Strong growth, high digital penetration
As Asia’s digital economy grows, the role of AI management will become more significant. Asia seems unfazed by the US tech slowdown, with more than 91,000 workers out of a job by 2022. According to an October 2022 report by Google, Temasek, and Bain & Company, Southeast Asia’s leading digital economies will reach S$200 billion ($149 billion) in 2022, representing a 20% growth from 2021. Short-term growth, the region’s digital economy is expected to reach $300 billion ($224 billion) by 2025.
Asia’s resilience to the digital meltdown that has plagued others is a “significant shift on both the demand and supply side,” said Simon Chesterman, senior director of AI management at AI Singapore. On the demand side, high internet usage, high penetration of digital devices such as smartphones and public-level comfort with technological innovation have led many Asian individuals and businesses to quickly embrace the digital economy, Chesterman explains.
In the year As of February 2023, 93% of companies in Singapore have adopted some form of digital technology, an increase of 19 percentage points from 2018, according to IMDA. This explains a key point of divergence with some Western economies, says Chesterman. “When you have fast-growing economies, people are more willing to embrace change because they can see the benefits,” he said. “The more comfortable you are, the more resistant you can be to change.”
This need to embrace digital technologies has only increased with the global pandemic. Three-quarters (76%) of people in Southeast Asia saw technology as an enabler rather than a catalyst during the peak of Covid-19, according to a report released by VMware in August 2022 – four percentage points higher than the global average – and 77% say digitalization will improve their work and lifestyle. .
Exacerbating the high demand in the region is the continuous supply of innovation from the wide network of enterprises in the region with direct support from the government. An increase in public funding in Hong Kong has led to the creation of 3,755 startups by 2021, a 12 percent increase from last year, a record high for the special administrative region. The Singapore government It committed $US25 billion ($18 billion) to research, innovation and enterprise from 2021 to 2025, and identified growing the digital economy as one of the main pillars of that initiative.
Building a digital ecosystem
Meanwhile, Singapore’s IMDA, which bills itself as the “architect” of the island’s digital future, has introduced a series of initiatives to position the city-state as a global and regional technology hub. It has made strategic investments in hard and soft infrastructure to accelerate the growth of digital economy in the country. Singapore has achieved nationwide 5G coverage (more than 95 percent) three years ahead of schedule, and IMDA has launched digital tools such as TradeTrust that streamlines the exchange of electronic documents.
IMDA will play a central role in creating a strong digital talent pipeline and a progressive regulatory framework to foster innovation. It aims to foster growth in the digital economy by increasing the credibility and trustworthiness of digital products and services. In June 2022, for example, it opened a US$36.3 million Digital Trust Center as part of the country’s R&D efforts focused on enhancing the legitimacy of digital systems.
Government intervention often takes a two-pronged approach, Chesterman says: “Governments need to regulate to avoid market failures, because it’s ineffective to expect individual consumers to negotiate this.” Second, although the reason governments control is not focused on efficiency, we have certain values and principles to follow.