How South East Asia countries Can Build a Stronger Digital Economy

Since the introduction of the internet, eCommerce has been a significant determinant of a business’s success in international markets. Small businesses in countries with strong internet connections and availability of digital payment methods can easily penetrate foreign markets in both sourcing and selling. For example, there is a prediction for the Indonesia economy growth to beat all others in South East Asia due to the high number of youthful internet users.

Most of the Asian economies, especially in South East Asia, have experienced rapid growth in internet use but have not yet embraced eCommerce as it is in the larger economies. The main challenge is that strong internet connections are mainly available in big cities, hence, leaving small businesses in rural areas with no means to access outside markets through technology. So what can the South East Asian governments do to overcome the barriers to the expansion of their digital economies? Below are some suggestions.

Improve Connectivity

Despite the rapid growth in internet connections in South East Asia, a majority of the population is still yet to access affordable and stable internet connection. The average number of people with strong internet connections in the larger economies in the region like the Indonesia economy and Thailand economy is one out of five, and the number drops to 1 out five in the lower-income economies like Vietnam economy and Philippines economy. South-East Asia economies can improve the eCommerce capability of their SMEs through policies that encourage more investment by telecom companies. In some economies, the broadband market is dominated by a few mostly state-owned telecommunication firms. The lack of competition leads to a monopolisation of the industry and less innovations.

Improving Citizen’s Digital Skills

Literacy levels in the region are satisfactory, but governments should introduce ways to promote digital skills through the education system. The digital skills can start with basic computer knowledge at an early age to boost the population’s interest in the topic. Most of the skills required for the growth are not necessarily academic, but self-acquired skills for life. Resources should be made available for individuals willing to learn eCommerce related topics through government collaboration with the private sector.

Expanding the Use of Digital Payments

Digital payments are a necessity in building a digital economy. Most people in the developing Asian economies rely on cash transactions, especially in rural areas where the population mainly consist of the elderly. Governments in such countries can improve the acceptance of online payments by introducing digital payment means for government services and through a strong regulatory infrastructure that will promote the public’s confidence in the online payment methods.

Introduction Policies that Promote Public Trust in the Digital Economy

People will only embrace the digital economy through the elimination of any fears related to data privacy and cybersecurity. Most Asian economies don’t have regional coordination of data protection policies, hence, making it hard for businesses across borders to trust each other. Governments in developing Asia can assure the security of consumers and sellers in the digital space through the introduction of comprehensive data protection laws and strong data protection authorities.

Leading by Example

Governments in the developing Asian economies should also embrace digital systems to encourage digitisation the same in the private sector. Governments can offer services such as the issuance of business permits and licensing through digital platforms and promote digital payments as a way of demonstrating its benefits to the public.

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