Boao Forum for Asia Asia Digital Economy Report 2023 PDF Free Download
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Boao Forum for Asia
Asia Digital Economy Report
2023
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Ⅲ
The digital economy is the most dynamic form of economy in today’s world and is a crucial driver of
economic growth for both Asia and the world. It is highly prioritized by governments and private sectors
worldwide, which have been increasing their investments in this domain. As a high-level dialogue platform
and think tank based in Asia and with a global outlook, the Boao Forum for Asia (BFA) has identified the
digital economy as a major subject for discussion and research. In recent years, digital economy has been
one of the most discussed topics at BFA’s annual conferences and related thematic conferences. The Asia
Digital Economy Report is a collaborative effort between the BFA and the China Academy of Information
and Communications Technology (CAICT). It is another Asia-focused report in addition to the Asian
Economic Outlook and Integration Progress Annual Reports and other existing reports of the BFA. Through
this report, our aim is to provide a panoramic view of the digital economy in Asia, promote the expansion
of the digital economy in Asian countries, and contribute to exchanges and cooperation within Asia and
between Asia and the rest of the world.
This report adopts a comprehensive analytical framework based on four pillars: digital industrialization,
industrial digitization, digital governance, and data valuelization. It thoroughly examines the performance
and potential of Asia in the current wave of digital transformation. The report covers a broad spectrum
of aspects within the digital economy, ranging from general descriptions to detailed analyses. It not only
calculates the size of the digital economy and its percentage in the GDP of selected countries for statistical
understanding and comparative analysis but also provides a comprehensive account of policy measures
by examining digital economy policies in Asian countries. The study also includes regional cooperation
organizations primarily composed of Asian countries. Throughout the report preparation process, the
research team endeavored to cover all Asian countries. However, due to different data sources and
statistical methodologies, the extent of coverage of Asian countries varies with different perspectives for
analysis, but our goal is still to provide as comprehensive a reflection as possible on various aspects of the
digital economy in Asia.
Due to a myriad of factors, the current global economic recovery remains lackluster. Asia remains as
a locomotive of growth amidst the overall deceleration in the world economy. As a powerhouse for the rise
of the Asian economy, the digital economy also signifies the trajectory of global economic growth. Asian
countries boast distinctive characteristics and advantages in the development of the digital economy,
including globally leading electronic payment applications, innovative block chain technologies, and a
rapidly expanding market for industrial robots. At the same time, Asian countries also confront quite a few
challenges in this field, such as significant imbalances in development. It is our hope that the digital divide
will gradually narrow in Asian countries as they move into the future.
Foreword
Moving forward, the BFA will continue to closely monitor the progress of the digital economy in
Asia. We hope this report will not only attract more attention but also inspire additional research among
stakeholders concerning the digital economy in Asia. It is also intended as part of a joint effort to empower
Asian countries to benefit from the digital economy, amplify Asian voices in the global formulation of digital
economy rules, and contribute to advancing the digital transformation of the global economy.
Secretary General
Boao Forum for Asia
Ⅳ
The world is undergoing an accelerating transformationthe likes of which haven’t happened for a
century. Today’s world is experiencing historic changes unfolding in ways never seen before. Moreover,
the world is still coping with the far-reaching impacts of the COVID-19 pandemic, the rising trend of anti-
globalization, profound changes in the international environment, and a sluggish world economy that is
struggling to recover. Against this backdrop, the potential for the digital economy in Asia is being released
at an accelerated pace, becoming a significant force driving economic recovery worldwide.
Asian economies are fast-tracking the deployment and development of the digital economy in
key areas. In terms of infrastructure, fixed and mobile networks are being deployed increasingly fast,
covering a growing number of areas. The development of cloud computing is also progressing, providing
a computing network infrastructure and intelligent service system for the digital economy. In terms of
industrial application, new technologies and product innovation led by 5G, artificial intelligence, and
blockchain are rapidly evolving and being deeply integrated with vertical industries, giving rise to diverse
application scenarios. The deployment of cybersecurity capabilities is also speeding up within increasingly
robust ecosystems. In terms of the integration of digital technology and the real economy, traditional
industries are constantly being transformed and upgraded, as exemplified by industrial sectors where
digital technology has been adopted at a broader scale. The development and productivity of the digital
economy in Asia have been enhanced by e-commerce and mobile payment, and the healthcare sector
has been revolutionized by digital technology. In terms of digital governance, we see a digitizing trend in
government services, a quickening pace to build smart cities, closer coordination and collaboration among
countries, and preliminary results in innovative attempts. In terms of innovation and entrepreneurship
in the digital economy, Asia has become a crucial component of the global innovation ecosystem. In
Asia, the number and quality of unicorn companies are rising, and improving digital literacy has become an
important lever for enhancing the soft power of the region’s digital economy.
Estimates show that there has been steady progress in Asia’s digital economy despite
economic headwinds.In 2022, the digital economy of the selected 14 Asian countries was estimated to
have reached USD 12.8 trillion, a nominal increase of3.5%year-on-year, accounting for38.5%of GDP.
Industrial digitization is the main powerhouse behind Asia’s digital economy, accounting for80.6%of the
total.The tertiary sector leads the way in going digital, and the digital economy accounted for8.3%,23.1%,
and39.2%of the value added of the primary, secondary, and tertiary sectors, respectively.
Executive Summary
Ⅴ
Here are some notes to the publication.
1. The number of countries covered in the analysis of this report
（1）Unless otherwise specified, the report covers all the 47 countries in Asia1, namely Afghanistan,
Armenia, Azerbaijan, Bahrain, Bangladesh, Bhutan, Brunei, Cambodia, China, Georgia, India, Indonesia,
Iran, Iraq, Israel, Japan, Jordan, Kazakhstan, Kuwait, Kyrgyzstan, Laos, Lebanon, Malaysia, Maldives,
Mongolia, Myanmar, Nepal, the Democratic People’s Republic of Korea, Oman, Pakistan, Palestine, the
Philippines, Qatar, Saudi Arabia, Singapore, South Korea, Sri Lanka, Syria, Tajikistan, Thailand, Timor-
Leste, Turkey, Turkmenistan, United Arab Emirates, Uzbekistan, Vietnam, and Yemen.
（2）Certain statistics target a specific group of Asian countries and regions. In the section on
Asia’s e-commerce development, for example, the penetration rate of e-commerce in Asia is calculated
based on data from 37 countries in Asia, including Armenia, Azerbaijan, Bahrain, Bangladesh, Bhutan,
Brunei, Cambodia, China, Georgia, India, Indonesia, Iran, Iraq, Israel, Japan, Jordan, Kazakhstan, Kuwait,
Kyrgyzstan, Lebanon, Malaysia, Mongolia, Myanmar, Nepal, Oman, Pakistan, the Philippines, Qatar, Saudi
Arabia, Singapore, Sri Lanka, Tajikistan, Thailand, Timor-Leste, Turkmenistan, United Arab Emirates, and
Uzbekistan.
（3）Due to the restricted data accessibility, the first chapter “Development of the digital economy in
Asia” is based on the data from 14 selected countries, including South Korea, Malaysia, Japan, Thailand,
Turkey, Singapore, India, Indonesia, Vietnam, China, the Philippines, Saudi Arabia, Israel, and Laos.
（4）The report also examines Asia-focused regional cooperation organizations and mechanisms that
covering certain Asian countries and beyond.
2. Classification of countries
In line with the UN Classification of SDG Regions and Income Groups1, Asian countries fall into five
sub-regions: Central Asia, Eastern Asia, Western Asia, Southern Asia, and South-Eastern Asia. Specifically,
these countries are listed as follows:
Central Asia (5 countries): Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan.
Eastern Asia (5 countries): China, the Democratic People's Republic of Korea, Japan, Mongolia, and
1 46 countries are listed at http://cs.mfa.gov.cn/zggmcg/ljmdd/yz_645708/. When China is included, the number of Asian
countries is 47.
2 The United Nations website: https://population.un.org/ProfilesOfAgeing2019/Docs/Annex%202%20-%20
Classification%20of%20countries%20by%20region_updated%20for%20WPP%202019.pdf
Notes
Ⅵ
South Korea.
Western Asia (18 countries): Armenia, Azerbaijan, Bahrain, Cyprus, Georgia, Iraq, Israel, Jordan,
Kuwait, Lebanon, Oman, Qatar, Saudi Arabia, Palestine, Syria, Turkey, United Arab Emirates, and Yemen.
Southern Asia (9 countries): Afghanistan, Bangladesh, Bhutan, India, Iran, Maldives, Nepal, Pakistan,
and Sri Lanka.
South-Eastern Asia (11 countries): Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the
Philippines, Singapore, Thailand, Timor-Leste, and Vietnam.
3. Time horizon of data used in the report
Chapter 1 (Development of digital economy in Asia) is based on the data of Asian countries in 2022.
Chapter 2 (Digital economy policies in Asia) covers all the relevant strategies and policies of these
countries from their launch of digital economy planning to the completion of this report (October 2023).
Chapter 3 (Key developments in Asia’s digital economy) is analyzed using the most recent data.
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Table of Contents
1. Development of digital economy in Asia 2
1.1 Digital economy as a key source of growth for Asia 2
1.2 Fast growth of digital economy in major Asian countries 3
2. Digital economy policies in Asia 4
2.1 Policy focus of Asian countries for the digital economy 4
2.2 Digital economy measures within Asian regional cooperation frameworks 11
3. Key developments in Asia’s digital economy 16
3.1 Improved deployment of digital economy infrastructure 16
3.2 Great potential from digital technology and industrial empowerment 20
3.3 Accelerated integration of digital technology into the real economy 28
3.4 Efficient and streamlined governance systems enabled by digital tools 35
3.5 Increasingly matured innovation and entrepreneurship ecosystem 39
4. Outlook on the digital economy in Asia 43
4.1 Multiple challenges to be addressed 43
4.2 Joint efforts for shared benefits of digital economy 44
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List of Figures
Figure 1 Framework of “Four Orientations” in Digital Economy 1
Figure 2 Key Facts of Digital Economy in 14 Selected Asian Economies, 2022 3
Figure 3 Size of Digital Economy in 14 Selected Asian Economies, 2022 3
Figure 4 Fixed Broadband Speeds in Asian Countries, June 2023 17
Figure 5 Mobile Internet Connections in Asia, 2013-2023 18
Figure 6 Generational Replacement of Mobile Connectivity in Asia 18
Figure 7 Mobile Connectivity in Asia 19
Figure 8 Global Distribution of Cloud Computing 19
Figure 9 Global Share of Top 10 Firms’ Valid Patent Families, by country 21
Figure 10 Global Distribution of AI Businesses, by country 22
Figure 11 Revenue in Asian Cybersecurity Market (in billion dollars) 25
Figure 12 Revenue and Growth Rate of Cyber Solutions and Security Services 25
Figure 13 Cybersecurity Scores of Asian Countries 26
Figure 14 Global Share of Asian Blockchain Companies 27
Figure 15 Annual Installations of Industrial Robots, by continent 30
Figure 16 E-commerce Revenue by segment in Asia 30
Figure 17 Penetration of E-commerce Users in Asia (%) in 2022 30
Figure 18 E-commerce Payment Methods in Asia 32
Figure 19 Number of Subscribers of Emerging Health Platforms in Asia 33
Figure 20 Market Size of Digital Healthcare in Different Categories in Asia 35
Figure 21 E-government Scores of Asian Countries 35
Figure 22 Internal Scoring of Smart Cities in Kazakhstan 38
Figure 23 Distribution of Top 100 Technology Clusters in Major Countries 39
Figure 24 Global Innovation Index Scores of Asian Countries 41
Figure 25 Number of Asian Companies in Hurun Global Unicorn Index 2023 42
Figure 26 Number of Asian New Unicorns in 2023 42
Ⅹ
List of Tables
Table 1 Patents by WIPO Technology Field/by Region, 2020 40
Asia Digital Economy Report
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The digital economy utilizes digital knowledge
and information as the key production factors and
is primarily driven by digital technology. Through
modern information networks, the digital economy
continuously improves the digitization, connectivity,
and intelligence of the economy and society by
deeply embedding digital technology into the real
economy, thereby creating a new form of economy
characterized by new growth and governance
models. Specifically, it includes four major
components:
The first is digital industrialization. It refers
to the information and communication industry,
which is the leading industry for the development
of the digital economy. It provides technologies,
products, services, and solutions for the
development of the digital economy. Specifically,
it covers sectors such as electronic information
manufacturing, telecommunications, software and
information technology services, and the Internet.
