Digital economies around the world have undermined conventional notions of how age-old industries are structured. How businesses and consumers use information, goods and services has been completely transformed by digital transformation, giving rise to the attention policymakers globally have had on the digital economy recently.
One example is the recent G20 Summit in Japan, which saw discussions around the digital economy take a prominent seat as world leaders discussed better international laws to govern this titan of an industry. Japan proposed the “Osaka Initiative”, a framework based on trust that promotes free cross-border data with enhanced protection. This supports the premise that information is a powerful driver of economic growth, and structured rules of law need to be established to protect privacy, equality, diversity and internationally recognised labour rights.
There is no doubt the digital economy is a valuable vehicle for development and inclusion. Despite its name, digital economies are not limited to just economic developments but brings government, businesses, suppliers and consumers together in a digital value chain where innovation thrives. It allows regional businesses to extend its reach from local audiences to becoming a player on the global stage due to increasing market liberalisation.
Asia’s digital transformation is already having a massive impact across the region. Closer to home, its benefits are evident. Thanks to its continued investment in establishing an advanced technological infrastructure, Singapore took out first place in this year’s IMD World Competitiveness Ranking. But as we reap the benefits of digital economies, countries risk falling victim to the belief that depending wholly on technology is the key to progress. Here are some key areas that both businesses and government need to focus on to avoid this pitfall.
- The advantage of digital inclusion
For the millions that previously sat outside the formal financial ecosystem, increased access to digital financial services has proven to be life-changing. The most successful digital economies are those that have harnessed the power of technology to benefit underserved communities. Digital inclusion has in fact outpaced financial inclusion in Southeast Asia with more people holding smartphones than bank accounts, giving rise to many opportunities for the underserved communities to gain access to financial services for the first time through digital lending, e-wallets, and cashless payment apps, just to name a few. Rather, businesses and government need to assess how to best help this demographic stay plugged into today’s fast-evolving banking and fintech services. Some considerations include programs to boost digital and financial literacy, creating products and services tailored to the range of needs of the elderly, and addressing concerns over data security.
- Workforce reskilling
A digital economy is driven by a workforce where human skill and technological capabilities come together in harmony. In 2016, Singapore launched TechSkills Accelerator, an initiative aimed to equip workers with emerging digital skills that are in demand by companies across all industries. The program enhances training and placement opportunities for ICT-related jobs – which is necessary given the rate technology is changing – but human skills will always be needed in a digital economy and remain the bedrock for innovation.
- Humanising Digitalisation
As intimidating as all of this sounds, governments and businesses are treading on dangerous waters if they have a technology-only focus for the future. They also need to recognise the importance of humanising digitalisation. As we progress toward an inevitable world revolution, there’s a real need to steer the conversation towards reassessing the value the non-technological aspects that make digital economies a possibility. Soon, man and machine will no longer be mutually exclusive but a sum of its parts – offering human-led experiences empowered by new technologies, and many industries could miss out on this economic gamechanger if they narrow their vision of the future to be technologically dependent.
Ultimately, national, regional and international cooperation on creating progressive policies and frameworks to better govern digital economies could spell the difference between progress and mere promises. We need to focus on ensuring that everyone has a place in the digital future.