Securing our digital future

Securing our digital future

Paying bills and transferring money using a mobile phone is now second nature for most people in the digital era. My own digital journey started later than some, when the Covid-19 pandemic started to affect my life profoundly. Banks and restaurants were closed and commuting on public transport made me uncomfortable.

Now I'm used to paying bills, buying goods and summoning rides via applications that make life really convenient. But honestly, I never thought that when I went to a homestay in an Akha village in Chiang Rai last week that I could use PromptPay -- the government-initiated money transfer platform under the national e-payment scheme -- to pay for my room and food. Fruit vendors in the village, 1,400 metres above sea level at the Thailand-Myanmar border, also accept PromptPay payment from tourists.

"You can also use Khon La Krueng (Half and Half) here," said the homestay owner who is also Akha, referring to the government co-payment scheme launched to ease people's economic burden and stimulate consumption during the prolonged outbreak.

The Covid crisis has certainly accelerated the rise of the digital economy. Another 60 million Southeast Asians have become digital consumers since the pandemic began, led by those in Thailand and the Philippines, according to the latest annual report published by Google, Temasek of Singapore and the consultancy Bain & Co.

The digital consumer population now totals 350 million across Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam, said the e-Conomy SEA 2021 report launched earlier this month.

Forty million new internet users also came online this year. That raised internet penetration in Asean to 75%, with eight in 10 of the new users having bought something online at least once, from groceries and food delivery to online entertainment and finance.

Covid-linked restrictions on movement and social interactions have been a key driver of greater digital service adoption. Online spending soared 49% in 2021 to US$174 billion, driven mainly by e-commerce, travel, media, transport and food.

The region's booming internet economy is set to double in value to $363 billion by 2025, eclipsing the previous forecast of $300 billion, the report noted. Online shopping is now forecast to hit $234 billion, up from $172 billion predicted earlier.

While online consumerism is well established in urban areas with high internet connectivity, first-time digital consumers are actually coming more and more from non-metro areas, said Stephanie Davis, vice-president for Google Southeast Asia.

"In fact, that was the majority in 2020 and an even larger majority in 2021, so we see this urban-rural divide beginning to close," she said.

The report's authors see a bright digital decade ahead in Southeast Asia and the possibility of a $1-trillion digital economy by 2030. Indonesia leads the way, with a projected value of $146 billion by 2025. Vietnam is expected to grow at the fastest rate among the six countries tracked by the study, nearly tripling over the next four years.

Investment in the regional digital economy hit an all-time high this year, with $11.5 billion of funding in the first half, on track to exceed total funding last year.

A World Economic Forum report also shows how digitisation has accelerated across Asean where many citizens have become used to working remotely. The survey of 85,900 people from six Asean countries, mostly aged between 16 and 35 years, found that 64% had digitised over half of their tasks. This number rises to 74% among micro, small and medium enterprise (MSME) owners.

Amid the crisis, nearly one-third of respondents created a new business, while 12% created employment for others and 25% started a new job. MSME entrepreneurs, in particular, recognised the crucial role of digitisation for economic recovery.

"Those who were 'more digitised' tended to be more economically resilient during the pandemic," noted the Asean Digital Generation report launched last month in collaboration with Singapore-based Sea Ltd.

However, access problems continue to slow down further digital adoption. An expensive or poor internet connection and access to digital devices were the top two barriers, together with a lack of digital skills. Among those who have digitised a lot of their activity, concerns have shifted toward digital trust and security.

Both reports concluded that there is still a lot of work to do to realise Southeast Asia's digital potential. Among the challenges are closing digital skill gaps, greater investment in digital infrastructure, and well-designed data governance and security frameworks.

This will take sustained and coordinated regional efforts to ensure an inclusive, sustainable and prosperous Asean digital economy.

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