Digital industrialization includes but is not limited to
technologies, products, and services such as 5G,
integrated circuits, software, artificial intelligence,
big data, cloud computing, and blockchain.
The second is industrial digitization, which
is the primary arena for the development of the
digital economy. Industrial digitization is a process
of traditional industries utilizing digital technology,
products, or services to boost production and
efficiency, resulting in additional output constituting
an important part of the digital economy. It includes
but is not limited to new integrated industries
and new business models, such as the industrial
Internet, the combination of informatization and
industrialization, intelligent manufacturing, the
Internet of vehicles, and the platform economy.
The third is digital governance, which
is an important component of promoting the
modernization of national governance systems
and governance capacity. It is a new governance
model that uses digital technology to establish an
institutional system for improving administrative
management, innovating service and regulation
methods, optimizing public service provision,
and enhancing systems for administrative
decision-making, execution, organization, and
supervision. Digital governance includes innovation
in governance models and the use of digital
technology to improve governance systems and
strengthen comprehensive governance capabilities.
The fourth is data valuelization. Valuable data
is a key factor of production for the development
of the digital economy, and accelerating the
value creation of data is an essential requirement
for growing the digital economy. Such value
generation activities include but are not limited to
data collection, data standards development, the
attribution of data ownership, data annotation,
data pricing, data trading, data circulation, data
protection, and data governance.
Source: CAICT
Figure 1 Framework of “Four Orientations” in Digital Economy
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1. Development of digital economy
in Asia
Today’s world is undergoing historic changes
unseen in a century and unfolding in unprecedented
ways. The world economy still lacks momentum
for recovery. At the same time, the growth of the
digital economy remains strong and has become an
important contributor to the economic recovery of
various countries. In view of the availability of data,
this section focuses on the quantitative analysis of
digital economy development in 14 economies3,
including China, South Korea, Singapore, Japan,
and India, to present its trends and state in major
Asian economies.
1.1 Digital economy as a key source of growth
for Asia
In terms of overall scale, the digital economy
in Asia continues to expand. Major countries have
chosen the digital economy as an important lever to
mitigate the impact of the COVID-19 pandemic and
stimulate economic growth. They have accelerated
the development of information infrastructure
and sectors such as semiconductors, artificial
intelligence, e-commerce, and e-government,
leading to a new boom in the digital economy.It is
estimated that in 2022, the digital economy of the
14 Asian countries was worth USD 12.8 trillion,
an increase of USD 0.43 trillion from the previous
year. This means that the digital economy remains
vibrant.
In terms of its share of GDP, the digital
economy has played a significant role in supporting
global economic development. Due to the profound
impacts of the pandemic, traditional modes of
production and operation are being transformed on
a global scale. Information infrastructure, intelligent
production lines, intelligent robots, and data are
gradually becoming important sources of growth,
effectively supporting the sustained and stable
development of the economy.In 2022, the digital
economy accounted for 38.5% of the combined
GDP of the 14 Asian economies, with an increase of
1.3 percentage points year-on-year, and its share of
the national economy has been expanding steadily.
In terms of growth rate, the digital economy
has become a source of vitality for Asian economic
growth. With its constantly emerging new business
models and high level of innovativeness, the digital
economy continues to inject power into the steady
recovery of the global economy.In 2022, the digital
economy of the 14 Asian economies expanded by
3.5% year-on-year in nominal terms, which was
3.3 percentage points higher than the nominal
GDP growth rate in the same period, effectively
promoting the sustained recovery of the world
economy.
In terms of structure, industrial digitization
has become the dominant force driving the
development of the digital economy in Asia. Digital
technology is accelerating its penetration into
traditional industries. In 2022, the combined digital
industrialization market of the 14 economies in
Asia was USD 2.5 trillion, accounting for 19.4% of
their digital economy and 7.5% of their GDP.The
scale of industrial digitization was USD 10.3 trillion,
accounting for 80.6% of the digital economy, with
its share of GDP rising by 1.1 percentage points
from the previous year to approximately 31.0%.
In terms of sector penetration, the digital
economy continues to penetrate the three major
sectors. Due to sectoral attributes and other
factors, the use of digital technology in traditional
industries has first surged in the tertiary sector,
which has been obviously transformed. The
potential for digitization is yet to be fully released
in the secondary sector, and this process remains
relatively slow in the primary sector.In 2022, the
3 The 14 countries include South Korea, Malaysia, Japan,
Thailand, Turkey, Singapore, India, Indonesia, Vietnam,
China, the Philippines, Saudi Arabia, Israel, and Laos.
Asia Digital Economy Report
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value added of the digital economy in the 14 Asian
economies respectively accounted for 39.2%,
23.1%, and 8.3% of their tertiary, secondary, and
primary sector’s total.
Source: CAICT
Figure 2 Key Facts of Digital Economy in 14 Selected
Asian Economies, 2022
1.2 Fast growth of the digital economy in major
Asian countries
Major Asian countries are speeding up the
development of the digital economy and have
achieved substantial results. Specifically:
In terms of scale, China is far ahead in the
digital economy, valued at USD 7.47 trillion in
2022. Japan ranked second with USD 2.37 trillion,
followed by South Korea at USD 952.3 billion. The
digital economy in India, Saudi Arabia, Singapore,
Indonesia, Israel, and Malaysia all exceeded USD
100 billion.
In terms of its share of GDP, the digital
economy in South Korea and Japan accounts for
over 50% of GDP, at 57.2% and 56.0% respectively.
Countries such as Singapore and China also have a
digital economy whose share of GDP is higher than
the average level of the 14 countries.
In terms of growth rate, Asia’s overall
economic performance stood out in 2022, with the
region’s economic growth rate significantly higher
than the global average and developed economies
in Europe and the United States. Particularly,
emerging economies in Asia grew at a faster pace,
demonstrating strong economic resilience and
development potential. In 2022, Saudi Arabia had
the highest year-on-year growth rate with its digital
economy, reaching 29.3% and ranking first in Asia.
Singapore, Indonesia, Vietnam, Turkey, Malaysia,
Israel, and China all experienced more than 10%
growth in the digital economy.
In terms of sector penetration, developed
countries, as early movers in digital transition,
possess stronger capabilities in technology
application and have achieved significant results in
this field. In the digital transformation of the primary
sector, Saudi Arabia has the highest penetration rate
in Asia at 19.0%. Countries such as South Korea,
Japan, Singapore, and China also have higher
penetration rates in the primary sector compared to
the average level of the 14 countries. South Korea’s
secondary sector has a digital penetration rate of
more than 40%. Moreover, Japan, Singapore, and
China also have higher penetration levels in the
secondary sector compared to the average rate
of the 14 countries. In terms of digitization in the
tertiary sector, both Japan and China are far ahead,
with a penetration rate of over 40% in the tertiary
sector.
Source: CAICT
Figure 3 Size of Digital Economy in 14 Selected
Asian Countries, 2022
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2. Digital economy policies in Asia
As digitization is accelerating worldwide, the
digital economy has emerged as a crucial driver
of economic development and a key strategic
foundation for the new wave of technological
revolution in various countries. Asian economies
highly prioritize the development of the digital
economy by expediting the introduction of
policies and strategies and promoting regional
collaboration in this domain. They have established
a digital economy policy framework that is being
continuously enhanced.
2.1 Policy focus of Asian countries for the digital
economy
2.1.1 Rapidly transformed system and
mechanism and continuously improved top-
level design for the digital economy
The digital economy is being promoted in
Asia through strengthened top-level design,
enhanced planning systems, and coordinated
efforts. China’s top-level strategic planning
system for the digital economy is becoming
increasingly robust. It has successively released
the 14th Five-Year Plan for National Economic
and Social Development and Long-Term Goals for
2035, the 14th Five-Year Plan for Digital Economy
Development and the Comprehensive Plan for
Building a Digital China. These official documents
have provided further clarity on the guiding
ideologies, fundamental principles, development
objectives, high priorities, and support measures
for the healthy growth of the digital economy.
Together, they form the top-level design framework
for China’s digital economy development. South
Korea has announced the Korean New Deal
and is continuously investing in a comprehensive
digital transformation of its economy and society.
This initiative aims to help expand the “data,
network, and artificial intelligence” ecosystem in
the country. Indonesia is also accelerating the
digital transformation of its economy, including
education, finance, transportation, and healthcare.
In 2021, Indonesia released its digital roadmap for
2021-2024, which includes six strategic directions
and ten key areas. This roadmap encompasses
at least 100 measures, covering digital tourism,
digital trade, digital finance, digital media and
entertainment, digital agriculture and fisheries,
digital cities, digital education, digital healthcare,
industrial digitization, and digital government. The
objective is to achieve inclusive development in
the digital economy. Bangladesh has adopted a
similar national strategy called Digital Bangladesh
2021, which outlines the scope and fundamental
direction for achieving a “Digital Bangladesh”. The
country aims to harness the transformative power
of information and communication technology
to drive economic development and become a
middle-income country by 2021. Kazakhstan has
instituted a national program, Digital Kazakhstan,
which includes the digital transformation of
industrial sectors and power supply, transportation
and logistics, agriculture, commerce, and
government. Oman has unveiled the Digital Oman
Strategy 2030 to lay the groundwork for its ongoing
digital transformation and the Fourth Industrial
Revolution. The strategy strongly emphasizes on
leveraging emerging technologies like artificial
intelligence, blockchain, and big data to enhance
productivity and stimulate economic growth. Sri
Lanka has issued the National Digital Policy for
Sri Lanka (2020-2025), which provides a specific
development path and policy framework for the
country’s digital transition. The policy includes
measures to build a robust digital and network
infrastructure, create a smart society, ensure data
protection and information security, and implement
policies for sustainable development, with an
aim to promote economic growth and enhance
government efficiency. Kyrgyzstan has adopted
the Digital Kyrgyzstan 2019-2023 program and
introduced an implementation roadmap. The
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country aims to fast-track its digital transformation
and socio-economic development by developing
digital skills, improving regulatory frameworks,
expanding digital infrastructure and platforms,
building a digital nation, and promoting the
growth of the digital economy and management
systems. Lebanon has established a digital
transformation plan and launched the Lebanon
Digital Transformation Strategy 2020-2030, which
includes 80 construction projects with a USD 6
billion investment. Laos has introduced the National
Digital Economy Development Vision 2021-2040,
the National Digital Economy Strategy 2021-2030,
and the National Digital Economy Development
Plan 2021-2025. Myanmar has announced a digital
economy roadmap, prioritizing the development
of nine sectors: education, healthcare, agriculture,
fisheries and livestock, tourism and hospitality,
manufacturing and small and medium-sized
enterprises (SMEs), financial services, technology
and startup ecosystems, digital trade, and
transportation and logistics.
To support the expansion of the digital
economy, institutional frameworks and
mechanisms have been created and obstacles
to strategy implementation have been
gradually removed. On one hand, countries are
accelerating the establishment of specialized
agencies for the digital economy. For instance,
in March 2023, China proposed the creation of
the National Data Bureau, which is responsible
for coordinating the development of data policies;
the integration, sharing, development, and
utilization of data resources; and the planning
and implementation of initiatives like Digital China,
the digital economy, and the digital society. The
bureau was officially launched in October 2023.
Similarly, in September 2021, Japan established
the Digital Agency to speed up society’s digital
transformation. Myanmar has established the
Digital Economy Development Committee (DEDC)
to advance digital transformation nationwide. The
committee aims to encourage and revolutionize
digital governance and trade, and advance the
growth of the digital economy across all sectors, to
promote inclusive and sustainable economic and
social development. Jordan has established the
Ministry of Digital Economy and Entrepreneurship,
which is responsible for formulating policies
to support the digital transformation of the
economy. The ministry focuses on areas such
as digital entrepreneurship, digital skills, digital
financial services, digital infrastructure, and digital
platforms. Additionally, the ministry collaborates
with other government agencies to develop plans
and provide support in various aspects, including
market access, funding, regulatory challenges,
and talent cultivation. Moreover, countries such as
Thailand and Lebanon have established dedicated
government departments to promote digitization.
Meanwhile, cross-departmental and cross-
industry coordination mechanisms have begun to
emerge. China has established an inter-ministerial
joint meeting system for the digital economy, which
deals with matters involving multiple departments
under the State Council. The member departments
of the system maintain regular communication, align
their different views, and work together according
to agreed-upon work procedures to ensure the
smooth implementation of specific tasks. This
joint meeting system is responsible for advancing
the implementation of digital economy strategies,
coordinating development efforts, formulating
institutional mechanisms, standards, and regulations
on the digital economy, overseeing major digital
projects as well as pilot and demonstration projects,
and completing other relevant tasks.
