'Less digitalised' ASEAN firms unambitious in pursuing further digital adoption, says study

ASEAN businesses that are less digitalised found it less appealing to pursue further digital adoption. According to the ASEAN Digital Generation Report 2021 which surveyed 86,000 individuals in the region, respondents who were less digitalised cited digital skills as a key barrier, while those who were more digitalised cited factors such as trust and security concerns as barriers for further digital adoption. Overall, respondents also attributed expensive or poor Internet quality and digital services as top barriers to digital adoption. 

The identified obstacles were consistent across respondents from Indonesia, Malaysia, Philippines, Singapore, Thailand, and Vietnam, reinforcing the need for multi-stakeholder and regional joint actions to narrow these gaps and unlock ASEAN's full potential in the digital age. For instance, the report showed that the gaps in digital skills can be shortened through intergenerational skills transfer, particularly from youths to the older generation; as 36% of respondents said that taught others how to use digital tools during the pandemic. The report also revealed that the benefits of digitalisation were observed to be unevenly spread across the region.

The report was launched by Southeast Asian eCommerce and gaming firm Sea, in partnership with the World Economic Forum, to examine the impact of the pandemic on respondents' personal income, savings, and the role of digitalisation in the region’s economic recovery. Out of the 86,000 participants surveyed, about 8,200 were micro, small and medium enterprises.  The study flagged the gaps needed to build a more inclusive and sustainable economy; namely when it comes to access to technology, digital skills training for all generations, and measures to enhance online trust and security.

Majority of respondents said they have adapted to the challenges of the pandemic through significant digital adoption. 64% of respondents said that they have digitalised at least half of their tasks, as have 74% of respondents who are MSME owners. Those who reported greater levels of digitalisation of their work and businesses saw lower levels of income decline. In addition, the report revealed that business owners with an online presence were more likely to report an increase in savings (24%) and income (28%) compared to those without one (18%). 

ECommerce was also named a key driver of growth in ASEAN, despite MSME owners reporting a decline in income during the pandemic. According to the report, the wholesale and retail trade sectors had the highest proportion of people starting new businesses (50%), while the logistics sector had the highest share of people finding new jobs (36%). 

Santitarn Sathirathai, group chief economist at Sea, said that one of the key findings was that digitalisation has a "flywheel" effect whereby users who had first experienced the benefits of technology were more eager to deepen their levels of digitalisation. "On that note, it is critical for the public and private sectors to work even more closely to minimise any friction and barriers which may prevent the positive digitalisation momentum from taking place. Through this, digitalisation can enable post-pandemic recovery in an inclusive and sustainable way,” he said. 

Joo-Ok Lee, head of the regional agenda, APAC, at World Economic Forum, said that through this study, it wanted to understand the views, priorities and concerns of the digital users in ASEAN and gain statistical insights that will help inform and shape relevant regional policies. “The survey showed improving the quality and affordability of ASEAN digital infrastructure, equipping ASEAN workforce with appropriate skills and enhancing people’s trust in the digital environment are crucial to bring ASEAN over the tipping point for inclusive and sustainable digital transformation,” he added.

Among those surveyed for the report, 77% were youths aged between 16 and 35 years old, 56% were females and 10% were business owners. This year's report continues to monitor the impact of the pandemic on respondents, explores how the ongoing digitalisation has benefited their life and society in the real economy, what stands in their way of further digitalisation and maximisation of such benefits, and how to tackle the identified obstacles.

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Photo courtesy: 123RF

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