The Rise of Southeast Asia's Digital Economy — What's Needed to See Its Full Potential?
Fuelled by the pandemic, Southeast Asia's digital economy is expected to flourish, but what areas of improvement can help the region meet its digital potential?
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The pandemic caused a disruption in many areas — to the economy, supply chains and everyday life for millions of Southeast Asians. However, we can safely say that there was one silver lining: It was an incredible driving force for the digital economy.
As millions of people were forced to work, shop and live online to some extent, the region saw a surge in the popularity of online platforms and services, with Southeast Asia's digital economy expected to jump 28% to $222 billion this year.
And while consumers have been quick to embrace digital solutions, governments across Southeast Asia are also working hard to develop cutting-edge policies that will further fuel the growth of this burgeoning sector.
While that sounds overwhelmingly positive, other regions are working just as hard to develop their digital economies. I believe some areas of improvement deserve our dedicated attention if we are to meet our full digital potential.
Related: Why Southeast Asia Will See Stronger Growth in 2022
Improving our digital infrastructure
One of the key areas we need to focus on if we want to see Southeast Asia's digital economy reach its full potential is improving our digital infrastructure. This ensures that everyone in the region has access to high-quality internet.
Unfortunately, Southeast Asia still lags behind other regions in digital infrastructure. The latest statistics tell us that only three Southeast Asian countries (Singapore, Brunei and Malaysia) have over 80% of internet penetration, whereas the European Union (EU) as a whole has 91%.
Furthermore, most of Southeast Asia's average broadband speeds are only a fraction of what countries like South Korea, Japan and Singapore enjoy. This is a massive hindrance for businesses looking to move online or expand their digital operations.
To address this, we need to prioritize investment in our digital infrastructure and ensure that both consumers and businesses alike have access to the world-class connectivity they need to thrive.
New customer development
As the digital economy grows at an unprecedented rate, it's more important than ever for Southeast Asia to focus on improving customer development. This means encouraging businesses and consumers to embrace digital solutions and making it as easy as possible for them to do so.
There are a few ways that Southeast Asia can achieve this. One is by improving digital literacy levels across the region through initiatives, like providing free or discounted online courses, hosting digital literacy workshops and so on.
Another way to improve customer development is by simplifying the process of going digital for businesses. This means:
Streamlining the process of setting up an online presence, making it easier for businesses to accept digital payments
Providing them with the necessary support and resources to succeed in the digital economy
Related: 4 Things to Consider When Choosing the Best Asian Country for Business Expansion
Improving information security
Information security is critical for businesses looking to move online or expand their digital operations. Without proper protection, their confidential data can be compromised easily, leading to a loss of customers, revenue and reputational damage. No one wants to do business with a company that leaks their data.
There are a few steps businesses can take to improve their information security, such as:
Investing in data encryption
Implementing strong authentication protocols
Regularly backing up their data
However, perhaps the most important thing businesses can do is educate their employees on best practices for keeping information secure. This goes back to our previous point about encouraging digital literacy across the board.
In addition to improving information security for businesses, it is also important for Southeast Asian governments and regulators to provide guidance on cybersecurity best practices and create initiatives that incentivize businesses to prioritize data protection.
We can ensure that the digital economy in Southeast Asia flourishes without compromising the safety of our critical data by doing so.
Southeast Asian countries can utilize cross-country collaborations, like Go Digital ASEAN, to encourage growth in the digital economy, even in the most digitally impoverished regions. This is a great way for countries in the region to share knowledge and best practices, as well as identify and address common challenges.
One of the main benefits of cross-country collaborations is that they can help countries in the region better understand and address consumer needs. Engaging with different stakeholders and gathering feedback can help them develop digital solutions that meet real-world business needs, while also ensuring that these solutions are accessible to everyone.
At the same time, cross-country collaborations can help businesses tap into new growth opportunities by providing access to new markets and resources. They can also help businesses build networks and forge partnerships with key stakeholders, which, in turn, will allow them to grow their operations at a faster rate.
Ultimately, cross-country collaborations are essential for the continued growth of Southeast Asia's digital economy. Working together to leverage our strengths and address our shortcomings can ensure that our digital economy continues to thrive for years to come.
Related: The Future Value of ASEAN Nations for Entrepreneurs
None of the above solutions are easy. They will all require investment and collaboration on a scale never seen before in the region. However, if we can achieve them, the future of Southeast Asia's digital economy will be bright and will benefit every single citizen across the board. And that is something we should all be looking forward to.