2.1.2 Strong emphasis on information
infrastructure to empower a connected world
Information infrastructure is the foundation of
the digital economy. Major Asian economies are
rapidly constructing and expanding 5G, optical
fibers, and other infrastructure, primarily focusing on
widening network coverage and upgrading network
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infrastructure.
Countries with a well-developed internet
infrastructure are accelerating the development
and upgrading of networks, particularly 5G
networks. China has been deploying next-
generation communication networks on a large
scale. Its 14th Five-Year Plan sets a target of raising
the 5G penetration rate to 56%. The Action Plan
for Coordinated Development of ‘Dual-Gigabit’
Networks (2021-2023) aims to establish “dual-
gigabit” networks that will cover all cities, and
towns equipped with necessary conditions. In
its 14th Five-Year Plan for the Development of
Information and Communication Industries and
14th Five-Year Plan for the Development of the
Digital Economy, China has established targets
to extend 5G network coverage, deploy gigabit
fiber-optic networks nationwide, and enhance
the capacity and service of backbone networks.
The Comprehensive Plan for Building a Digital
China has clearly stated that by accelerating the
coordinated development of 5G networks and
gigabit fiber-optic networks, China will promote
the widespread deployment and adoption of IPv6
and empower the digital economy with a robust
digital infrastructure. South Korea has been one
of the early adopters of 5G as a national strategy,
with strategic measures and plans developed as
early as 2013. To drive the development of 5G,
the South Korea government has taken a strong
lead in coordinating the three major domestic
telecom operators and stakeholders to conduct
5G application trials. Japan has issued the Master
Plan 2.0 on the Regional Development of ICT
Infrastructure and allocated funds to accelerate the
roll-out of 5G and fiber-optic networks. The country
aims to increase the number of 5G base stations
to 210,000 by the end of 2023. In June 2022,
Japan unveiled the Vision for a Digital Garden City
Nation, which aims to provide 99.9% of households
with fiber optic coverage capable of high-speed
internet communication by the end of 2027, and to
increase 5G coverage to 99% of the population by
the end of 2030. Vietnam introduced the National
Digital Transformation Program Through 2025, With
Orientations Toward 2030 in 2020, emphasizing
the construction and development of broadband
infrastructure, upgrading 4G networks, deploying
5G networks, and expanding domestic internet
connectivity. By 2025, its fiber-optic network
infrastructure is estimated to cover over 80% of
households and 100% of communities nationwide.
Expanding network coverage to the entire
population remains the foremost priority for most
countries at their current stage of development.
Saudi Arabia has developed the Saudi Vision
2030, which aims to develop telecommunications
and IT infrastructure and expand its coverage and
capacity within and around cities. The country has
set a specific goal of exceeding 90% coverage in
densely populated cities and 66% coverage in other
urban zones. Uzbekistan has released the Digital
Uzbekistan 2030 Strategy, which includes targets
to increase broadband access ports by 2.5 million,
lay 20,000 kilometers of fiber-optic cables, develop
mobile networks, and raise the home internet
access rate from 78% to 95% between 2020 and
2022. Kazakhstan has also introduced a national
program called Digital Kazakhstan, which aims to
expand communication network coverage and
infrastructure. Qatar has launched the National ICT
Plan 2015, with an investment of USD 550 million
to roll-out a nationwide high-speed broadband
Fiber-to-the-Home (FTTH) network, targeting 95%
coverage for households.
2.1.3 Accelerating smart city development and
establishing smart, efficient city management
systems
Asian countries are speeding up the
development of smart transport and improving
transport connectivity. Singapore has implemented
the Smart Nation 2025 initiative, which aims
to build infrastructure and operating systems
that cover the entire island for data collection,
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connection, and analysis. With such infrastructure
and systems, Singapore can predict traffic
congestion in advance, observe environmental
cleanliness using cameras, offer short-range
transportation services through self-driving vehicles,
and provide better public services based on
forecasted citizen needs. In 2022, South Korea
introduced the Digital New Deal, allocating KRW1.8
trillion (approximately USD 1.5 billion) for social
infrastructure development, focusing on road
infrastructure supporting autonomous driving.
China has also released several plans, including the
Outline for Building China’s Strength in Transport,
the Five-Year Action Plan for Accelerating the
Building of China’s Strength in Transport (2023-
2027), and the Opinions on Promoting the Digital
Transformation of Highways and Accelerating
the Development of Smart Highways. All these
plans are intended to promote the full-cycle digital
transformation of highways, including construction,
maintenance, and operations, and to facilitate the
deep integration of highway transport with value
and supply chains. Moreover, they are designed to
boost the development of the digital economy in
the highway sector as a safeguard for improving
China’s prowess in transport, technology, and digital
transformation.
Asian countries are fast-tracking the
construction of a comprehensive and strategic
system for smart city development. In 2020,
Japan passed the Act to Amend the National
Strategic Special Zone Act to boost smart city
development and enable services such as self-
driving, drone delivery, cashless payment, and
telemedicine. South Korea’s Digital New Deal
will allocate KRW 500 billion (approximately USD
420 million) for remote learning and intelligent
healthcare systems investments. China’s 14th
Five-Year Plan has outlined a tiered and classified
approach to smart city development. China will
enhance urban information models and platforms,
as well as operations management and service
platforms, while also experimenting with digital
twin cities. Thailand has established the National
Steering Committee on Smart City Development
and the Digital Economy Promotion Agency
(DEPA), with the goal of building 100 smart
cities within 20 years. In March 2022, the Thai
government approved a smart city project in the
Eastern Economic Corridor (EEC), which covers an
area of 15,000 rai and is expected to have a total
investment of over 1.34 trillion baht over ten years.
Vietnam has also released a general plan for
smart city development. According to the plan, by
2025, Vietnam will carry out the first phase of the
pilot implementation of smart city development,
complete the establishment of a legal framework,
and develop national standards prioritized for
building smart cities, including urban lighting,
transport, water supply and drainage, sewage
treatment, disaster risk warning systems, and ICT
infrastructure. By 2030, Vietnam will complete the
first phase of the pilot project, forming a smart
city network composed of smart city chains in the
northern, central, southern, and Mekong Delta
regions, with Hanoi, Ho Chi Minh City, Da Nang,
and Can Tho as the core respectively.
2.1.4 Enhancing innovation and research
measures to propel the development of the
digital technology industry
Countries leading in digital economy are
accelerating comprehensive measures in
digital technology development. South Korea
has introduced official documents such as the
Information and Communication Technology
(ICT) Standardization Strategy 2022, National
Directions and Standards for R&D Investment
2023 (Draft), Economic Policy Directions of the
New Government, Basic Plan for the Development
of National Advanced Strategic Industries, and
National High-Tech Strategic Industries Special
Act. All these policy documents aim to promote
investment in digital technology and create an
enabling environment by strengthening policy
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support and formulating relevant strategies. Israel
passed the Encouragement of Industrial Research
and Development Law (the “R&D Law”) in 1984,
providing guiding and principles-based legislation
and detailed and highly practical action plans for
technological R&D and innovation. In addition,
Israel has an incentive program called Gov-Tech,
which aims to encourage and assist companies
and non-governmental organizations in providing
innovative technology solutions for public sectors
such as education, health, welfare, economy,
law, local government, and human capital. Other
Asian countries have also recognized the
importance of the digital technology industry
and are accelerating their measures. The United
Arab Emirates has launched the Fourth Industrial
Revolution Strategy to promote innovation and R&D
in futuristic technology as a greater contributor to
economic growth.Oman has released the Digital
Oman Strategy 2030, which focuses on emerging
technologies such as artificial intelligence (AI),
blockchain, big data, smart city, robotics, the
Internet of Things, and virtual reality.
When it comes to specific fields,
R&D and innovation in 6G and future
networks are accelerating. Japan has established
a special fund of JPY 66.2 billion (approximately
USD 450 million) this year to support research
on 6G wireless networks. In March of this year,
India unveiled a vision document for 6G, which
focuses on standardization and determining the
spectrum suitable for 6G and creating an industrial
ecosystem for devices and systems. Its main
goal is to identify and provide funding support for
domestic 6G technology research projects, with an
aim to launch 6G before 2030. In July of this year,
India established the Bharat 6G Alliance (B6GA),
a collaborative platform composed of public and
private companies, academia, research institutions,
and standard development organizations. The
primary objective of B6GA is to understand
the business and societal needs of 6G beyond
technology requirements, foster consensus on
these needs, and promote high-impact open R&D
initiatives.
Semiconductors have become a focal point of
competition between Asia and the rest of the world.
In 2022, South Korea increased its investment
in chip-related industrial parks and established
administrative agencies to support these
initiatives. In July of the same year, it announced
the Superpower Semiconductor Strategy,
which provides tax incentives for investment
in semiconductor R&D and equipment, and
financial support for infrastructure construction in
semiconductor parks. In May 2023, South Korea
released the Future Semiconductor Technology
Roadmap, announcing the government’s intention
to maintain the “super gap” in the semiconductor
storage and wafer contract manufacturing industry
over the next 10 years, as well as the “new gap”
in the system semiconductor field.The country
has also established a public-private partnership
consulting agency for future semiconductor
technology. Japan has issued the Announcement
Regarding Efforts Toward the Establishment
of Design and Manufacturing Bases for Next-
Generation Semiconductors and revised the
Strategy for Semiconductors and the Digital
Industry.Japan aims to build manufacturing bases
by strengthening the production infrastructure
of IoT and semiconductors, deepen Japan-
US cooperation to access next-generation
semiconductor technology, expand global
cooperation to facilitate the realization of leading
technologies such as photoelectronic chip
technology, and further strengthen Japan’s
capabilities in cutting-edge semiconductor
development and production to revitalize its
semiconductor industry. In 2021, India announced
a USD 10 billion incentive program for the chip
industry, which will extend fiscal support of up
to 50% of a project’s cost to eligible display and
semiconductor fabricators that set up manufacturing
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facilities in India.In 2022, India unveiled another
plan to bolster its chip manufacturing, which
is expected to solicit at least USD 25 billion of
investments.
Cutting-edge technologies such as AI,
metaverse, and quantum computing are deployed
at a faster pace. China has issued several policy
documents, including the OpinionsConcerning
Stimulating theDevelopmentofCloud Computing
Innovationand FosteringNew BusinessModels
in theInformation Industry, Circular of the State
Council on the Action Outline for Promoting the
Big Data Development, Next Generation Artificial
Intelligence Development Plan, Plan for Metrological
Development (2021-2035), 14th Five-Year Plan
for Developing the Big Data Industry, and Three-
Year Action Plan for the Innovative Development
of the Metaverse Industry (2023-2025). Through
enhanced top-level design, planning, and guidance,
China seeks to coordinate the establishment of
relevant systems—including the R&D of critical
technologies, standards development, and security
protection—while aligning the development of
networks, application scale-up, service innovation,
and industrial support. South Korea has released
a roadmap for the development of the metaverse
industry, which aims to identify and support new
metaverse platforms that are different from the
existing ones, establish a metaverse academy to
train 40,000 local experts, support high-potential
companies, create a metaverse fund, and operate
a metaverse social innovation center. The United
Arab Emirates launched the Emirates Blockchain
Strategy 2021 in 2018, which has four strategic
pillars: improving citizen and resident happiness,
enhancing government efficiency, advancing
legislation, and promoting international leadership.
In 2019, it released the National Strategy for Artificial
Intelligence 2031, which aims to embed AI in key
areas such as education and government services,
and enhance AI governance and regulations. Saudi
Arabia also released the National Strategy for Data
and Artificial Intelligence in 2020, which covers
a variety of aspects such as skill development,
policies and regulations, investment, research
and innovation, and ecosystems. The country
is leveraging data and AI technologies to boost
its economic growth. Bahrain is implementing a
“cloud-first” approach to improve its economic
efficiency and quality by adopting modern
information technology.
