The Digital Economy in Southeast and South Asia: Towards Mutually Beneficial Cooperation with Korea

Abstract

Southeast and South Asian countries are actively promoting digital economy policies and strategies. They have a great potential in the digital economy: they generally maintain high economic growth rates, have large markets, young population, and decent ICT utilization levels, etc. The conditions for trade investment are also being improved. Though there are deviations between countries, they have strong incentives to promote digital innovation in order to achieve the qualitative advancement of industries and economy as a whole. Moreover, some countries already possess great competitiveness in digital innovation. Demands related to the digital economy are expected to grow in Southeast and South Asian countries. For example, these nations are undergoing rapid urbanization and experiencing a sharp increase in demand for electricity supply, logistics, finances, etc. with the combination of digitalization. Some countries are struggling with a lack of digital skills and technologies, and looking for cooperation with external partners. Korea is a potentially intimate partner that can contribute to substantial leapfrogging in Southeast and South Asian countries. Korea, in terms of both businesses and government policy (the New Southern Policy), is now trying to diversify its areas of cooperation with these countries beyond the manufacturing sectors. Geographic and cultural proximity, as well as the various bilateral economic relationships already established, is the foundation for cooperation in the digital economy. Because the digital economy bears relation to society and culture as well as economic and industrial areas, cooperation in the field of the digital economy can supplement the typical pattern of relationships between Korea and South East and South Asian economies, mainly centered in manufacturing production networks. Korea and Southeast and South Asian countries need to establish a comprehensive cooperation platform. Through this, they can inform partners about their various agenda and interests in digital economy-related areas and discuss ways for cooperation. Innovative small businesses and start-ups should be the focus of cooperation. Korean start-ups are now showing an increasing amount of interest in Southeast Asia. Meanwhile, Southeast and South Asian countries are keen to welcome foreign start-ups and professionals that possess innovative digital technologies and business models. Korea also has to actively participate in multilateral cooperation initiatives covering Southeast and South Asia.