Asia promotes the openness and growth of the digital economy

Steady growth, high digital penetration

As Asia’s digital economy continues to grow, the role of AI in governance will become even more important. While a technological slowdown is taking place in the United States, where more than 91,000 jobs will be laid off in 2022, Asia looks unsettled. Southeast Asia’s leading digital economies could reach S$200 billion (US$149 billion) in 2022, up 20% from 2021, according to an October 2022 report by Google, Temasek and Bain & Company. Not short term. growth rate, the region’s digital economy is expected to reach S$300 billion (US$224 billion) by 2025.

According to Simon Chesterman, senior director of corporate governance, Asia’s ability to weather the digital recession that has plagued others lies in “huge changes on both the demand and supply sides”. AI is AI in Singapore. On the demand side, the combination of high internet usage, high penetration of digital devices such as smartphones and population-level comfort with technological innovation has seen many Asian people and businesses quickly embrace the digital economy, says Chesterman.

According to IMDA, 93% of businesses in Singapore have adopted some form of digital technology as of February 2023, an increase of 19 percentage points compared to 2018. This explains the main point of differentiation with some Western economies, says Chesterman. “When the economy is booming, people are willing to accept change because they can see the benefits,” he says. “The more comfortable you are, the more resistant you are to change.”

The urge to embrace digital technologies has grown with the global pandemic. According to VMware’s August 2022 report, three-quarters (76%) of people in Southeast Asia saw technology as an opportunity rather than an obstacle during the peak of Covid-19, four percentage points higher than the average and 77% say. digitization improves both their work and lifestyle.

Strong demand in the region has been accompanied by a steady stream of innovations from the region’s vast business network thanks to direct government support. For example, increased government funding in Hong Kong led to the creation of 3,755 startups in 2021, a 12% increase over the previous year, a record for the Special Administrative Region. The Singapore government has allocated S$25 billion (US$18 billion) for research, innovation and business from 2021 to 2025, and the growth of the digital economy has been identified as one of the key pillars of this initiative.

Creating a digital ecosystem

Meanwhile, Singapore’s IMDA, which bills itself as the “architect” of the island’s digital future, has launched a series of initiatives aimed at transforming the city-state into a global and regional technology hub. . It has made strategic investments in hard and soft infrastructure to accelerate digital economic growth in the country. Singapore achieved nationwide 5G coverage (more than 95%) three years ahead of schedule, and IMDA has launched digital services such as TradeTrust that facilitate the exchange of electronic documents.

IMDA will also play a key role in creating a strong digital talent pool and a progressive regulatory framework to foster innovation. It aims to stimulate the growth of the digital economy by increasing the reliability and trustworthiness of digital products and services. For example, in June 2022, it launched a $36.3 million digital trust center as part of the country’s research and development effort to build legitimacy for digital systems.

Good balance

According to Chesterman, government intervention often takes a two-pronged approach: “Government should regulate to prevent market failures, because it’s ineffective to wait for individual consumers to negotiate this themselves. The second reason governments regulate is that while it is not based on efficiency, we have certain values ​​and principles to uphold.