The Association of Southeast Asian Nations (ASEAN) member countries could miss out on major opportunities in the emerging digital economy if they don’t harmonize regulations and liberalize the IT sector, warn IT leaders.
“What is happening is that the uptake of digital services is going so fast and is bringing down borders between these different nations,” said Sigve Brekke, president and CEO of Norway’s Telenor Group, which has a mobile operator’s license in Myanmar. “But I don’t see ASEAN countries taking part in this. I am afraid that ASEAN is losing out. There are too many big words about digital opportunities, but I don’t see the action.”
In addition to coordinating policy frameworks, the region needs to foster start-ups and create products to meet the demand for digital services, continued Brekke, who spoke at the recent 25th World Economic Forum on ASEAN. Local content could include information for farmers, which would allow them to cut out middlemen, and for use in education. Cashless payment systems should also be made possible.
Brekke’s message to policymakers: “The revolution is coming extremely fast. There are great opportunities for ASEAN companies to take charge of the future. Get your act together—the sooner the better.”
There are indications that ASEAN countries are waking up to the opportunities of the digital economy and the priorities for achieving it. “For many years, South-East Asia has had an insecurity complex relative to China and India,” said Nick Nash, group president of Garena in Singapore. “But we are beginning to see home-grown companies. On the one hand, I appreciate the need for the proverbial kick in the pants, but there are rays of light.” He added: “There really is strong potential here if we build it the right way.”
Nash noted that countries in the region, notably Singapore and Thailand, have bolstered their educational institutions. “We are improving from a human capital standpoint. That is a strong check mark.” In addition, some countries have been implementing pro-growth IT policies. Vietnam has kept IT costs low, significantly boosting the proliferation of smartphones—an example of “how a lower-income country can get this policy right.” According to Nash, another challenge ASEAN economies need to address is the liberalization of foreign ownership limits.
“No matter how you define the digital economy, government and policy play an important role” in making it happen, Yasmin Mahmood, CEO of the Malaysia Digital Economy Corporation, noted.
Government policy has to focus on schools and invest in education to turn young digital natives into digital producers, Yasmin stressed.
Inclusion is important. But this does not just involve access to the internet; it also entails delivering faster transmission speeds. According to Emirsyah Satar, chairman of the Indonesian e-commerce group Matahari Mall, a user in Papua New Guinea downloads files 25 times more slowly than someone in Jakarta. “That is the challenge for the government.”
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