Digital economy in Southeast Asia: challenges, opportunities and future development

Abstract

PurposeThe purpose of this paper is to (a) examine the current state of the digital economy in Southeast Asia (SEA), the challenges and opportunities derived from digital transformation and the digital economy, and the impact of the digital economy on SEA, especially human and physical capital development, and (b) propose policy recommendations for SEA countries to better manage digital transformation.Design/methodology/approachThis is a conceptual paper. The theoretical framework has been built from the three-sector governance approach to identify the issues of the digital economy and propose solutions to address the issues. Specifically, it examines the role and activities of the public sector, the private sector and the third sector to address the challenges posed by the digital economy, especially human and physical capital development.FindingsThis paper revealed challenges and opportunities derived from the experience of Southeast Asian countries and proposed several policies recommendations, including a common data policy and payment platform for the Asian region, a good training and development policy to equip the workforce with digital skills, and digital mindset as well as build cybersecurity capability and capacity at the regional level.Originality/valueThis paper is significant as it examines the development of the digital economy from an interdisciplinary perspective – including economics, digitalisation, governance, management, public policy, technology and human resource development. It also provides better insights into how SEA's digital economic development can be further improved to contribute to a sustainable regional economy.