2.1.5 Accelerating digital transformation, with a
focus on manufacturing and SMEs
The digital transformation of manufacturing
has become an important lever for stimulating
economic recovery. In 2021, Singapore launched
the Manufacturing 2030 Vision to promote the
transformation of traditional manufacturing to
advanced manufacturing through investment
in infrastructure, establishment of ecosystems,
and other measures. In July 2022, South Korea
passed the Special Act to Accelerate Industrial
Digital Transformation. This Act is meaningful in
that it incorporates the utilization and protection
principles concerning industrial data, rationale for
comprehensive governmental support, and inter-
ministerial collaboration mechanism. It also lays
the legal grounds for pursuing industrial digital
transformation. Vietnam released the National
Strategy on the Fourth Industrial Revolution towards
the Year 2030, which states that Vietnam will
leverage opportunities from this wave of revolution
to master various advanced technologies, and
apply them widely in various sectors of economy
and society. By 2030, the country aims to create
100,000 digital economy enterprises, with a total
of 1.5 million digital technology workers. By then,
Vietnam will boast a digital economy that will
account for 30% of its GDP, and rank among the
top two in ASEAN and among the top 70 in the
world, entering the front ranks of advanced digital
countries.
The policies for supporting the digital
transformation of small and medium-sized
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enterprises (SMEs) are being strengthened,
updated, and upgraded. South Korea
announced at the end of 2021 that it would
implement a “non-face-to-face service voucher”
project with a total budget of KRW 41 billion
(approximately USD 34.55 million) in 2022 to
promote the digital transformation of SMEs.
Through this project, South Korea provided video
conferencing, remote office (collaboration tools),
network, and security solutions for 15,000 SMEs.
In 2019, the Japanese government introduced
the Digital New Deal to enhance digital capabilities
among SMEs. In 2020, it formulated the Action
Plan of the Growth Strategy, which included
significant actions such as promoting mergers
and acquisitions among SMEs, expanding their
business size, and improving their productivity.
China continues to prioritize the development
of SMEs. In 2008, it issued the Circular on the
Opinions on Strengthening Services to Promote the
Informatization of SMEs to encourage investment
in digital technology among SMEs through public
and social services. In March 2020, it released the
Special Action Plan for Empowering the Digital
Transformation of SMEs, which helped SMEs
resume their business operations with digital,
network and AI technologies. In April 2020, China
announced another implementation plan for
developing the digital economy, which aims to
accelerate the adoption of cloud, digital, and AI
technologies, particularly digital transformation
among SMEs and micro businesses. In May 2020,
China unveiled the Action for Digital Transformation
Partnership initiative as a step to establish
guidelines for the digital transformation of SMEs.
2.1.6 Improving legal and regulatory systems to
strengthen data protection and cybersecurity
Asian countries place considerable emphasis
on data security and cybersecurity. They
have introduced or amended relevant laws,
regulations, strategies, and plans to enhance
protection in these two fields.
Enacting relevant laws has become an
important means to safeguard data security.
Singapore’s amendments to the Personal Data
Protection Act have strengthened the country’s data
privacy regime. Under the revised law, organizations
are allowed to use data in more circumstances
without prior consent, but data breaches will result
in more severe penalties. South Korea has passed
amendments to the Personal Information Protection
Act, which further protects citizens’ data rights by
introducing rights and flexible rules. In November
2021, South Korea announced a strategy for
developing core data protection technology,
intended to promote data utilization and translate
data into a digital economy driver by accessing
and mastering data protection technology. Japan
has made its third round of amendments to the
Act on the Protection of Personal Information.
These amendments include the harmonization of
scattered legislation, the consolidation of personal
data protection rules in the medical and academic
fields, the unification of the definition of personal
information among national, private sector, and
local entities, as well as the clarification of rules
on the handling of anonymized information by
administrative agencies. India has introduced the
Digital Personal Data Protection Act of 2023 to
ensure the comprehensive protection of personal
data privacy and security. The act will strengthen
data regulation and promote compliance in data
processing. Thailand’s Personal Data Protection
Act has also come into effect. It covers various
aspects, such as data ownership, data processor
obligations, cross-border data transfers, and
penalties for the abusive use of personal data. It
is the first comprehensive law on data protection
in Thailand. China has introduced the Data
Security Law to establish fundamental systems
for data protection. The law has enhanced rules
for data classification and ranking, protection of
important data, cross-border data flows, and data
transactions.
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The synergy between laws and strategies
is being enhanced to strengthen cybersecurity
protection. Through the enactment of the
Cybersecurity Act 2018, Singapore aims to
establish a regulatory framework for owners of
critical information infrastructure, a mechanism for
sharing cybersecurity information, response and
prevention mechanisms for cybersecurity incidents,
and a licensing framework for cybersecurity
services, for the purpose of facilitating the country’s
comprehensive cybersecurity strategy. In July
of this year, Singapore introduced the Online
Criminal Harms Bill, which focuses on addressing
online criminal activities that jeopardize national
security and threaten personal safety, including
illegal gambling and lending, frauds, incitement
of violence, and disruption of national unity. The
legislation aims to intensify the regulation of online
content, thus fostering a more secure online
environment for its citizens. South Korea has
successively introduced the National Cybersecurity
Strategy and National Cybersecurity Basic Plan to
mitigate national cybersecurity risks arising from the
development of a 5G hyper-connected society and
bolster a collaborative civil-military response system.
Japan has released several strategic documents,
including a comprehensive three-year cybersecurity
strategy, National Security Strategy (Revised),
National Defense Strategy, and Defense Buildup
Plan, with a clear focus on fortifying cybersecurity
defense. Japan has adopted the concept of “active
cyber defense” along with necessary measures
for implementing the concept, emphasizing the
role of the Self-Defense Forces in supporting the
enhancement of Japan’s national cybersecurity
capabilities. India has issued the National
Cybersecurity Strategy, which has three strategic
pillars of “secure”, “strengthen” and “synergize”,
supported by detailed policy measures. The strategy
underscores the significance of international
cooperation in the realm of cybersecurity. China
has successively implemented a series of laws
and regulations, including the Cybersecurity Law,
Security Review Measures, and Measures for the
Security Assessment of Cloud Computing Services.
These documents have created a robust legal
and regulatory system for cybersecurity review,
certification of cybersecurity services, and security
assessment of cloud computing services. With
the formulation and release of over 300 national
standards in the field of cybersecurity, China has
essentially erected a foundational structure for its
cybersecurity policies and regulations.
2.2 Digital economy measures within Asian
regional cooperation frameworks
2.2.1 Asia-Pacific Economic Cooperation
The Asia-Pacific Economic Cooperation (APEC)
is the most inclusive, representative, and high-
level cooperative mechanism in the Asia-Pacific
region. This region is also globally recognized as
the most dynamic and promising economic bloc.
Currently, the Asia-Pacific region has emerged as
the most vibrant and fertile ground for the digital
economy. Leading in areas such as data flow, digital
technology, and digital markets, the Asia-Pacific
has already transformed the digital economy into an
important source of economic growth.
APEC places its primary focus on fostering
exchanges on digital economy and bridging
the digital divide among its members. On
one hand, it has been introducing initiatives,
roadmaps, and visions for the digital economy
to offer guidance and recommendations
for expanding the digital economy within
its cooperation frameworks. In 2014, APEC
leaders endorsed the APEC Accord on Innovative
Development, Economic Reform, and Growth and
the APEC Initiative of Cooperation to Promote
Internet Economy in Beijing, which incorporated
the internet economy into the APEC cooperation
framework for the first time. In 2017, the APEC
RoadmaponInternet and Digital Economy was
also endorsed to facilitate technological and policy
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exchanges, foster innovation, promote inclusive
and sustainable growth, and address the digital
divide among APEC members. In 2020, the APEC
Putrajaya Vision 2040 and the Aotearoa Plan of
Action were adopted, outlining the cooperative
vision for APEC beyond 2020. In terms of the
digital economy, APEC members unanimously
expressed their commitment to promoting the
development of new forms and models in the digital
economy and empowering people and corporate
communities in the Asia-Pacific region to participate
in and lead global economic development in the
digital era. Moreover, China’s National Cyberspace
Administration and Ministry of Foreign Affairs
launched the “Building an Inclusive Digital Society:
Promoting Economic Growth, Alleviating Poverty,
and Improving Living Standards” initiative within
the framework of APEC. This initiative provided
a platform for APEC economies to share best
practices and deepen cooperation in digital
poverty reduction, so that people from this region
could benefit from digital advancements. On the
other hand, organization and coordination
mechanisms have been continuously enhanced.
In 2019, the APEC Digital Economy Steering Group
(DESG) was established. APEC highly prioritizes
digital economy development and cooperation,
having built an organizational structure in which
DESG plays a coordinating role and all working
groups advance their work within their respective
scope of responsibilities. Since its establishment,
DESG has undertaken several projects to boost
development and cooperation in the digital economy
in the region, including leveraging digital technology
in fighting the COVID-19 pandemic, improving the
digital business environment, promoting digital
licensing and e-government, enhancing the cross-
border effectiveness of notification systems for
personal data breaches, and bridging the digital
divide.
2.2.2 Digital Silk Road
The Digital Silk Road (DSR) is committed to
promoting connectivity, innovative development,
open collaboration, inclusiveness, and mutually
beneficial cooperation among participating
countries. Since its inception in 2013, the Belt
and Road Initiative (BRI) has evolved from a vision
to a reality, achieving substantial results and
demonstrating tremendous vitality and resilience.
With the onset of a new wave of technological
revolution and industrial transformation, digital
technologies like the internet, big data, cloud
computing, AI, and blockchain are rapidly
converging with industries—a trend that is also
adding new dimensions to BRI and creating
valuable opportunities for economic growth and
digital transformation in BRI countries. In December
2017, China joined hands with Thailand, Saudi
Arabia, Serbia, Turkey, Laos, and the United Arab
Emirates to launch the Initiative on the Belt and
Road International Digital Economy Cooperation4.
This initiative outlined collaborative measures across
15 domains, encompassing expanding broadband
access, advancing digital transformation,
supporting entrepreneurship, innovation, and the
development of SMEs, strengthening digital skills
training, promoting ICT investment, facilitating digital
economy cooperation between cities, enhancing
digital inclusiveness, expanding international
cooperation in standardization, and encouraging the
establishment of multi-level exchange mechanisms.
Currently, DSR countries have been consistently
deepening cooperation in cutting-edge fields
such as the digital economy, AI, nanotechnology,
and quantum computing. This collaborative effort
has propelled progress in the sectors of big data,
cloud computing, and smart city development
4 Up to date, China has signed MOUs on Digital Silk
Road with 17 countries, established bilateral cooperation
mechanisms for Silk Road E-Commerce with 23 countries,
and built 34 cross-border land cables and multiple
international undersea cables in collaboration with
neighboring countries.
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and turbocharged innovative development in BRI
countries. As of the end of 2022, China had signed
DSR cooperation memoranda of understanding with
17 countries and established bilateral cooperation
mechanisms for “Silk Road E-Commerce” with 23
countries. As a result, China has built 34 cross-border
land cables and multiple international undersea cables
in collaboration with neighboring countries.
Box: Collaborative projects under the Digital Silk Road
The China-ASEAN Information Harbor (CAIH) is a collaborative initiative between China
and ASEAN. As an open digital economy hub, an international conduit for communications, and a
regional service center for the application of international big data resources, CAIH has played a key
role in advancing the development of the “Digital Silk Road”. Notably, the operational “China-ASEAN
Commerce and Trade Platform” facilitates same-day transactions and customs clearance for border
communities. This platform is instrumental in transforming Guangxi, China, into a unique hub for
e-commerce transactions, cross-border financial settlements, and international logistics between
China and ASEAN. The Cross-Border Cross-Regional Smart IoT Public Service Platform, powered
by eSIM and advanced 4G/5G communication technologies, provides cloud-based guidance for
China and ASEAN members in the domains of smart city development and big data. Furthermore,
the China-ASEAN Telemedicine Center, operated by Chinese healthcare institutions, enables remote
consultations for patients from ASEAN countries such as Indonesia, expanding access to better
medical resources and services for people in the region.
The China-ASEAN Earth Big Data Platform and Application Demonstration (CADA)
project was initiated in 2021. It aims to establish a regional platform and service system for earth
big data, leveraging technology and data to support sustainability objectives and application
initiatives in areas such as disaster management, water resources, coastal zones, and agriculture.
The project seeks to enhance application capabilities contributing to the achievement of sustainable
development goals across the ASEAN region. After more than two years of research and practical
application, the project has made substantial progress. It successfully aggregated and established
foundational platforms for China and ASEAN, including an earth big data service and international
interoperability system, a collaborative positioning service system, an online data and computing
system, and a “Digital Silk Road” sustainable development demonstration system. These platforms
constitute the cornerstones for earth big data service capabilities in China and ASEAN. The
project has installed over 120 monitoring and warning points for geological disasters, significantly
contributing to disaster prevention and mitigation efforts. Demonstrative applications have also been
carried out in key agricultural and transport projects, resulting in economic gains of RMB 30 million.
2.2.3 Shanghai Cooperation Organization
The Shanghai Cooperation Organization
(SCO) has developed a new approach to
digital economy cooperation to promote
technological innovation, economic growth,
and the equitable sharing of benefits. On
one hand, member nations of the SCO have
exhibited a policy direction in the realm of
digital economy characterized by inclusive
development goals, a proactive and organized
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development pace, and a pragmatic approach
to international cooperation. As a result, digital
economy cooperation has seamlessly evolved
into a burgeoning area of collaboration within
the SCO. The Statement of the Council of SCO
Heads of State on Cooperation in the field of
Digital Economy, issued on November 10, 2020,
underscores the imperative to foster collaboration in
digital, information, and communication technology
across sectors such as industry, transport,
agriculture, health, education, tourism, energy,
trade, finance, and customs. The Statement
also highlights the need to explore possibilities
for implementing new digital enterprise projects,
as well as for carrying out collaborative research
and planning projects for the use of modern ICT
in areas such as cutting-edge digital technology,
AI, robotics, the Internet of Things, innovation
clusters, development of science and technology
parks, incubation and development of startups,
national governance, and government services.
In July 2023, the SCO issued the Statementof
theCouncilofSCO HeadsofStateonCooperat
ioninDigital Transformation, which clearly states
that member states need to join forces in unlocking
the full potential of digitalization across all sectors of
the economy, including the digitalization of the real
economy; that member states will continue efforts
to ensure that the benefits of digital transformation
are accessible and affordable for the full realization
of human potential and will focus on people-centric
development; that member states will advocate
for continued work on access to affordable digital
infrastructure and in support of the digital economy,
seeking digital connectivity and services to enhance
digital opportunities and digital interoperability; and
that member states are urged to steadfastly support
the digitization of key areas, including finance,
while also committing to promoting digital solutions
that meet information security requirements and
benefit the populations of member countries. On
the other hand, SCO member states will also
focus on expanding cooperation in cutting-edge
areas of the digital economy, such as digital
technology and data. In May 2023, the China-
SCO Big Data Cooperation Center was officially
inaugurated, adopting an innovative organizational
model characterized by one headquarters
supported by a number of sub-centers. Operating
under the auspices of the China Academy of
Information and Communications Technology, this
center guides and manages various specialized
sub-centers, with a primary mission of supporting
China’s engagement in high-level SCO activities. It
also aims to establish an industrial service platform
for digital technology, drive the development of
digital economy-focused industrial parks, compile
and release case studies and white papers,
host globally impactful conferences and forums,
create a platform for testing and certification
services, implement exchanges and training for
digital skills, and facilitate collaborative research
on digital infrastructure. In September 2023, the
SCO National Digital Technology Platform was
unveiled in Beijing. Relevant departments of SCO
member states will collectively establish a standard-
setting organization in support of youth innovation
and entrepreneurship, collaborative technological
innovation, and technology standards across SCO
countries. Moreover, the platform will conduct in-
depth analyses of the digitalization levels and needs
of cities and industries in SCO members and offer
customized solutions and recommendations for
industrial digitization. It will bring together successful
Chinese enterprises in this field to help advance
digital transformation in these countries.
2.2.4 Association of Southeast Asian Nations
With the rapid advancement of cutting-edge
technologies such as AI, cloud computing, the
Internet of Things, and blockchain, a new wave
of technological competition has unfolded in
nearly all areas. For the Association of Southeast
Asian Nations (ASEAN), the urgent imperative
is to expedite the adoption of digital technology
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to stimulate post-pandemic economic recovery.
Simultaneously, various issues related to the digital
economy have gained global attention, including
inclusive growth, sustainable development, and
privacy and security protection. These factors have
collectively prompted ASEAN to continually enhance
its development and cooperation framework to
accelerate the growth of its digital economy.
Enhancing top-level design for the
development of the digital economy and provide
comprehensive guidance. From 2018 to the
present, ASEAN has released several documents,
including the ASEAN Digital Integration Framework,
ASEAN Digital Integration Framework Action Plan
2019-2025, ASEAN Digital Masterplan 2025, and
ASEAN Digital Economy Framework Agreement
(DEFA). These initiatives aim to transform ASEAN
into a leading digital community and economic
bloc driven by secure and revolutionary digital
services, technologies, and ecosystems. This
ambition involves ensuring the interoperability
of digital infrastructure, ensuring the security
and trustworthiness of digital services, fostering
innovation, optimizing governance, and removing
barriers to digital service scale-up. The ASEAN
Digital Masterplan 2025 comprises eight desired
outcomes, each accompanied by specific actions
and categorized by importance with established
timetables. Specialized project management teams
will be formed to oversee the implementation of
these actions.
Providing detailed sector-specific
guidance to speed up connectivity and digital
transformation. During the 38th and 39th
ASEAN Summits, the ConsolidatedStrategyon
theFourth Industrial RevolutionforASEAN and
ASEAN AgreementonElectronic Commerce
were respectively adopted to boost regional
digital transformation and propel the development
of digital infrastructure (5G networks and data
centers), cloud computing, cybersecurity, AI, and
smart manufacturing. Furthermore, the ASEAN
Comprehensive Recovery Framework (ACRF) has
established digital interconnectivity as a key priority
for promoting regional connectivity and speeding up
economic recovery.
Focusing on cross-border data flows and
enhance digital governance frameworks. ASEAN
has introduced the Data Management Framework
(DMF) and Model Contractual Clauses for Cross
Border Data Flows (MCC), which are designed
to assist businesses in reducing negotiation and
compliance costs while ensuring robust protection
for the cross-border movement of personal data.
The DMF provides a step-by-step guide for
businesses to put in place a data management
system, which includes data governance structures,
risk management measures, and safeguards,
as well as efficient systems for full-cycle data
management. The MCC serves as a template for
companies to draft binding agreements for cross-
border data transfer, clarifying important definitions
and specifying the obligations of data providers
and recipients. These two documents collectively
contribute to harmonizing data management and
standards on cross-border data flows in the ASEAN
region, shaping a transparent, trustworthy, and
responsible digital business environment in ASEAN.
2.2.5 Regional cooperation in Central Asia
In recent years, Central Asian countries have
universally embraced the digital economy as a new
driver and direction for building a modern economic
system and fostering high-quality economic growth.
They have introduced a flurry of digital economy
strategies to promote regional and cross-regional
collaboration. Specifically, these countries hold
enormous potential for the digital economy, offer
a fertile ground for e-commerce, and have shown
constant improvements in e-governance. However,
there exist notable disparities among them in
terms of digital economy development. Therefore,
narrowing the digital divide and strengthening
interconnectivity are usually prioritized in
regional cooperation frameworks across Asia.
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The Central Asia Regional Economic
Cooperation (CAREC) Program has unveiled the
CAREC Digital Strategy 2030, which prioritizes
six key collaboration areas: healthcare, education
and learning, agriculture, finance, trade, and
tourism. The strategy has the following objectives—
promoting investments in digital infrastructure
to reduce connectivity disparities; coordinating
legislation on digital and data matters to foster a
conducive environment; developing new digital
skills to generate employment opportunities,
particularly for women, vulnerable populations,
and minorities; attracting talents to strengthen
innovation ecosystems in CAREC countries;
reducing regional trade barriers to boost cross-
border trade and create business opportunities for
regional companies; improving digital infrastructure
and establishing interoperable digital platforms to
support the development of business clusters in
CAREC countries. These initiatives aim to accelerate
digital transformation across the entire region.
2.2.6 Cooperation among Arab countries
In the broader context of global digital
transformation, many Arab countries have made
rapid strides in their digitization efforts. Countries
like the United Arab Emirates and Saudi Arabia
are regional leaders in digital transformation.
However, the imperative to stimulate and sustain
local economic growth necessitates intensified
collaboration in the digital economy. As a whole,
the Arab world remains a laggard in terms of
digital transformation and competitiveness and
there is an urgent need for collaborative actions
or joint planning in the digital economy to provide
a clear and unified focus for regional economic
development and competitiveness enhancement.
Against this backdrop, the Arab League
developed the Arab Digital Economy Vision
in 2018, offering a strategic blueprint for the
sustainable growth of the digital economy in the
region. Envisaging the robust growth of the digital
economy as a catalyst for a sustainable, inclusive,
and secure future in the Arab world, the vision is
supported by five pillars: digital foundation, digital
government, digital citizen, digital innovation, and
digital business. In view of the economic and
technological levels, as well as the competitiveness
of each Arab country, the vision includes 20
strategic goals and 50 programs and projects.
It is expected that by 2030, with the successful
realization of the vision, the combined GDP of Arab
countries could increase to USD four trillion.
In 2020, Bahrain, Jordan, Kuwait, Nigeria,
Oman, Pakistan, and Saudi Arabia jointly
established the Digital Cooperation Organization
(DCO) as an accelerator of digital transformation
in this region. The DCO’s key initiatives include
programs to enhance cross-border data flows,
promote market expansion for SMEs, empower
digital entrepreneurs, and advance digital inclusion
among women, youth, and other underrepresented
populations. In January 2023, the DCO unveiled
its 2030 roadmap, calling for global collaboration
to bridge the digital divide. It is designed to
promote common interest, advocate for advanced
cooperation, build regulatory frameworks and
business environments, and ensure the inclusive
and trustworthy nature of the digital economy at
local, regional, and global levels. The plan aims at
an ambitious future in which the digital economy
contributes 30 percent to global GDP, and creates
30 million jobs worldwide.
3. Key developments in Asia’s
digital economy
3.1 Improved digital infrastructure
In terms of digital infrastructure development,
there is an obvious gap within Asia. Mature markets
including China, Japan, Singapore and South
Korea are leading the development and deployment
of digital infrastructure, while the other countries
are weak in infrastructure development due to
incomplete layout, insufficient investment and
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inadequate technological support.
3.1.1 The accelerated deployment of fixed
network enables broader sharing of benefits
Asia sees a rapid improvement in its
connection speed of fixed broadband. According
to the latest statistics by Ookla’s Net Index, Asia
performs better than global average when it comes
to broadband speed. In terms of home broadband
speed, as of June 2023, global median speeds
for download, upload and latency are 82.6Mbps,
36.8Mbps and 9ms respectively. Singapore, UAE,
Thailand and China are ranked 1st, 4th, 5th and
7th on the index of fixed broadband speed, with
download speeds respectively at 247.4 Mbps,
238.3 Mbps, 211.3 Mbps and 193.7 Mbps. In
addition, Asian countries including Japan, South
Korea, Malaysia, Vietnam and the Philippines are
also above the global median value in terms of
download speed of fixed broadband. Meanwhile,
a large speed gap across countries merits our
attention. For example, Singapore has an average
broadband speed as high as 247.4 Mbps, while
the number for Timor-Leste is as low as 5.6 Mbps,
revealing a huge gap in network speed within Asia.
Source: Ookla
Figure 4 Fixed Broadband Speeds in Asian
Countries, June 2023（Mbps）
Asia benefits from expanded coverage
of broadband network. Thanks to continuous
improvement in policy and strategic planning of
broadband network in Asia, 47 Asian countries
saw the number of fixed broadband subscribers
increase to 655 million, 714 million and 789 million
respectively in 2019, 2020 and 2021. According to
incomplete statistics, 39 Asian countries other than
Afghanistan, Kyrgyzstan, Tajikistan, Yemen, Syria,
Nepal, Lebanon and Laos reported a combined
subscription of fixed broadband services at 858
million in 2022.
Digitally leading economies are also leading
the development of fixed network. In terms
of digital infrastructure, Singapore is among the
most developed economies in the world, with a
highly functioning fixed telephone network. The
broadband and mobile phone penetration rates are
200% and 160.6% respectively in the country. In
2022, fixed broadband subscribers amounted to
600 million in China (including Hong Kong, Macao
and Taiwan), increasing its share of Asia’s total to
16.6% from 15.1% in the previous year. As of the
end of September 2022, China had put in place
the world’s most extensive fibre-optic network,
with fibre ports increasing 7.9% year on year to
one billion. More than 450 million households in all
the cities in the country have benefited from their
access to 1000M broadband services.
Certain countries are accelerating their
deployment of broadband network. In 2022, the
fixed broadband subscribers surpassed 370,000
households in Turkmenistan, an increase of 230.7%
from the previous year. In the past two years,
countries like Mumbai, Bhutan, Timor-Leste and
Cambodia also experienced a growth of more than
50% in their fixed broadband subscriptions.
3.1.2 Inter-generational evolution of mobile
communication technology drives high-quality
development of mobile network
Asia is home to diversified markets and users.
Those countries in a comparatively leading position
in the digital economy are leading the sectors such
as super high speed mobile services, while the other
countries and regions are leveraging mobile Internet
to provide basic connectivity service for education,
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healthcare, banking and other industries, promising
to embrace huge opportunities in mobile network.
As mobile connectivity is increasingly widely
available, mobile Internet that can provide basic
connectivity service for industries such as education,
healthcare and banking is emerging as a key area for
various countries in Asia. Between 2013 and 2022
(except in some special year), continuously driven
by Asian countries5, mobile connections have
maintained a steady growth in Asia, increasing
from 3.8 billion to 5.06 billion at a compound annual
growth rate of 3.2%, and accounting for nearly
60% of global connections. In 2023, the number is
projected to surpass 5.1 billion.
Source: GSMA
Figure 5 Mobile Internet Connections in Asia ($ Billions),
2013-2023
There is a clear trend of inter-generational
iteration for mobile communication technology.
3G and 4G ushered in the era of mobile Internet,
while 5G represents a shift from mobile Internet
to mobile Internet of Things, expanding people-
to-people communication to people-to-things
and things-to-things communication. Integrated
deeply into social and economic domains, mobile
communication technology has fundamentally
changed the way people work and live. Asia has
experienced an evolution from 2G dominance (before
2015) to 4G prevalence (since 2018). 2G decreased
from 97.8% in 2000 to 8.9% in 2022 as a share of
total mobile connections in Asia, while 4G climbed
from 0.01% in 2007 to 65.2% in 2022 as a ratio
of Asia’s total mobile connections. Today, with the
accelerated technological advances and commercial
adoption of 5G, this technology has demonstrated
its benefits of faster and secure connections,
stronger signals, more extensive coverage and
broader applications. As a result, Asian countries
have increased their enthusiasm and motivation to
advance 5G technology. Since 2020, the ratio of 5G
network connections in Asia has dramatically grown
from 0.28% in 2019 to nearly 15%, and potentially
further to 20.8% in 2023, overtaking 2G and 3G
connections. Take India for instance. The country has
been driving the growth of network by implementing
the “mobile first” strategy. As of July 2022, India
had built a strong user base of 776.8 million mobile
broadband subscribers. The installation of fibre optic
cables is a strong force behind the growth of 5G.
Since its launch of 5G service in October 2022, India
has increased the speed of fibre cable installation
by six folds, from 16,712 kilometers per month to
101,550 kilometers per month.
Source: GSMA
Figure 6 Generational Replacement of Mobile
Connectivity in Asia
5 Unless otherwise specified, the data of Asia covers 47
countries including Afghanistan, Armenia, Azerbaijan, Bahrain,
Bangladesh, Bhutan, Brunei, Cambodia, China, Georgia, India,
Indonesia, Iran, Iraq, Israel, Japan, Jordan, Kazakhstan, Kuwait,
Kyrgyzstan, Laos, Lebanon, Malaysia, Maldives, Mongolia,
Myanmar, Nepal, the Democratic People’s Republic of Korea,
Oman, Pakistan, Palestine, the Philippines, Qatar, Saudi Arabia,
Singapore, South Korea, Sri Lanka, Syria, Tajikistan, Thailand,
Timor-Leste, Turkey, Turkmenistan, United Arab Emirates,
Uzbekistan, Vietnam, and Yemen.
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From a regional perspective, thanks to
accelerated network construction in China, South
Korea and Japan, East Asia6 has maintained its
leadership in Asia as far as mobile connections are
concerned. In 2022, this part of Asia reported 2 billion
connections, accounting for 40.2% of Asia’s total,
followed by South Asia with 33.9% of Asia’s mobile
connections. Across every region of Asia, mobile
network connections have increased at a fast
pace. 2017 marked a watershed in the development
of mobile network in Asia. In 2013-2016, South Asia
and South-Eastern Asia outpaced the other parts of
Asia in growing mobile connections; and since 2017,
Central Asia and West Asia have achieved the highest
growth rate of mobile connections by accelerating
strategic moves in this field.
Source: GSMA
Figure 7 Mobile Connectivity in Asia
3.1.3 Stronger needs for cloud computing create
new sources of growth for digital economy.
Asia is accelerating the development of cloud
computing. Globally, an “one superpower+multiple
strong players” pattern is taking shape in cloud
computing. In 2022, North America accounted
for 52.14% of the global market of public cloud,
an increase of 20.4% from 2021. Europe and
Asia took the second and third place, covering
23.41% and 18.35% respectively of the world total.
Oceania, South America and Africa are still in a
“developing” state, occupying a mere share of 6.1%
when combined. Driven by the continuous growth
of availability zones in South East Asia and rapid
advances of core cloud computing technology,
Asia is rising as the next main battlefield for global
competition in cloud computing, with a growth rate
of more than 30% which is twice as fast fast as
Europe.
Source: Gartner, April 2023
Figure 8 Global Distribution of Cloud Computing
From a country perspective, China is
undoubtedly a global leader in cloud computing.
In 2022, China’s cloud computing market was
valued at RMB455 billion, representing a 40.91%
growth from 2021. Considering the global growth
rate of 19%, China’s cloud computing market is
still at a high-growth stage, promising to hit the
benchmark of RMB 1 trillion by 2025. India is also
expediting the development of cloud computing
and emerging as a global hub of data. Based on
the data by Ernst & Young (EY) and the Federation
6 According to the UN classification, five countries of
Eastern Asia include China, the Democratic People’s
Republic of Korea, Japan, Mongolia, and South Korea; fi ve
countries of Central Asia include Kazakhstan, Kyrgyzstan,
Tajikistan, Turkmenistan, and Uzbekistan; 18 countries of
Western Asia include Armenia, Azerbaijan, Bahrain, Cyprus,
Georgia, Iraq, Israel, Jordan, Kuwait, Lebanon, Oman,
Qatar, Saudi Arabia, Palestine, Syria, Turkey, United Arab
Emirates, and Yemen; 9 countries of Southern Asia include
Afghanistan, Bangladesh, Bhutan, India, Iran, Maldives,
Nepal, Pakistan, and Sri Lanka; and 11 countries of South-
Eastern Asia include Brunei, Cambodia, Indonesia, Laos,
Malaysia, Myanmar, the Philippines, Singapore, Thailand,
Timor-Leste, and Vietnam.
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of Indian Chambers of Commerce & Industry
(FICCI), cloud computing has become a strategic
choice for Indian businesses. More than 78% of
organizations in India have migrated over 30% of
their data to the cloud. A NASSCOM-EY survey
shows that 78% of India’s IT companies, 53%
of its healthcare and BFSI companies and 49%
of its pharmaceutical companies have moved
their data to the cloud since 2019. According to
a recent IDC report, 40% of Indian organizations
will implement dedicated cloud services either on-
premise or in a service provider facility by 2024.
The cloud server market in South Korea is growing
at a fast pace. Market research data shows that
thanks to the government’s strong support for the
cloud computing sector, the country’s cloud server
market size is projected to reach USD 3 billion in
2024 from USD 1 billion in 2019, at a compound
annual growth rate of more than 20%. Alibaba
Cloud and Huawei Cloud are investing heavily
in South East Asia in an effort to help build a
computing ecosystem in this part of Asia. For
example, Alibaba Cloud announced to launch an
international center of competence in Singapore to
cover four areas of product, ecosystem, operation
and branding. Local teams will be responsible for
designing localized products and solutions and are
committed to localized operations in the country.
Huawei has set up a data center in Indonesia. By
the end of 2022, the center had attracted around
30 local clients, providing the country with stronger
capabilities in digital innovation.
3.2 Great potential from digital technology and
industrial empowerment
3.2.1 Enhanced 5G technology is rapidly
shaping an integrated application ecosystem
Speeding up the development of domestic
5G standards in line with international protocols.
R15, R16 and R17 have laid the foundation for
the development of 5G, while R18 represents the
updated version of 5G standards (5.5G). Currently,
the 3rd Generation Partnership Project (3GPP) is
actively advancing the research and development of
5G international standards. Asian countries are also
represented in this endeavor and have achieved
key milestones. The Infocomm Media Development
Authority (IMDA) of Singapore has released a
draft version of technical specifications on cellular
mobile terminals, cellular base stations and repeater
systems, in which 5G technical requirements are
incorporated. The Ministry of Science and ICT of
South Korea took the lead in 2018 to identify 5G
network technical standards, detailing technical
specifications for various 5G devices such as
base stations and telegraphic translators. China
has secured a say in the development of 5G
international standards. Among the 3GPP standard
development organizations, China contributes 30%
of the total publications and leads 40% of the total
projects. China Mobile and China Telecom are the
major lead organizations. The Directorate General of
Resources and Equipment for Post and Information
Technology (SDPPI) of Indonesia announced in
September 2023 a draft of Technical Standards
on Telecommunication Equipment and Mobile
Devices, which is aligned with the latest LTE and 5G
standards (IMT-2020). The draft is open to public
consultation before October 1, 2023.
Led by China, Asia has become a primary
place of origin and standard development for
5G patents. According to the Global 5G Patenting
Activity Report 2022 released by China Academy
of Information and Communications Technology
(CAICT) in April 2022, global patents declared
essential to 5G standards have demonstrated a
year-on-year upward trend. As of the end of 2021,
there were more than 64,900 5G-delcared patents
globally and over 46,100 valid patent families
worldwide. Huawei contributed 14% to global valid
patent families, ranking first with strong advantages.
From a country perspective, among the top
ten businesses in terms of valid patent families,
companies from Asian countries including China,
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South Korea and Japan performed well, accounting
for more than half (52.5%) of global patent families.
The year 2022 witnessed an explosive growth of
5G patent filings by Chinese companies which
had been active in innovating 5G technologies
and developing 5G international standards.
Chinese companies have become global leaders
of 5G technology with their 5G-declared patents
accounting for 39.9% of the world total.
Source: CAICT
Figure 9 Global Share of Top 10 Firms’ Valid Patent
Families, by country
5G technology is increasingly used for
commercial purposes at a faster pace. China,
South Korea and Japan are among the first
countries to test and deploy 5G network in
commercial settings. In June 2019, China’s
Ministry of Industry and Information Technology
granted 5G licenses to China Telecom, China
Mobile, China Unicom and China Broadcasting
Network Corp, ushering in the first year for 5G
commercial use. Today, China has established
a leadership position in the development of
commercial 5G in terms of scale, number of
standards and innovative applications. Integrated
applications have been continuously expanded,
playing an increasingly important role in supporting
the digital economy in the country. South Korea is
the first country to announce the commercial use
of 5G technology. Since launching the commercial
service of 5G in April 2019, the country has been a
leader in adopting 5G technology and innovating its
relevant services. As of February this year, the 5G
penetration rate had surpassed 37% and 5G users
had generated 78% of total mobile data traffic in the
country. In Japan, 5G is one of the key drivers of
digital transformation of consumers and businesses.
However, since the three telecommunication
operators launched 5G commercial service in
2020, the 5G network coverage has been below
40% across the country. Meanwhile, countries
like Indonesia, Laos, the Philippines, Singapore,
Thailand, Vietnam and India have all started to pilot
or officially deploy commercial applications of 5G.
As 5G is scaled up, Asia’s 5G application
ecosystem is showing a growth momentum
equally driven by vertical market and traditional
consumer market. In 2022, countries around
the world were highly motivated to implement the
5G technology on the ground. In particular, some
leading countries including China, South Korea
and Japan made investments and conducted
pioneering practices in integrated applications
of 5G, in the fields of AR/VR, UHD, industrial
Internet, smart mobility, intelligent healthcare,
public security and emergence responses, and
dedicated military network. These exploratory
practices have played vital roles in national military
innovation, smart lifestyle, intelligent manufacturing
and productivity improvement. Since 2022,
South Korea has been promoting the converged
applications of 5G across various industries. The
government has not only supported technological
upgrading of industry-specific innovative
applications and consumer applications, but also
further unlocked the potential of 5G industrial
ecosystem to scale up the integrated application
of this technology worldwide. By October 2023,
China had integrated 5G technology into 67
divisions of national economy (97 divisions in
total), accumulating more than 94,000 use cases
and increasing the breadth and depth of industrial
application. In particular, the technology has been
replicated at a large scale in such key sectors
22 Boao Forum for Asia
as manufacturing, mining, healthcare, energy
and ports. On the whole, major Asian countries
are still at an early stage in terms of industry-
specific application of 5G, with a strong pipeline of
demo projects, but low availability of mature and
replicable applications. They are firmly on the track
toward large-scale application.
3.2.2 Artificial intelligence is gaining traction,
giving birth to an increasing number of
innovations and applications
From an industrial perspective, Asian
AI companies account for about a quarter
of the world's total. As of the first quarter of
2023, China, India, Israel, Singapore and Japan
accounted for 15%, 5%, 3%, 2% and 2% of the
total number of AI companies around the world.
Among the 181 AI unicorns across the globe, there
are 26 Chinese companies, 5 Israeli companies, 3
Indian companies and 3 Singaporean companies.
These four Asian countries cover more than 20%
of the world’s total. In most Asian countries,
the financing curve is going down, with AI
Generated Content (AIGC) emerging as one hot
area for investment and financing activities.
In 2022, a total of 485 AI-related financing deals
worth USD11.65 billion were closed in China,
down by 55.8% compared with the previous
year; 137 financing transactions were completed
in Israel, with the financing amount at USD2.07
billion, a year-on-year decrease of 9.7%; there
were 64 financing deals in Singapore valued
at USD780 million, dropping by 54% from the
previous year; and India saw an opposite trend,
with USD720 million financed through 118 deals,
a 33.9% increase over the previous year. ChatGPT
went viral worldwide in 2022, making AIGC as one
magnet for investment and a hot area sought after
by the technological and industrial communities.
As tracked by CAICT, 23%, 5%, 2%, 2% and
1% of key AIGC companies around the world
are located respectively in China, Israel, India,
Singapore and South Korea.
Source: CAICT
Figure 10 Global Distribution of AI Businesses, by
country
From a standpoint of technological innovation,
China is a pacesetter in Asia in terms of patents
and academic papers, closely followed by
India, South Korea and Japan. When it comes to
publication of papers, China is far ahead of the
other countries in Asia and has been growing at a
fast pace. From 2013 to the first quarter of 2023,
Asian countries among global top 10 performers
in terms of AI-related papers included China (1st),
India (3rd), South Korea (6th), Japan (8th); among
the world’s top 10 institutions measured by the
number of AI-related academic papers, four
institutions are based in China (Chinese Academy
of Sciences, Qsinghua University, Shanghai Jiao
Tong University and Zhejiang University), and
one institution is located in India (Indian Institutes
of Technology). Among the top 10 most visited
papers in the next half of 2022 and the first
quarter of 2023, China was part of eight papers
with a research focus on deep learning, task
analysis, model training and neural network.
One paper from Singapore was included in the
top ten, which mainly addresses the topic of
neural network and feature extraction. In terms
of patent filings and grants, among the 10
countries with the most AI patents from 2013 to
the first quarter of 2023, China was ranked the
first, far ahead of other Asian countries. South
Korea, Japan and India are the other three Asian
countries among the top ten.
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A look at technology applications reveals
a new wave unleashed by large models.
Companies in various countries are actively
developing large models and their applications,
giving rise to application scenarios of AIGC.
Since the advent of ChatGPT in November 2022,
generative AI has been widely watched. Companies
in major countries of Asia have launched a
number of AIGC-like products and research plans.
Currently, enterprise-level applications of
AIGC have covered various industries such
as marketing, gaming, healthcare and office,
which are expected to further expand into more
areas. In order to make AI part of people’s day-
to-day life, South Korea has launched a series
of representative AI large models. For instance,
LG has unveiled a multimodal AI model for the
industries of biomedicine and smart manufacturing.
Kakao Brain has developed a highly accurate
large language model KoGPT for the purpose
of image generation and healthcare. According
to the Artificial Intelligence Competitiveness
Enhancement Plan, South Korea intends to apply AI
in various areas including corpus, law, healthcare,
psychological counseling, literature and art, and
academic research. The plan also proposes to
mobilize more private investment and provide new
services. Japan seeks to achieve breakthroughs
in certain areas and focuses on the application
of generative AI. The country tends to leverage
the existing large models such as ChatGPT to
develop specific applications and solve real-
life problems in various fields. Based on BERT,
one of Google’s first Transformer models, Japan
has developed NTELLILINK Back Office NLP, an
advanced natural processing solution that enables
the functions of document classification, knowledge
reading and automatic summarization. In addition,
the HyperCLOVA base model and Japanese
version of GPT have been launched successively.
With 82 billion parameters, HyperCLOVA will be
trained on 10 billion-plus pages of Japanese data
to expand to 175 billion parameters. In August
2021, Rinna launched a model named GPT2-
medium. In 2022, the company introduced the
Japanese version of GPT-2 trained on Japanese
corpus, with parameters up to 1.3 billion. China
is experiencing an explosive growth of AI
large models, with companies and research
institutions having launched a large number
of multi-modal large models to empower
industrial applications. Since rolling out its large
language model Ernie, Baidu has gradually built
an “Ernie large model+industrial applications”
multi-layer ecosystem, bringing a broad range of
applications for finance, energy, manufacturing,
media and Internet as well as other sectors. Alibaba
has launched its large language model called Tongyi
Qianwen to enable various Internet applications
in the Alibaba family including Taobao, DingTalk,
Alibaba Cloud and Fliggy. The company aims to
create an application ecosystem to meet the needs
of a variety of scenarios ranging from e-commerce
and office, to cloud service and travel. Huawei has
unveiled its Pangu large model that covers the
industries of industrial quality inspection, logistics
warehousing monitoring and fashion-aided design.
Moreover, Internet and technology companies
like Tencent, SenseTime and iFLYTEK have also
launched their own AI large models.
3.2.3 Cybersecurity deployment is accelerating
and cyber ecosystem is improving
Driven by the Covid-19 pandemic and
geopolitical tensions, cyberspace is becoming
a new field for competition as the “fifth domain”.
In an evolving global framework for cyberspace
governance, Asia is playing an increasingly vital
role. Countries like South Korea, Japan, India and
Singapore are sparing no effort in improving their
capability of cyberspace governance and promoting
the fast growth of cybersecurity technologies and
industries.
Improving institutional set-up has become
a key measure to increase the capacity of
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monitoring, early warning, emergency response
and coordination against cybersecurity threats.
In March 2022, Japan amended the Police Law
to set up a cyber police bureau and a special
investigation team to deal with serious cybercrime
cases. In April 2022, the Cyber Security Agency of
Singapore (CSA) launched a licensing framework
for cybersecurity service providers and set up the
Cybersecurity Services Regulation Office (CSRO)
to administer the licensing framework and facilitate
liaisons with the industry and wider public on all
licensing-related matters. In October 2022, South
Korea announced the results of a chief secretaries
meeting on launching a cybersecurity task force. The
task force gathers together senior officials from the
Defense Ministry, the National Intelligence Service,
the Prosecution, the Police and the Defense Security
Support Command. The national security advisor
will preside over regular meetings of the task force to
check cybersecurity conditions in the country. In the
same month, the government of Singapore convened
an inter-agency Counter Ransomware Task Force
(CRTF) with a mission to protect the operators and
suppliers of critical information infrastructure and
help businesses, research institutions and education
providers to counter the growing ransomware threat.
Multiple measures have been taken to
advance the technological progress and
industrial transformation of cybersecurity. Public-
private collaborations have emerged as a pivotal
mechanism to support the industrial growth
of cybersecurity. Certain countries in Asia are
actively building the high ground of cybersecurity
through public-private collaborations. For example,
the Japanese government has created their own
cloud platforms to manage administrative data
and has joined hands with local businesses in
developing dedicated technologies that can prevent
information leakage and virus attacks. In addition,
the government has also discussed with the private
community and civil society to gradually identify
the necessary standards for technology and data
sharing. Platforms and services have become
essential vehicles to drive forward the industry of
cybersecurity. DTAC, a telecommunication service
provider in Thailan, has launched a cloud-based
cybersecurity service that provide security against
increasingly widespread cyber threats in the booming
digital era, including malware, viruses, phishing,
ransomware, botnets, and command & control
attacks on compromised servers. In April 2022, Cyber
Elite launched the first managed cloud cybersecurity
platform in Thailand to strengthen businesses’
resilience against cyber threats. Talent development
has become a special attempt to promote the
development of cybersecurity industry in some
Asian countries. Israel has developed an integrated
cybersecurity talent cultivation system that combines
universities, businesses and armed forces. The
country has also supported start-ups in the domain
of cybersecurity so that top professionals can thrive
in the industry. This is an effective way to cluster
cybersecutiy firms that stand out in Israel. Meanwhile,
the country has organized Unit 8200, the intelligence
corps branch of the Israeli military, to cultivate top-rate
cybersecurity talents. Licensing rules can inform
the standardization of cybersecurity industry. The
licensing framework for cybersecurity service providers
launched by CSA under Part 5 of the Cybersecurity
Act (CS Act) took effect in April 2022, which allows for
penetration testing and managed security operations
center monitoring services to protect the interests
of consumers, address the information asymmetry
between consumers and service providers, and level
up these service providers.
Bilateral and multilateral cooperation has
been enhanced to facilitate the development of
globally universal standards for cybersecurity
and shape together the order of cyberspace
governance in Asia. On one hand, Asian
countries have established stronger and
deeper partnerships with each other. ASEAN
countries are striving to establish regional
cyberspace norms, develop advanced technologies,
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resilient infrastructure and services, improve mutual
trust among member states, safeguard regional
cybersecurity and strengthen regional capability of
cyberspace governance. In October 2022, when
Japanese foreign minister paid a visit to Singapore,
the two sides agreed to increase bilateral
cooperation in the field of security. In January 2023,
the Ministry of Communications and Information
of Singapore (MCI) and the Communications and
Digital Ministry of Malaysia signed a Memorandum
of Understanding on cooperation in the field of
personal data protection and cybersecurity. On the
other hand, Asian countries have strengthened
their partnerships with the rest of the world
to increase their own cyber resilience and
impact in the world of cyberspace governance.
India, South Korea, Japan and Singapore have
built alliances with countries and influential political
entities including the United States, European
Union and North Atlantic Treaty Organization. In
March 2022, the Quadrilateral Security Dialogue
(Quad), which comprises the US, India, Japan and
Australia, was convened to discuss the topic of
“expanding the cybersecurity cooperation among
member states, partners and industries to improve
regional cyber resilience and critical infrastructure
protection”. South Korea and Japan were admitted
into the NATO Cooperative Cyber Defense Centre
of Excellence (CCDCOE) respectively in May and
November 2022. On October 7, 2022, the EU
and Japan started negotiations to include rules
on cross-border data flows in their Economic
Partnership Agreement (EPA). At the Ninth ASEAN
Defence Ministers’ Meeting Plus (ADMM-Plus),
ASEAN countries organized the first cross-border
exercise targeting cyber threats, together with
China, the US and Russia.
Cybersecurity industry has grown considerably
in various countries. In terms of scale, Statista data
shows that the total revenue from cybersecurity in
Asia reached USD147.4 billion in 2022, up by 6.9%
compared with 2021. By segment, cyber solutions
and security services contributed a revenue of
USD 17.45 billion and USD15.8 billion respectively
in 2022, representing a 7% and 2% growth from
the previous year. Meanwhile, an increase of
R&D spending and collaboration between major
participants have combined to expand the market.
An analysis of the competition dynamics reveals that
Broadcom Corporation (China), Kyndryl, Inc. (India)
and Kaspersky (Japan) are the dominant actors
in Asia. They are concentrating their resources
on building more powerful product portfolios
and expanding R&D investment and distribution
network. Supported by strategic partnerships,
they have accelerated the launch of products and
increased the market share of Asia in cybersecurity.
