Digital Economy Landscape in Southeast Asia & Policy ... Thailand … · The signs of rapid digital...
Transcript of Digital Economy Landscape in Southeast Asia & Policy ... Thailand … · The signs of rapid digital...
Digital Economy Landscape in Southeast Asia & Policy Challenges for Governments
Digital Era For Thailand: Beat the Limits, Bangkok, October 2018 Natasha Beschorner Senior ICT Policy Specialist
The signs of rapid digital adoption are everywhere in Southeast Asia…
Individuals are using the Internet at world-leading levels for messaging, social media, and browsing
78 percent of consumers get information on products/services from social media
30-60% social media penetration rates
3.6 hours of mobile internet/day
Photos: Business Times; Straits Times; Gojek
Sources: Google; RVC; We Are Social
Individuals buying online through social media (RVC, 2016)
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But the digital economy is about more than getting people online
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Overall DAI Business People Government
World Bank Digital Adoption Index, 2016
Basic indicators of firms’ use of technology (e.g. having a website) lag comparators >31 percent of firms in Southeast Asia have their own website >Global average: 44 percent >East Asia and the Pacific average: 36 percent >China: 66 percent >India: 49 percent
Source: World Bank Enterprise Surveys
Digitally enabled services trade is growing (ASEAN-selected economies)
Source: ASEAN Secretariat, WB estimates
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But Digital Adoption by Businesses needs to accelerate
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Digital Adoption Index
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What are some key enabling factors for growing the digital economy in SE Asia?
• This is a prerequisite and a physical underpinning to the digital economy and includes the availability of affordable access to broadband, devices and safe cyberspace that instils user trust.
Connectivity
• Access to safe and secure digital payment services provide the opportunity to engage in electronic transactions either as consumers or entrepreneurs, domestically or in overseas markets.
Payments
• In a digitally-driven economy, skills needs range from basic digital and data literacy, to specialized skills to harness the productivity benefits of digital innovation. Digital skills
• The expansion of the digital economy highlights the importance of a developed and cost-effective logistics sector given the higher demand for delivery of goods, especially at low values, both within and across borders.
Logistics
• Policy and regulation specific to each of the other pillars affects their progress. There is also a further set of cross-cutting policies and regulations that shape the digital economy. These issues include those which relate to cross-border data flows, data privacy, cybersecurity, consumer protection, electronic transactions and e-commerce laws.
Digital policy and regulation
Digital policy and regulation: key aspects of national and regional policy frameworks are underdeveloped
1. Framework for e-commerce transactions largely present >E-transactions laws in most countries
2. Framework for data privacy and cross-border data flows less mature >Malaysia, Singapore, Philippines have comprehensive data protection laws >Draft laws in Thailand and Indonesia >Several regulations but no comprehensive law in Vietnam >No public plan for laws in Myanmar, Brunei, Cambodia, Lao PDR
3. Framework to promote trust and security is underdeveloped >Consumer protection: trust deficits a key barrier to consumer adoption (e.g. payments, product quality) >Cybersecurity legal frameworks, enforcement capacity, expenditure relatively limited
National policy frameworks: all countries have some kind of digital economy strategy in most cases, institutional mechanisms to prioritize implementation and monitor are needed
Regional policy frameworks: growing body of high-level regional goals/principles need to move to concrete implementation; technical discussions on coherence of regulations
Connectivity: the digital divide persists, even if mobile broadband usage has grown – and fixed broadband lags, with affordability and speed of connection key weaknesses
13% internet penetration growth per year in Southeast Asia between 2011 and 2016
But, half the population still lacks Internet access in Indonesia, Vietnam and Thailand
High levels of mobile broadband… but fixed broadband is lagging. Affordability of fixed broadband is a factor limiting adoption in a number of countries
“First mile” international gateway prices relatively high
Source: Telegeography, 2018
Key issues for governments: Competition along the broadband value chain; infrastructure sharing and rights of way
Thailand targets 95 percent broadband network access across the country at 100 Mbps speed in all regional hubs by 2020
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Mobile and Mobile Broadband Penetration (% population), 2018
4G/LTE % 3G % GSM (2G) %
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Fixed Broadband population penetration (% population),
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Digital skills: policy needs to build long-term foundations while also helping meet short-term needs
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tasks, processing information)
Basic digital skills (e.g. computer use)
Foundational skills (e.g. literacy and numeracy)
Source: OECD, EU, World Bank
Complementary skills >WEF Human Capital Index, ranks from 24th for Singapore to 112th for Myanmar >Indonesia, Cambodia, Lao PDR, Myanmar in bottom 50% of countries >Most jobs are medium- or high-skilled, but gender gap in workforce participation is generally high across ASEAN
Basic digital skills: a mixed picture >Online population is tech-savvy… >But only half the population is online
Foundational skills: high literacy (>80%)
Key issues for governments: >Combining long-term education system development with short-term responsiveness to need >Supporting lifelong learning >Coordinating with the private sector to define and meet skills gaps
The region needs to catch up in the use of digital payments: a lack of trust and low consumer awareness driving a continuing preference for cash payments
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Share of account holders that access their account digitally
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Means of payment for online purchases
Cash Online
Key issues for governments: Setting appropriate regulatory frameworks; facilitating e-payment adoption through government payments
Logistics: central to e-commerce and trade, and a key sector for digital transformation
Changing industry dynamics
•Entry of new players, e.g. retail giants
•Growth of 4PL models for organizing supply chains
Digitalization
Data-driven analytics for supply chain optimization
Cloud logistics
Blockchain
New industry pressures
Growth of e-commerce driving small parcel deliveries & premium on time
Automated manufacturing increasing premium on timeliness over labor costs
New logistics technologies
Drones
Automated vehicles
Automated warehousing
Both affected by – and a building block – for the digital economy
>Logistics regularly features as a key barrier to e-commerce growth >Overall logistics performance (LPI) includes some top performers and a number of fast-improvers >Cross-border logistics barriers seen as the weakest area of performance
The region is witnessing many innovations in logistics associated with the digital economy…
… but could be doing more to strengthen logistics performance
Key issues for governments: Lowering barriers to entry in logistics for new players; addressing cross-border e-commerce facilitation barriers
Key messages
• The digital divide is closing but still exists in the region – although those online use the Internet for social and browsing at world-leading levels
• The digital economy is about more than being online – and there are various indications that business use of digital technology to grow is not at its full potential
• Government has a key role to play in addressing barriers in connectivity, skills, payments, and logistics – as several of the most important digital economy enablers
• Cross-cutting digital policy frameworks are underdeveloped – especially in data privacy and protection; and in addressing trust and security deficits
Some considerations for Thailand
• How to create opportunities for faster digital adoption by businesses and stimulating new investment
• Potential research on digital transformation in priority sectors of the economy
• A Thailand Digital Transformation Monitor as a tool for policymakers?
• Enhanced Digital ID platform to strengthen the digital economy trust environment
• ASEAN interoperability
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