Launched at the Asia Tech x Singapore (ATxSG) summit, our partners at the Singapore Institute of International Affairs (SIIA) published a special report, “Charting ASEAN’s Digital Future: Emerging Policy Challenges”. The report offered research and analysis on ASEAN’s digital transformation through a lens of economic recovery, geopolitics, ASEAN integration, and sustainability.
It identified emerging trends in ASEAN’s digital economy, such as the growth of e-commerce and delivery services, the rise of digital payments, growth in data centres, and the resulting social and sustainability concerns arising from the digital economy’s fast growing carbon footprint.
As the Tech For Good Institute’s Platform Economy report shows, MSMEs and consumers have widely embraced the digital economy, and this has reaped great benefits for both sides. Our study found that over 82% of consumers felt that platforms improved convenience, comparison, and options. Simultaneously, over 84% of retail and food MSMEs found themselves able to reach more consumers with the proliferation of digital platform use.
However, the SIIA’s report flagged major systemic concerns that, left unaddressed, are likely to hinder this digital growth. These challenges include:
- Gaps in existing rules for trade and investment, along with lagging regulatory cooperation and coordination about data policies and data management, diminishing the region’s attractiveness as a market.
- Inconsistent physical infrastructure between rural and urban areas, thereby limiting digital inclusion for less developed regions and potentially creating a digital divide.
- The potential for splintered digital systems that lack interoperability and common standards, limiting efficiency and impeding sustained growth. Geopolitical tensions — especially Sino-American competition — have begun to encroach into the digital space, leading to the limiting of supply chains, protectionist tendencies, and the race to form digital trade rules to maintain exclusive spheres of influence. This may force ASEAN to incur unnecessary costs at a time when it should be focusing more on infrastructural development.
- Questions about sustainability, with new rules needed to ensure that the environmental impact of the digitisation process is mitigated, that growth remains inclusive and does not exacerbate inequality.
The report suggests that ASEAN governments must work together and harmonise on a regional level, creating clarity, common standards, and provide platforms for dialogue between the private sector and ASEAN regulations. Crucially, it also underscores the need to recognise the cross-cutting nexus between digitalisation and sustainability — the sustainability aspect of digital growth cannot be ignored, especially given the fact that technology can help provide the solutions needed to tackle the environmental challenges.
The Tech For Good Institute concurs with SIIA’s findings, and recently also examined the role private stakeholders can play in helping MSMEs pivot towards more sustainable models. Whilst the platform companies in the region do not directly control their value chains end-to-end, they enjoy uniquely influential relationships and access with both consumers and MSMEs. This confers upon them the responsibility to educate and incentivise their partners towards transiting to a greener way of doing things. Innovative tech startups close to the ground are also playing an increasingly large role in helping MSMEs transit to a greener way of doing business, providing tech-driven solutions to everyday challenges.
Ultimately, a multi-stakeholder sustainability strategy is key. Governments and private businesses must support and collaborate with each other, building capacity and sharing expertise.
At the Tech For Good Institute, we welcome the opportunity to work together with partners and all stakeholders, so that Southeast Asia may realise the full potential of this digital age.
Read the full report here: