Summary:

According to the latest Google, Temasek, and Bain report [1], ASEAN’s digital economy is projected to triple in size, reaching a value of 600 billion US dollars by 2030. Achieving this target, and potentially surpassing it, requires substantial private funding in the innovation and growth of the digital economy.

Using venture capital investment data from Crunchbase, we measured the relative attractiveness of investing in ASEAN’s digital economy compared to its other sectors. The findings reveal that ASEAN not only attracts a significantly higher share of digital economy investments than the world average but that its investment attractiveness for digital economy investments is the highest of any major economy worldwide.

Importantly, this trend is not driven by any single economy. All ASEAN-6 countries have a higher digital economy investment appeal than the world average. Within ASEAN, Singapore stands out as the top destination for digital economy investments, followed by the Philippines and Malaysia. While Indonesia remains above the global average, its digital investment attractiveness is comparatively lower within the ASEAN region.

To maintain and expand this momentum, it is essential for ASEAN economies to reduce the restrictiveness of their digital and data policies, which are currently more restrictive than the global average. Further aligning data transfer requirements within the region will also be crucial to boosting digital trade.

Highlights:

• ASEAN stands out globally for attracting a significantly higher share of digital economy investments compared to other sectors.
• No single ASEAN country drives this trend; all ASEAN-6 countries are more favorable for digital investments than the global average, with Singapore leading, followed by the Philippines and Malaysia.
• To sustain and enhance investment momentum, ASEAN economies can reduce the restrictiveness of their digital and data policies and align data transfer requirements within the region.

For further analysis, please see our working paper: Investing in ASEAN’s Digital Economy: Risks and Opportunities (Authors: LIU, Jingting and SENGSTSCHMID, Ulrike)

Article By SENGSTSCHMID, Ulrike

Graphic By YAN, Bowen

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[1] E-Conomy SEA 2023: Reaching New Heights: Navigating the Path to Profitable Growth