exemplifies the tangible benefits of GDA training. Similarly, Dr Chan’s innovative approach to product development and market expansion underscores the importance of digital skills in driving business growth. Hoa’s ability to safeguard her business against cyber fraud while reaching more customers demonstrates the critical role of cybersecurity in digital adoption.

These stories are part of the 215,896 MSMEs trained during GDA’s second phase, showcasing how targeted skills training can help small businesses overcome traditional market challenges and achieve meaningful growth.

Small Businesses’ Digital Priorities

GDA has laid a strong foundation for MSMEs to thrive in the digital economy. Insights from The Asia Foundation, the ADB, and ERIA highlight several key trends and priorities for small businesses:

Online safety: Cybersecurity skills are essential for businesses adopting digital tools.
AI-powered tools: MSMEs are beginning to integrate AI into their strategies, focusing on efficiency and scalability.
Quick financial returns: Digital tools that offer immediate impact—such as online storefronts and automated inventory management—are highly valued.

To sustain this progress, governments and the public sector must take targeted, inclusive action.

Recommendations

The following recommendations highlight practical ways to expand digital participation, close capability gaps, and build stronger support systems for small businesses across the region:

Champion locally led digital skilling
Promote practical, locally tailored training programmes—such as GDA—to expand MSMEs’ access to mentorship, funding, and capacity building, thereby boosting their participation in e-commerce and digital trade.
Strengthen data and accountability mechanisms
Establish KPIs and enhance data collection to monitor digital inclusion progress and identify participation gaps, enabling more targeted and responsive policymaking.
Boost collaboration and supportive ecosystems
Foster partnerships among governments, the private sector, and incubators to fund innovation, improve regulatory frameworks, and scale support for MSMEs in early-stage digital economies.

By championing these efforts, Southeast Asia can build resilient MSMEs and drive sustainable growth across the region.

About the Writers

Hannah Najar is the regional program manager for Go Digital ASEAN, based in The Asia Foundation’s Malaysia office. She leads the implementation of the program across ASEAN member states.

Anne Cortez is a communications consultant for Go Digital ASEAN and The Asia Foundation’s digital skilling portfolio under the Future Skills Alliance, a collective impact platform for private and public sector partners to deliver future skills at scale to the region’s underserved groups.

About Go Digital ASEAN

The Go Digital ASEAN initiative broadens digital skills participation across the region, reaching individuals and communities with the most to gain from digital literacy. Endorsed by the ASEAN Coordinating Committee on Micro, Small, and Medium Enterprises (ACCMSME), the program is implemented by The Asia Foundation with funding from Google.org, Google’s philanthropic arm. Learn more here.

About The Asia Foundation

The Asia Foundation is an international nonprofit organization working to solve the toughest social and economic challenges in Asia and the Pacific. Informed by more than 70 years of experience and deep local knowledge, we work with partners across more than 20 countries through 17 offices to improve lives and expand opportunities. 