Digital platforms and other technology-based tools are providing new growth opportunities for businesses of all sizes and across all industries in Asia and the Pacific—a trend which could contribute significantly to the region’s sustainable recovery from the coronavirus disease (COVID-19) pandemic, the Asian Development Bank (ADB) predicted in the latest 2021 edition of its Asian Economic Integration report.
“Countries in Asia and the Pacific have leveraged rapid technological progress and digitalisation to recover and reconnect to the global economy during the pandemic. Technology is helping to forge new global linkages, which offer enormous economic opportunities, but also present new risks and challenges,” said ADB Chief Economist Yasuyuki Sawada.
Photo courtesy of ADBADB Chief Economist Yasuyuki Sawada
“It is imperative to implement policies and regulations that manage the disruptions and maximise the gains from the burgeoning digital economy, and to lock in these gains through enhanced regional cooperation.”
Business-to-consumer revenues of digital platforms reached $3.8 trillion in 2019 globally, with Asia and the Pacific accounting for about 48% of the total or $1.8 trillion, equivalent to 6% of the region’s gross domestic product. These figures are expected to have significantly increased in 2020 as more business transactions—such as ride hailing, food delivery, and e-commerce—migrate to the digital space amid restrictions imposed to curb the spread of COVID-19.
Accelerated digital transformation can potentially boost global output, trade and commerce, and employment. According to the report, a 20% increase in the size of the global digital sector can increase global output by an average of $4.3 trillion yearly from 2021 to 2025.
APAC to reap $1.7 trillion in economic dividends annually
Similarly, the Asia Pacific region would reap an economic dividend of more than $1.7 trillion yearly or more than $8.6 trillion over the 5 years to 2025. There will be about 65 million new jobs created yearly in the Asia Pacific region until 2025 from increased use of digital technologies, with regional trade also expected to increase by $1 trillion yearly over the next 5 years.
Governments in the region can leverage and reap the benefits of the emerging digital economy through policies and reforms to improve digital infrastructure and connectivity, as well as access to them. These steps include promoting fair competition and improving ease-of-doing business processes, as well as enhancing labour security and social protection measures to align with digital jobs.
The report also emphasised the need to focus on data privacy and security, taxation, partnership between public and private institutions, and regional cooperation.
The latest edition of the Asian Economic Integration report features a special theme chapter on the role and potential of digital technologies in contributing to inclusive and sustainable development, how digital technology can spur post-pandemic recovery in the region, and ways to accelerate digital transformation while managing the risks effectively.
