Digitalization for Economic Development in the ASEAN: Challenges and Strategies

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Masatoshi Hara, Toru Hashi

Abstract

ASEAN is rapidly embracing digitalization, which holds immense potential in various aspects. Digitalization can lead to a shift towards service-based economies through technological innovation, bolster manufacturing industries, address life-related challenges through digital technologies, and expand the labor market by creating new skills and job demands. On the supply side, Information and Communication Technology (ICT) is fostering opportunities and enhancing operational efficiency. Digital Application Services, including Singapore's Grab and Indonesia's Go-Jek, have been experiencing rapid growth. Nevertheless, ASEAN comprises both higher-middle-income economies (HMIEs) and lower-middle-income economies (LMIEs), each with distinct realities and strategies related to ICT promotion based on their development stages. HMIEs are advancing knowledge transfer, improving technological capabilities, and transitioning to high-value-added industries. LMIEs are leveraging opportunities in global supply chains to utilize excess labor and reduce unemployment. While digitalization is a catalyst for economic growth and improved quality of life, governments must respond appropriately and formulate sustainable development frameworks. This paper focuses on assessing whether ASEAN's transition to digitalization can contribute to economic development, considering advanced manufacturing and service-based economies. It also aims to understand the unique challenges and realities in each country, reflecting on a strategic framework tailored to their development stages, utilizing mixed analysis for validation.

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How to Cite
Masatoshi Hara, Toru Hashi. (2023). Digitalization for Economic Development in the ASEAN: Challenges and Strategies. European Economic Letters (EEL), 13(4), 819–833. Retrieved from https://www.eelet.org.uk/index.php/journal/article/view/664
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