The digital economy in Southeast Asia

Recently, talk about the digital economy has been mostly negative; and focused on the perceived unemployment it causes through increased automation. But many people in southeast Asia are confused by this concept, so in this article, we will detail what it is and why you should care about it? 

What is the Digital Economy?

Worldwide, millions of people think that the digital economy only refers to activity conducted using the Internet. However, this term covers the widespread use of IT in every part of the economy. That includes transactions between businesses to business and business to consumers, plus any internal operations. IT has become so ubiquitous in our daily lives that it’s even in those items we don’t think about.

The different aspects of the digital economy include:

  • The Internet
  • Electronic communications, like email and SMS.
  • Digital payments
  • Automation
  • Digital automation
  • Social media

Some examples of a digital economy include:

  • eBay/Amazon
  • Netflix
  • Airbnb
  • In-app payments

Why is the digital economy important

This type of economic activity is spreading like wildfire across the world, leading to innovation and growth. There is serious potential here for people across different industries. Billions of people worldwide are connected to the Internet, offering significant potential for growth and new opportunities to seemingly pop-up from nowhere. 

Newer digital trends like social media and cloud computing are changing the way that businesses operate. Additionally, there’s more ability for technological innovation. That is why the digital economy is so important.

Benefits of the digital economy

The benefits of the digital economy are varied and essential to modern life. One of the most significant being that now there’s almost unlimited access to information. That information means you can make a more informed choice. 

Online ordering

For example, you can search around to compare the prices and services from different companies. It’s easier than ever to find the top services from the leading companies, for the best price. Before the digital era, most people shopped local, and it wasn’t easy to make informed decisions.

The digital economy also saves a lot of time. Thanks to this technological marvel, you get the convenience of ordering items online. You don’t have to travel to the store, which is especially good if you live in a rural location. Sometimes you can even get those items the next day, depending on various factors. 

Saving money

Another benefit is that it can save you money. Businesses can save money through operating primarily online, rather than renting out physical space. Ecommerce sites have their items shipped directly from the warehouse, rather than having a brick-and-mortar store. Businesses can have employees who work from home, saving money on office space and equipment needed.

Small business

Small businesses and startups can benefit from this economy because they don’t have as many obstacles to overcome. They can enter the business world using the digital economy, then stand out due to their innovative approaches. Your business can seriously compete with more traditional companies, which can actually transform your industry. 

Remote working

Lastly, the digital economy enables people to work remotely. As previously mentioned, this can help businesses save money. Companies can benefit from this because they can have a bigger pool of candidates to choose from. It is also great for the employees; they get the flexibility they need and don’t have to struggle with a daily commute. 

The future of the digital economy

The digital economy is transforming Southeast Asia’s economy. During the pandemic, digital services in this region saw a massive surge. According to reports, over 40 million people went online for the first time during this time. In 2020, this region’s Internet sector surged, seeing 63% growth in online sales and 58% online travel. This growth hit US$100 billion in value, and analysts predict the Southeast Asia region could surpass the US$300 billion mark by 2025

The pandemic may have been responsible for many people taking advantage of the digital economy, but these habits have staying power in the region. Stephanie Davis, the Google Southeast Asia Vice President, said that consumers in the region shopped online to avoid the virus. However, others have claimed the reason is a simpler one, “it is efficient, and they found it to be helpful.” 

Digital financial services are just one area that is expected to grow to US$1.2 trillion by 2025. That is because more businesses are accepting online payments. Digital payments include debit cards, account-to-account transfers, and mobile wallets. Another area of significant growth is regional technology investments. Health and education technology are areas to watch in the future as well


The digital economy is continuously evolving and will see a great deal of growth over the next few years. That is especially true for the Southeast Asia economy, which proves that the benefits of the digital economy far exceed the negatives, which was demonstrated during the pandemic. 

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Simon Cohen
Simon Cohen
America | Simon Cohen is native New Yorker and a fan of all things tech. Apart from writing about tech, Simon spends his time in the music studio as a producer.

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