23 February 2016 – The growth of the Digital Economy could add US$1 trillion to the GDP of the Association of Southeast Nations (ASEAN) bloc over the next 10 years, according to a report released by global management consulting firm A.T. Kearney in conjunction with Axiata Group Berhad (Axiata), one of the largest Asian telecommunication companies, at the GSMA’s 2016 Mobile World Congress.
The report, titled ASEAN Digital Revolution, focuses on the growth opportunities, the hurdles that need to be overcome and policy initiatives that will help the sector fulfil its growth potential and contribute to the bloc’s overall economic expansion. The report highlights the following factors that could see ASEAN become one of the world’s top-five digital economies by 2025:
- A robust economy with a combined GDP of US$2.5 trillion growing at 6% per annum
- A literate population of more than 600 million, of which 50% are below 30 years of age
- A well-developed ICT cluster with a track record of innovation and investment into new technology
When it comes to market size and growth opportunities, there are few economic regions that can match ASEAN’s potential, especially when it comes to the digital economy. More than half of the bloc’s population is aged 30 or below. This is the consumer group which is most likely to contribute to digital economy as they are most tech savvy.[adrotate banner=”4″]The confluence of technology innovation, a youthful population and robust economies can help ASEAN leapfrog into the vanguard of the digital economy.
Through accelerated innovation, mobile network operators are ready to support and grow the ASEAN digital economies of cashless societies, smart cities, borderless digital services and financial inclusion. However, for mass adoption of the services to drive digital economies, policies and a strong digital agenda is required in the region with visionary government and industry collaboration.
The report adds that the impending implementation of the ASEAN Economic Community (AEC), which promises to promote free movement of goods, services, investment, skilled labor and freer flow of capital, is also likely to provide a big boost to the sector.
However, it highlights issues that need to be addressed, and policy initiatives that need to be implemented, for the region to meet the growth potential. These include:
- Developing a comprehensive digital strategy, not just at the country level but one for the entire region
- Improving broadband and Internet access by releasing an additional 20MHz of spectrum per operator, per country
- Ensuring there are no more than four telecoms operators per market
- A comprehensive overhaul of in-country and cross-border regulations to ensure policies help boost growth of domestic firms
- Accelerating innovation in mobile financial services like allowing creation of digital-only banks
- Creating a single digital payment platform first in-country and then across ASEAN
- Creating 35 ‘smart’ cities that harness the power of technology to empower businesses and consumers
- Creating a national ID in each country for delivery of public services linked to the mobile phone and ensuring its interoperability across ASEAN
- Enhancing trust and security in ASEAN’s digital economy by harmonizing cybersecurity, data security and privacy laws across the region
- Fostering a culture of digital innovation by revamping the K-12 and higher education system