Southeast Asia is experiencing a digital renaissance. From Jakarta and Manila to Ho Chi Minh City and Kuala Lumpur, the region is witnessing a tech-fueled transformation: the digital economy is projected to surpass USD 300 billion by 2025. Spurred by increased internet penetration, the proliferation of mobile technology, and accelerated digital adoption during the COVID-19 pandemic, this boom holds the promise of innovation, entrepreneurship, and inclusive growth (Li, 2022; Astuti et al., 2023). But amid this optimism lies a sobering question: Can the region’s digital revolution truly leave no one behind?
The success stories are compelling. In Indonesia, digital payment platforms such as GoPay, OVO, and ShopeePay have reshaped consumer behavior, especially among Generation Z. The ease of transactions, integration with e-commerce, and widespread mobile usage have not only boosted spending but also opened the doors for new market entrants (Raharjo, 2023). Small and medium-sized enterprises (SMEs), in particular, have benefited. By leveraging digital tools, many SMEs have increased their competitiveness and economic resilience, effectively reducing economic inequality by enabling grassroots participation in the digital economy (Khoifin & Achyar, 2023).
These developments highlight the potential of digital transformation as a force for economic empowerment. However, they also cast a spotlight on an emerging fault line: the persistence of a deep and multifaceted digital divide.
A Two-Speed Digital Transformation
Access to digital services is increasingly becoming a prerequisite for participating in modern economic and social life. Yet, millions in Southeast Asia remain on the margins. The digital divide in the region is not merely a matter of who has access to the internet; it is also about the quality, speed, affordability, and digital literacy necessary to use that access meaningfully.
As Hilbert (2016) argues, bandwidth inequality is closely linked to income inequality, particularly in lower-middle-income countries. Urban areas across the region often enjoy high-speed broadband and 5G, while rural communities rely on unstable mobile connections and pay disproportionately more for limited access. In the Philippines, for example, internet data costs remain among the highest in Southeast Asia relative to income. In Myanmar, the recent political instability has also jeopardized digital infrastructure investments and widened the access gap.
Furthermore, Zia et al. (2009) note that digital exclusion mirrors existing socio-economic disparities, including gender, education level, and geographic isolation. Women, older adults, and those in remote areas often experience limited exposure to digital tools. For these communities, digital platforms do not empower; they alienate.
Infrastructure Isn’t Everything
Governments across Southeast Asia have responded with ambitious connectivity projects. Indonesia’s Palapa Ring has expanded broadband coverage to remote provinces. Vietnam’s digital roadmap envisions universal digital inclusion by 2030. These are important steps, but connectivity alone is not enough.
Digital literacy is just as crucial. Without the skills to access online services, assess information, and safeguard digital identity, access does not translate into agency. Across the region, digital skills remain uneven. Many rural school systems lack IT infrastructure and trained teachers, and adult populations outside the workforce often receive no digital education at all.
In this context, investments in digital infrastructure must be accompanied by educational programs that close the usability gap. Otherwise, Southeast Asia may find itself with two digital economies: one inclusive and innovative, the other disconnected and disenfranchised.
The Role of Innovation Hubs and Foreign Investment
The development of digital ecosystems, such as Indonesia’s Nongsa Digital Park and Singapore’s Smart Nation, offers promising models. These innovation corridors attract foreign direct investment, build talent pipelines, and serve as regional tech nodes (Li, 2022; Muzwardi et al., 2024). With the right policy mix, they can become engines of inclusive development.
However, the risk of digital enclaves looms large. Without targeted efforts to connect these hubs to local communities, their benefits may remain limited to urban centers and skilled professionals. To prevent this, governments must ensure that innovation zones are embedded in broader regional development strategies—through SME capacity-building, vocational training programs, and public-private partnerships that prioritize inclusion.
From Digital Growth to Digital Justice
The challenge is not just about maximizing digital growth; it is about achieving digital justice. This concept reframes digital access as a right, not a luxury. It acknowledges that technology can both empower and exclude and calls for a deliberate approach to digital policymaking that prioritizes fairness, equity, and participation.
To realize this vision, Southeast Asia must pursue an integrated digital development strategy:
- Subsidized Connectivity for Marginalized Communities
Governments should provide affordable or free internet packages for underserved regions, funded by universal service obligations or digital development funds.
- Localized Digital Literacy Programs
National campaigns should promote digital literacy, especially among women, the elderly, and rural youth. These programs must be multilingual and culturally contextual.
- Inclusive Platform Design and Accessibility
Tech companies must be encouraged to develop platforms that are user-friendly, accessible for people with disabilities, and mindful of varying literacy levels.
- Stronger Regulatory and Data Protection Frameworks
With data becoming a core resource, the region needs robust regulations to prevent data exploitation, algorithmic bias, and authoritarian surveillance (Wijayanto et al., 2022).
- Multistakeholder Partnerships for Inclusive Innovation
No single actor can bridge the divide. Governments, civil society, the private sector, and international donors must collaborate to expand digital access and opportunity.
- Data-Driven Accountability Mechanisms
Governments should regularly publish disaggregated data on digital access and use, by income, gender, geography, and disability status, to inform policy decisions.
The Stakes Are High
At its best, Southeast Asia’s digital revolution can be a great equalizer. It can empower women entrepreneurs in remote areas, connect informal workers to formal marketplaces, and give young people access to global knowledge networks. But without inclusion at its core, the same revolution could entrench inequality, concentrate economic power, and create new forms of digital exclusion.
As Li (2022) rightly notes, the region’s future hinges not merely on adopting digital technologies but on transforming them into instruments of inclusive growth. That will require deliberate policy choices, sustained investment, and, above all, political will.
Southeast Asia has a rare opportunity to redefine its development trajectory in the digital age. The challenge is clear: to ensure that the next phase of digital transformation does not only drive prosperity but also dignity, equity, and justice for all.
