According to a 12-year study by a university, our region has the two hallmarks of digital success for sustainable growth.
What progress have countries in the Asia Pacific region (APAC) made in advancing their digital economies, fostering trust and integrating connectivity within the lives of billions?
According to studies by the Fletcher School at Tufts University, Hong Kong, Singapore, South Korea and Taiwan are among the most digitally-dynamic countries. In Q2 2020, the latter two countries significantly outperformed the OECD growth rate amid worldwide lockdowns.
These countries feature high levels of available talent, active research and development collaborations between industry and academia; and a strong record of creating and bringing digital products into the mainstream.
Indexing digital progress
Bhaskar Chakravorti, Dean of Global Business at Fletcher, said: “The pandemic may be the purest test of the world’s progress towards digitalization. We have a clearer view on how dynamic digital economies can contribute to economic resiliency during a time of unparalleled global turmoil and can be positioned for recovery and change.”
In its work with payments solutions firm Mastercard, the school has unveiled other findings using its own Digital Intelligence index:
- With nearly two thirds of the world’s population online today, we are entering an ‘after access’ phase, where access to technology alone is not enough. Aspects such as the quality of access, effective use, institutional accountability, quality of robust data governance and trust policies are greater factors in determining digital competitiveness and sustainability.
- Young people in emerging economies are demonstrating high levels of digital engagement, a bright spot for governments attempting to expand digitalization in their economies.
This year’s index looks at two components: Digital Evolution and Digital Trust. Digital Evolution captures an economy’s historical momentum from the physical past to the digital present. Digital Trust is the bridge that connects its journey from the digital present to an intelligent and inclusive digital future.
Digital evolution scorecard
Drawing on 12 years of data and supposedly mapping 95% of the world’s online population, this scorecard measures 160 indicators in 90 economies across four key pillars: institutional environment, demand conditions, supply conditions, and the capacity for innovation and change. These segment into four categories:
- ‘Stand Out’ economies in APAC are Hong Kong, Malaysia, Singapore, South Korea and Taiwan. They are in this category because they are digitally advanced and exhibit high momentum. They are leaders in driving innovation, building on their existing advantages in efficient and effective ways.
- ‘Stall Out’ economies in APAC are Australia, New Zealand and Japan. These are noted as mature digital economies with a high state of digital adoption despite slowing digital momentum. They tend to trade off speed for sustainability and are typically invested in expanding digital inclusion and building robust institutions.
- ‘Break Out’ economies in APAC include China, India, Indonesia, Thailand and Vietnam. These are evolving rapidly with momentum and a significant headroom for growth that is highly attractive to investors.
- ‘Watch Out’ economies such as the Philippines have a number of infrastructure gaps. Despite this, young people are showing enthusiasm for a digital future with increased use of social media and mobile payments.
Digital Trust scorecard
This measures 198 indicators in 42 of the index’s economies across four key pillars: behavior, attitudes, environment, and experience.
- Economies such as Hong Kong, Singapore, South Korea and Taiwan provide citizens with a near seamless experience, delivering advanced infrastructure, broad access and unparalleled interaction. This experience is also matched by high levels of engagement, offering these economies a clear advantage in a ‘beyond access’ future.
- Economies such as China, Indonesia and Vietnam have increasingly-favorable attitudes about their digital future, buoyed by rapidly-expanding digital adoption and opportunity.
- Overall, digitally advanced economies with higher levels of socio-economic equity expressed more positive attitudes towards digital technologies, while fast-moving Break Outs are more optimistic than their Watch Out peers.
According to Matthew Driver, Executive Vice President, Services (Asia Pacific), Mastercard: “The pandemic has advanced digitalization across APAC by at least five years in as many months, only serving to further accelerate the development of the digital ecosystems across the region. With rising levels of consumer trust and engagement and growing digitization in the small business segment, all deeply supported by proactive support from governments, the opportunities ahead for the region’s digital economy are immense.”
With APAC poised to recover quickly from the pandemic, the strong performance in the two components of Digital Evolution and Trust will only serve to further support Asia’s leadership in digital, Driver said.