By Citra Nasruddin, Programme Director for Tech For Good Institute

Artificial Intelligence (AI) is redefining Southeast Asia (SEA)’s development trajectory, reshaping industries, reimagining public service delivery, and reconfiguring the nature of work. From smart agriculture to ethical fintech, AI is unlocking new opportunities for productivity and equity. But it also brings new divides, new dependencies, and new dilemmas. If harnessed responsibly, AI can be the region’s launchpad to global competitiveness. If left unchecked, it risks reinforcing exclusion, inequality, and digital dependency. Now is the moment for SEA to act, through a whole-of-society approach that is inclusive, adaptive, and fit-for-purpose.

Productivity Gains with Purpose

AI is no longer confined to labs or large corporations. It is quietly revolutionising how societies function. In SEA, AI-powered platforms are transforming MSMEs by automating inventory, optimising deliveries, and enabling personalised customer engagement. In Indonesia, where MSMEs make up 99% of businesses, AI is helping traditional enterprises leapfrog into digital commerce.

Startups are deploying AI to optimise planting schedules and forecast crop yields—serving as a digital co-pilot for farmers. In financial services, AI and alternative data analytics are extending credit to unbanked populations. And in sustainability, AI-driven monitoring and predictive analytics are supporting climate goals. According to a recent research by TFGI, 69% of capital providers identify AI as a core enabler of digital sustainability.

This is a moment of potential abundance. AI is amplifying productivity and enabling more precise delivery of services. But tapping into this abundance demands clear-eyed navigation of the roadblocks ahead.

Rethinking Jobs and Skills in an AI-Driven Economy

Despite the buzz, AI adoption remains highly uneven. Many MSMEs still lack the digital literacy or resources to implement AI tools. Government support programs are often underutilised due to limited awareness or perceived complexity.

SEA also faces a shortage of digital professionals. Thailand needs over 80,000 AI workers. Malaysia must reskill 600,000 employees in five years. Yet few graduates specialise in ICT, and fewer gain industry-ready experience. In Thailand, just 16% of households have a computer, and women account for only 30% of Gen AI (GAI) related course enrollments.

Education systems are still catching up. Most curricula emphasise theory over the task-based skills needed in AI-powered workplaces. But not all roles are equally impacted. LinkedIn categorises jobs as augmented (GAI enhances), disrupted (GAI alters or replaces), and insulated (GAI has minimal effect). This view shows that AI isn’t only a threat, it also enriches jobs and creates new forms of value.

Workforce strategies must be task-responsive, not assumption-driven. Reskilling and upskilling workers, even those in their 60s, can boost productivity. But scaling this requires deep reform in both formal education and a lifelong learning mindset.

Governing AI Risks Before They Scale

AI’s rapid diffusion introduces real risks. Bias, scams, and misinformation already threaten public trust. Automation may displace workers in retail, logistics, and finance, roles often held by women and low-wage earners. Meanwhile, training programs may be too generic to meet evolving industry needs. It’s not just low-skilled workers at risk, those in mid-skilled roles are also increasingly vulnerable.

Infrastructure is another challenge. Modern AI systems require vast computing power and robust digital infrastructure. Many countries lack the data centers or cloud architecture needed for high-performance applications, raising concerns over both capability and digital sovereignty.

Policy divergence adds complexity. Some countries move toward binding regulations; others prefer flexible frameworks. This inconsistency can hinder cross-border innovation in potential areas such as trade, finance, and health.

Turning Possibility into Progress

Converting disruption into opportunity requires a hybrid strategy, consisting of regional collaboration and national customisation. ASEAN’s AI governance guides, data-sharing pilots, and sandbox corridors offer a starting point. But frameworks must be matched with investment in talent, infrastructure, and civic inclusion.

Education needs a redesign. Task-based, AI-literate curricula should be introduced through universities, public training, and informal networks. Tools like Indonesia’s G20 Digital Skills Measurement Toolkit provide a pivotal milestone toward closing existing skills gaps to close skills gaps.

Institutions must prioritise inclusion. Digital equity means not just access, but the capacity to use tools effectively. That includes addressing gender gaps, embedding ethics into training, and empowering citizens to shape AI’s role in their lives.

MSMEs need better entry points. Programs like “CTO-as-a-Service,” AI advisory clinics, and tailored financing can build confidence in adoption. Community organisations can also play a vital role in bridging the gap between policy and practice.

SEA also needs to make bold investments in AI infrastructure. Sovereign data centers, cloud architecture, and future-ready computing power are essential, not optional. National AI strategies must rest on a strong technological foundation.

And regional coordination must deepen. Security, ethics, and governance are transnational issues. Shared standards, joint research, and pooled risk frameworks can amplify  the region’s voice in global AI discussions.

Foundations and Future-Readiness for a Confident Digital Society

AI’s promise also carries a paradox. Its power to solve problems can just as easily reinforce them—depending on its deployment and who it serves. The TFGI’s framework helps navigate this tension by focusing on two pillars: foundations and future-readiness.

Foundations ensure today’s digital infrastructure and participation are inclusive. Reliable, affordable connectivity and meaningful use are essential to prevent AI from reinforcing existing divides.

Future-readiness is about preparing society to shape what comes next. It emphasises digital skills, innovation, resilience to disruption, and governance that keeps pace with change.

Together, these pillars provide indicators, like platform use and AI literacy to guide action and track progress. The framework reminds us that a confident digital society is not built on technology alone, but on the readiness of its people, systems, and institutions to shape AI for good.

A Future Worth Designing Together

AI is not our destiny; it is a choice shaped by design and decision. By steering it toward the public good, through ethical governance, inclusive innovation, and sustainable practices, SEA can build a digital future that uplifts all. In this pivotal moment, the region must lead with courage and clarity of purpose. A confident digital society is not merely one that adopts AI, but one that actively shapes it for good.

About the Writer

Citra Nasruddin is Programme Director at the Tech For Good Institute, where she leads research on the responsible and inclusive development of digital economies in Southeast Asia. She is an expert in fiscal policy, financial services, and digital innovation. Prior to joining the Institute, she worked in Indonesia’s public sector, supporting cross-sectoral initiatives with government agencies, international organisations, and the private sector.

The views and recommendations expressed in this article published on [month / year] are solely of the author/s and do not necessarily reflect the views and position of the Tech for Good Institute.