Today, we face one of the greatest challenges of our generation. In just a short span of time, the coronavirus pandemic has upended lives and livelihoods around the world, exacerbating longstanding socioeconomic inequalities and plunging global financial markets into a deep recession. As the virus gradually made its way throughout Southeast Asia earlier this year, border controls further debilitated economies around the region, many of which were reliant on both regional and international tourism as a main driver of economic growth. Yet, despite the heavy toll of the coronavirus pandemic on the ASEAN-5 economy, several jurisdictions have emerged more resilient than ever.
This is, of course, not a new phenomenon. In many ways, history is repeating itself and we need to look no further than the 2003 SARS epidemic which was arguably responsible for accelerating major tech developments across China’s e-commerce and digital payments ecosystem. Holed up in their homes, Chinese consumers were forced to turn to previously untrusted e-commerce sites and virus-proof contactless payment options in the place of brick and mortar storefronts and cash. Despite being a cash-based economy only two decades ago, as of 2018, 83 percent of all payments in the country were now being done via mobile applications.
We can begin to see similar early stirrings of shifts in consumer habits and preferences across ASEAN nations, often most pronounced in early adopter markets whose lawmakers recognised the need for digital agility. Though disparate across developing and developed markets, this approach has informed a “smarter” model of policy-making and the fruits of this have been no more pronounced than during the COVID-19 crisis. When coupled with government aid initiatives and a collectivist culture across the region, Southeast Asia is primed to further its economic growth and chart its technological development towards a more inclusive and resilient digital economy.
Laying the digital groundwork
Thanks to its increased mobile connectivity and growing online population, Southeast Asia has one of the largest and fastest growing internet markets in the world. However, a resilient digital economy does not stem from digital readiness alone. This is instead a matter of smart regulation, anchored by the pillars of data-driven decision making, progressive policy-making, and an inclusive digital literacy model.
Arguably, the best example of this across the region can be found in Singapore’s Smart Nation plan. Launched in 2014, this ingrained tech-forward mindset informed the government’s strategies as the nation progressively built up critical digital infrastructure and promoted the adoption of smart technologies. Thanks to its extensive digital transformation work over the past 6 years, Singapore’s early response to COVID-19—which included chatbots and a national WhatsApp channel to educate and inform citizens—earned praise from the World Health Organisation.
To that end, Brunei unveiled its first five-year Digital Economy 2025 Masterplan, which aims to turn the country into a digital and future-ready Smart Nation. This included the creation of eKadaiBrunei, a national e-commerce platform aimed at providing a safe and convenient way for local businesses to continue connecting with customers during the pandemic. Brunei’s masterplan exemplifies the key role that such a digital roadmap can play in leading a local economy to a more sustainable future, coupling digital transformation initiatives with institutional backing to boost long-term resilience.
Shaping the path to recovery
Digital transformation, of course, is a long-term endeavour and while progressive policies can help to encourage the adoption of novel infrastructures and tools, it’s crucial that a workforce itself is equipped with the necessary skills to ensure wide scale digital literacy—one that doesn’t discriminate based on age, class, or sector.
Though commonly thought to be far more digitally savvy than older generations, youths themselves have voiced concerns that they aren’t sufficiently equipped with the right skills to tackle technological disruption. Last year, the World Economic Forum’s ASEAN Youth Technology, Skills and the Future of Work report found that three of the four skills that ASEAN youth regard as their weakest are STEM skills, including technology design and data analytics. Higher education institutions need to ensure their course offerings reflect the realities of the digital economy, covering topics such as entrepreneurial innovation, emerging technologies, and start-up practicums. With help from governments and enterprises alike, educational curricula should concentrate on fostering and attracting the next generation of talent, while mitigating the skills gaps in today’s workforce.
Governments also need to future-proof their nation’s workforce, ensuring that they emerge more resilient in a post-COVID environment. In tackling the pandemic’s immediate economic implications, emerging markets such as the Philippines have looked to upskilling to ground forms of financial assistance. For one, the country’s Technical Education and Skills Development Authority initiated a PHP 3 billion programme to upskill and reskill temporarily displaced workers. Amid high rates of retrenchment across various sectors such as F&B, hospitality, retail, and tourism, such programmes will be especially vital for mid-career and senior executives as they participate in new arenas of the digital economy.
Southeast Asia is home to an abundance of small and medium enterprises (SMEs)—accounting for between 88.8 to 99.9 percent of total establishments in the ten ASEAN Member States. To help these SMEs adapt to the “new normal” governments across the region have introduced grants and initiatives to incentivise their transition and promote the adoption of digital technologies such as artificial intelligence, IoT, automation, and robotics.
With such businesses forming the bedrock of the region’s economy, business owners need the right training and digital skills to better build up their digital capabilities and implement digital solutions to rapidly increase production and streamline their operational efficiency when the economy recovers. From government-funded accelerators to locally built e-commerce networks, SMEs across the region have been offered a vast range of opportunities to aid in their online transition. As part of Malaysia’s National Economic Recovery Plan, the Malaysia Digital Economy Corporation has pledged to onboard SMEs and micro SMEs onto e-commerce platforms, offering training, seller subsidies, as well as sales support to kickstart their digital journeys.
It’s clear that the future is inherently digital, but no country can afford to leave any fresh graduate, professional, or business behind. With progressive policymaking anchored by an emphasis on education and upskilling, Southeast Asia certainly has the potential to secure its competitive standing on a global stage.
Collectivism at scale
And yet, the will to change ultimately begins at an individual level. Despite the disparate cultures, beliefs, and politics that continue to prevail across the region, Southeast Asia has fast-distinguished itself in its collective approach to addressing the realities of the pandemic. Absent are charged conversations surrounding stimulus payouts or the politicisation of healthcare measures, spanning crowd control at political rallies or mandatory mask-wearing—instead, communities have rallied together, falling in line across the public and private sector, to benefit the greatest number rather than a privileged few.
Though digital transformation continues to materialise at a varied pace from country to country, the pandemic has pushed many governments, enterprises, and individuals to adapt rapidly to unfamiliar challenges and new ways of working. Now more than ever, the impact of progressive measures and initiatives to support the region’s growth towards a more advanced digital economy, are clear. Denoted by an underlying collective approach and smart regulation, fostering continuous innovation, building up critical workforce capabilities, and increasing the business resilience of SMEs will be the catalysts that underpin Southeast Asia’s growth in a post-pandemic future.