Digital Economy Can Add US$1 Trillion to ASEAN GDP in Next Decade
The growth of the Digital Economy could add US$1 trillion to the GDP of the Association of Southeast Nations (ASEAN) bloc over the next 10 years, according to a report released by global management consulting firm A.T. Kearney in conjunction with Axiata Group Berhad (Axiata), one of the largest Asian telecommunication companies, at the GSMA’s 2016 Mobile World Congress.
The report, titled ASEAN Digital Revolution, focuses on the growth opportunities, the hurdles that need to be overcome and policy initiatives that will help the sector fulfil its growth potential and contribute to the bloc’s overall economic expansion. The report highlights the following factors that could see ASEAN become one of the world’s top-five digital economies by 2025:
- A robust economy with a combined GDP of US$2.5 trillion growing at 6% per annum
- A literate population of more than 600 million, of which 50% are below 30 years of age
- A well-developed ICT cluster with a track record of innovation and investment into new technology
“When it comes to market size and growth opportunities, there are few economic regions that can match ASEAN’s potential, especially when it comes to the digital economy. More than half of the bloc’s population is aged 30 or below. This is the consumer group which is most likely to contribute to digital economy as they are most tech savvy,” says Naveen Menon, Partner and Asia-Pacific Head of Communications, Media & Technology Practice at A.T. Kearney and one of the authors of the report.
“The confluence of technology innovation, a youthful population and robust economies can help ASEAN leapfrog into the vanguard of the digital economy” he added.
Jamaludin Ibrahim, President and Group Chief Executive Officer of Axiata said, “Through accelerated innovation, mobile network operators are ready to support and grow the ASEAN digital economies of cashless societies, smart cities, borderless digital services and financial inclusion. However, for mass adoption of the services to drive digital economies, policies and a strong digital agenda is required in the region with visionary government and industry collaboration. It is our hope, therefore, to see operators and governments quickly come together to accelerate this development. I believe a ‘revolution’ is required!”
The report adds that the impending implementation of the ASEAN Economic Community (AEC), which promises to promote free movement of goods, services, investment, skilled labor and freer flow of capital, is also likely to provide a big boost to the sector.
However, it highlights issues that need to be addressed, and policy initiatives that need to be implemented, for the region to meet the growth potential. These include:
- Developing a comprehensive digital strategy, not just at the country level but one for the entire region
- Improving broadband and Internet access by releasing an additional 20MHz of spectrum per operator, per country
- Ensuring there are no more than four telecoms operators per market
- A comprehensive overhaul of in-country and cross-border regulations to ensure policies help boost growth of domestic firms
- Accelerating innovation in mobile financial services like allowing creation of digital-only banks
- Creating a single digital payment platform first in-country and then across ASEAN
- Creating 35 ‘smart’ cities that harness the power of technology to empower businesses and consumers
- Creating a national ID in each country for delivery of public services linked to the mobile phone and ensuring its interoperability across ASEAN
- Enhancing trust and security in ASEAN’s digital economy by harmonizing cybersecurity, data security and privacy laws across the region
- Fostering a culture of digital innovation by revamping the K-12 and higher education system
About A.T. Kearney
A.T. Kearney is a leading global management consulting firm with offices in more than 40 countries. Since 1926, we have been trusted advisors to the world’s foremost organizations. A.T. Kearney is a partner-owned firm, committed to helping clients achieve immediate impact and growing advantage on their most mission-critical issues.
As one of the largest Asian telecommunication companies, Axiata Group today operates in nine countries, servicing over 260 million subscribers. With a diverse portfolio in mobile network operations, communications infrastructure services and digital services, the Group pieces together the best in connectivity, technology and people in its vision of Advancing Asia.
Axiata has controlling interests under the brand name of ‘Celcom’ in Malaysia, ‘XL’ in Indonesia, ‘Dialog’ in Sri Lanka, ‘Robi’ in Bangladesh and ‘Smart’ in Cambodia, with strategic interests in ‘Idea’ in India and ‘M1’ in Singapore. ‘edotco’, the Group’s infrastructure company, operates in five countries to deliver telecommunications infrastructure services, amassing a portfolio of over 16,000 towers and 12,000 km of fibre. It aims to be one of the top regional tower companies and is committed to responsible and sustainable business operations.
In 2012, Axiata established Axiata Digital Services (ADS) to capture the rapid growth in internet-based businesses. Within three years, ADS has built a portfolio of 28 digital brands, servicing growing demands in mobile money, mobile adverting, e-commerce, entertainment and education.
As a committed and long-term investor, Axiata provides employment to 25,000 people within its operations. In line with its sustainability goals, the Group actively supports and drives young talent development; disaster response and recovery; as well as green initiatives.
For more information, please visit www.atkearney.com.