How ASEAN and Australia Will Achieve a Fully Powered Digital Economy by 2025

This op-ed is part of AASYP’s Digital Dialogues 2022, which is a programme that aims to provide a platform and forum for future leaders from across the region to contribute to the policymaking and diplomacy sphere by engaging in issues relating to innovation and investment, digital economy, and regional mobility.

Modern human beings are familiar with Machine Learning (ML), the Internet of Things (IoT), and Artificial Intelligence (AI). As the world shifts its emphasis toward the development of a digital economy, these phrases are increasingly employed in business and politics. We are often told that “technology is the future,” and in many respects, this is accurate.

What is the Digital Economy?

The digital economy is the branch of the economy that deals with the production and distribution of digital information and products. It includes businesses that produce and sell digital goods and services and those that use digital technologies to enable new business models.

In recent years, its growth has been accelerated by technological advancements and the increased availability of high-speed Internet connections, which has led to the creation of new industries, jobs, and ways for businesses to reach customers.

Although technology may not completely replace human professions, it has a substantial impact on the skills required to provide value to the economy, as well as on how we learn and interact. While this article does not get into the specifics of artificial intelligence (AI), machine learning (ML), and the internet-of-things (IoT), it will discuss what a technology-driven future looks like and what it implies for the digital economies of ASEAN and Australia, given the digital gap in the area.

ASEAN Potential

The ASEAN Economic Community (AEC) has the potential to become the fourth biggest economy in the world by 2050, with the ASEAN Digital Economy estimated to increase by 500% to over US$200 billion by 2025. As seen by the increasing number of ASEAN-based e-commerce businesses, such as Singapore’s Lazada and Indonesia’s Tokopedia, the digital economy is projected to rise to $88 billion by 2025.

The Southeast Asia (SEA) internet economy is expected to increase from $72 billion in 2018 to $240 billion in 2025, according to the 2018 Google-Temasek e-Conomy Southeast Asia (SEA) study. As investor trust in the area continues to climb, this indicates enormous growth potential for ASEAN as a regional economy, particularly in sectors such as e-commerce, ride-hailing, and the general startup environment.

How ASEAN and Australia React to Disruption (The Challenges)

Economic expansion is both constructive and harmful. ASEAN-Australia needs to find a balance between fast growth, digitisation, and managing disruptions so that the region can reach its full potential.

Although disruption has a bad connotation, it is inevitable during a time of progress and, if handled effectively, may be helpful. As such, ASEAN and Australia must work toward inclusive and sustainable development that ensures the safety of its users, even though becoming a rapidly growing economic power through digitalization is appealing.

ASEAN intends to pursue economic integration within the region and between ASEAN and the rest of the globe. Even though ASEAN’s policy of economic integration may have worked well in promoting free trade, the region’s growth as a digital hub may need a different approach.

In addition to AI, automation might have a significant impact on the Southeast Asian industrial industry. Currently, Southeast Asia is one of the largest industrial centres outside of China due in part to its inexpensive labour. This sector might be fundamentally transformed by the advent of automation, which would boost efficiency and further reduce prices. However, it has the potential to eliminate employment for a large number of people in the area. According to research titled “ASEAN in Transformation” by the International Labour Organization (ILO), roughly 137 million paid employees in Cambodia, Indonesia, Vietnam, the Philippines, and Thailand might lose their employment during the next 20 years.


In the next few years, it is anticipated that the digital economy of ASEAN will expand tremendously. However, growth at such a rapid rate as a region may not be sustainable for all ASEAN members since several nations continue to face additional developmental obstacles that may restrict their progress.

While it is commendable that ASEAN has engaged in cooperation discussions through various initiatives such as the ASEAN Digital Integration Framework and the ASEAN Innovation Network, it is imperative that ASEAN recognise the underlying differences and distinct needs of each country rather than being overly focused on growing as one. 

This article was written by Justin Ho Guo Shun edited by the Diplomacy Team, and reviewed by the AASYP Publications Team.

Note: The views and opinions expressed in this op-ed are solely those of the writer and in no way represent nor reflect the position of AASYP and members of the AASYP Publications Team. The AASYP Horizons Blog provides a platform for the free expression of opinions and intellectual discourse.

More to explore