Source: Statista Market Insights, Gartner
Figure 11 Revenue in Asian Cybersecurity Market
(billion dollars)
Source: Statista Market Insights
Figure 12 Revenue and Growth Rate of Cyber
Solutions and Security Services
26 Boao Forum for Asia
Cybersecurity has been remarkably improved,
but the gap across countries has remained
huge. According to the Cyber Defense Index
by the MIT Technology Review Insights, which
is built upon four pillars of critical infrastructure,
cybersecurity resources, organizational capacity
and policy commitment, about 30% of the global
top 20 countries are Asian countries, including
South Korea, Japan, China, Saudi Arabia, India,
Turkey and Indonesia. Based on the 2020 Global
Cybersecurity Index (GCI) of the International
Telecommunication Union (ITU) that covers legal,
technical, organizational, capacity development and
cooperation dimensions, half of the top 10 countries
are Asian countries including Saudi Arabia, South
Korea, Singapore, United Arab Emirates, and
Malaysia, all of which are scored above 98 (100
in total). However, among the last 10 countries
covered by the index, three are Asian countries,
each of which has a score of less than 3.
Source: ITU
Figure 13 Cybersecurity Scores of Asian Countries
3.2.4 Asia sees a level-off in the growth of
blockchain and leads the world in terms of
comprehensive strength and innovative practices
Blockchain is a strategic technology for the
development of digital economy that facilitates data
sharing, business process optimization, operational
cost reduction, more efficient collaboration, and the
establishment of a trusted system. The past year
witnessed a series of changes to the industry of
blockchain in Asia.
Industrial development has been stabilized.
In a fully-fledged industrial ecosystem, Asia’s
blockchain enterprises have maintained a
ratio of 40% of global total. As of March 2023,
there were more than 3,700 blockchain-related
businesses. Driven by technologies such as NFT,
Web3.0 and metaverse, newly incorporated
blockchain companies are embracing a
momentum of growth. In the first echelon together
with the US, China is home to 2,539 blockchain
companies, or 27% of the world’s total. Also, a
large number of digital asset companies have been
registered in Singapore due to a relatively relaxed
regulatory environment in the country. Singapore
is now ranked 4th globally in terms of the number
of blockchain businesses after climbing to the third
place in 2021. One superpower supplemented
by multiple strong players is the defining
feature of the blockchain landscape in Asia.
In the Forbes Top 50 Blockchain Firms of 2023,
Asian firms account for 26%, far higher than their
share of 8% five years ago. China is the leader
in Asia, with 6 entrants (Ant Group, Baidu, China
Construction Bank, Industrial and Commercial
Bank of China, Tencent and WeBank), followed
by Japan with three companies (Fujitsu, Line and
NTT), South Korea with 2 companies (KaKao and
Samsung) and India with two companies (Mahindra
and Wipro). Asia has the most innovated
blockchains in the world. From January 1,
2009, to December 31, 2022, the number of
global patent grants in the field of blockchain had
reached 37,595, with China and the US as the
two key innovators for blockchain technology.
China outperformed all the other countries with
23,791 patent grants, occupying 63.3% of the
aggregate of the world. Japan and South Korea
are latecomers in this field, but has maintained a
stable momentum of growth. Specifically, Japan
and South Korea were recipients of 2.9% (1101
grants) and 2.1% of the world’s total patent grants
during the period mentioned above.
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Source: CAICT
Figure 14 Global Share of Asian Blockchain
Companies
Blockchain investment and financing activities
are on the rise, but capital inflow is unevenly
divided. In 2021-2022, global financing of blockchain
firms experienced a strong growth, which can be
attributed to the extended financing of previously
financed companies and increased finance for digital
asset companies like NFT. From 2010 to September
2022, tech giants in Japan and South Korea
demonstrated considerable interest in investment
and financing for blockchain firms, with Samsung,
SoftBank and Kakao being the most active players.
Seen from actual investment deals, companies in
the US and Europe have invested in a wide range of
areas such as digital assets, mining, Non-Fungible
Token, Internet service, solutions and alliance chain,
while Asian companies have focused their financing
and investment on digital assets and finance due to a
different regulatory and legal framework.
Industrial application of blockchain has
been advanced on a deeper level. A number of
countries are promoting the digital transformation
of industries centered around alliance chains.
Large financial institutions and technology
companies have been pushing forward the
innovative application of blockchain in trade finance,
cross-border finance and payment and settlement.
In January 2022, the Asian Development Bank
formed an alliance with ASEAN, Japan, China and
South Korea to build blockchain-based connectivity
of data of central banks and securities depositories
within the ASEAN Plus Three region. B y
integrating technologies into the real economy,
blockchain has empowered the innovation and
development of traditional industries. India
has identified blockchain as a key driver for
digital economy and blockchain technology as
a priority area for research. The country is taking
a deep dive into blockchain, intending to use it in
a wide range of areas such as land registration,
judicial records, electronic stamping, transport
and transportation, and direct benefit transfer.
In September 2022, India’s cabinet led by Prime
Minister Narendra Modi announced to approve joint
research on distributed ledger and blockchain by
the country’s Exim Bank and banks in other BRICS
countries. Blockchain is thriving in Singapore.
Thanks to innovative practices, the country has
become a global leader in adopting blockchain
technology. Support from the government,
establishment of regulatory framework, innovation
parks and technology incubators, development of
fintech and cross-disciplinary collaboration have
come together to drive the prosperity of blockchain
in Singapore. The country has become a global
leader in applying blockchain technology in such
areas as cross-border trade and carbon trading.
In 2016, Singapore launched the world’s first
Open Trade Blockchain (OTB) to align with China’s
Belt and Road Initiative and the South East Asia
Trade Corridor. In 2019, Singapore unveiled a
blockchain-based carbon trading exchange, the
first of its kind in the world, which allows airlines
and other corporate buyers to buy as well sell
tokens backed by carbon offset credits approved
by the International Civil Aviation Organization.
In March this year, Singapore broke down the
limit of global trade digitization and shipped liquid
chemicals from Singapore to Thailand using an
Electronic Transferable Record (ETR). As the
world’s first “paperless” cross-border trade, it
enables simplification and automation of operating
28 Boao Forum for Asia
procedures for efficiency improvement and
cost reduction in cross-border trade. Japan is
embracing a revolution of blockchain games
on its strong tradition of gaming industry.
Japan has a solid industrial foundation for the
growth of crypto games. As one of the largest
gaming markets in the world, Japan has incubated
a large number of top-class gaming companies
throughout its long history of gaming industry,
including SEGA, Nintendo, CAPCOM and Namco.
Japan has a broad portfolio of education simulation
models matching perfectly with blockchain game
principles and owns globally influential IPs such as
Pokémon, providing fertile ground for the growth
of blockchain games. At the same time, in order to
provide policy support for this emerging industry,
the country has put in place a sound regulatory
framework that contains cryptocurrency-friendly
tax laws, clear-cut regulations, well-defined
taxation and accounting rules, and strict controls
over crypto asset activities.
3.3 Accelerated integration of digital technology
into the real economy
The Covid-19 pandemic has proved to
be a digital accelerator in Asia. In the realm of
production, as manufacturing becomes a vital
engine of economic recovery, the application
of digital technologies has brought about new
opportunities and profound changes that may
drive the fast growth of manufacturing. Digital
transformation of manufacturing is playing core
roles in Asian economic activities. In the sphere
of consumer lifestyle, online banking, P2P digital
payments, e-commerce, DIY projects, stay-at-home
activities, and business activities through social
platforms have been on the rise.
3.3.1 Digital technologies are increasingly
applied in industry
Digital technologies are reshaping the
supply chains in manufacturing, accelerating the
sustainability of manufacturing and enabling the
transformation and upgrade of manufacturing
in Asia. With the increased penetration of digital
technologies, Asian manufacturing is going
from enterprise-centric to product-focused,
thus resulting in much improved efficiency and
competence.
Asia is globally leading the digital
transformation and end-to-end integration of
manufacturing. Countries in Asia are actively
leveraging digital technologies to promote the
development of digital products and services, at a
speed much faster than the rest of the world. 32%
of Asian companies are planning to build a mature
digital ecosystem in the next five years, compared
with a ratio of 15% in Europe, the Middle East and
Africa, and 24% in Americas.
Digital twin technology is gradually
extended to various manufacturing scenarios.
With enhanced readiness of technologies, digital
twins have been extended to an increasing
number of manufacturing fields such as smart
manufacturing, thus reducing the utilization cost
in smart manufacturing. In conventional research
and development practices, after design is
completed, a specific model need to be prototyped
for the purpose of system testing and follow-
up development. However, frequent prototyping
would increase the cost tremendously. To address
this situation, some manufacturers in Asia have
used digital twin technology in design. After
design modeling is in place, digital mapping will be
directly adopted for environment simulation and
physical testing. In this process, those redundant
components will be removed and those suitable
for use will be physically prototyped. In mass
manufacturing, this innovative practice can reduce
the cost across every aspect of development,
design, manufacturing and marketing. In recent
years, China has attached great importance to
research on industrial Internet and smart factories
to introduce digital twins to smart manufacturing.
In Israel, Browzwear is harnessing the power of
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3D digital twin technology to vividly visualize fabric
appearance and accurately simulate physical
properties of fabrics. The company aims to provide
designers and manufacturers with a platform for
digital sample creation and add a new dimension
to fashion design. Powered by this solution,
businesses can enjoy substantial cost and time
savings.
Box: Bridgestone leverages digital twin technology for innovative business models and tire
performance enhancement
Bridgestone, the global leader in tire and rubber manufacturing, is transforming to become a
leader in mobility solutions. The company regularly uses digital twin technology to assess the impact
of various factors such as driving style and speed on performance and durability, to improve tire
life and road conditions. With these insights, the company can advise its operators on preventing
breakdowns and increasing the wheels’ lifespan.
Improved tire design:By using digital twins to simulate tire designs, Bridgestone can optimize
the design for better performance and longevity, resulting in higher-quality products.
Reduced development time:Bridgestone can design and test new tires more quickly, reducing
the time it takes to bring new products to market. According to Bridgestone, this approach cuts
development time by 50%.
Enhanced production efficiency:Digital twins help Bridgestone optimize its tire
manufacturing processes, reducing downtime and improving production efficiency.
Better predictive maintenance:By monitoring equipment data in real-time, the digital twin
can predict equipment failures before they occur, reducing downtime and maintenance costs.
Increased sustainability:Digital twins can identify areas where waste can be reduced, leading
to a more sustainable manufacturing process.
Industrial robots have become important
tools for digital transformation of manufacturing,
and Asia is a global leader in this regard. The
new IFR World Robotics Report recorded 553,100
industrial robot installations in factories around the
world, a year-on-year growth rate of 5% in 2022.
By region, 73% of all newly deployed robots were
installed in Asia. Specifically, China, Japan and
South Korea are the three largest markets
for industrial robotics in Asia. China is rapidly
advancing the development of robotics and is the
largest consumer of industrial robots in Asia. In
2022, 290,300 units of robots were installed in
China, up by 5% from the previous year. In 2017-
2022, robot installations grew by an average of
13% every year. According to China’s Ministry of
Industry and Information Technology, industrial robot
application has covered 168 sectors in 60 industrial
categories of the national economy. In 2022, China
produced 443,000 units of industrial robots, a
20% increase from the previous year, and took
a share of more than 50% of global installations.
In 2022, robot installations in Japan were up by
9% to 50,413 units, exceeding the level in 2019,
although the peak level remains at 55,240 units in
2018. Annual installations gained 2% on average
30 Boao Forum for Asia
per year since 2017. Japan has a complete
value chain of industrial robots, owns a number
of core technologies, and exports 78% of locally
produced industrial robots to other countries. In
South Korea, robot installations increased 1%
year on year to 31,700 units, making the country
the 4th largest robotics market after the US, Japan
and China. Industrial robots are integrated into
production activities at a faster pace. According
to the IFR World Robotics 2021, electronics is the
largest customer of industrial robots with 123,800
units of annual installations, a 22% year-on-year
growth, followed by automotive (72,600 units, up
by 57%) and metal & machinery (36,400 units, up
by 29%).
Source: International Federation of Robotics
Figure 15 Annual Installations of Industrial Robots,
by region
3.3.2 E-commerce has become a key growth
sector of digital transformation in Asia
Currently, Asian online retail sales account
for nearly 60% of global total. On the whole,
e-commerce is rising in Asia with revenue
amounting to USD1.7 trillion in 2022. Its annual
growth rate between 2020 and 2025 is projected to
reach 6.95% and the penetration rate is expected
to increase from 53.3% in 2021 to 68.2% in 2025.
If this momentum remains unchanged, the market
size of e-commerce in Asia will grow from USD 1.7
trillion in 2022 to USD2.4 trillion in 2025.
Source: Statista
Figure 16 E-commerce Revenue in Asia, by segment
Source: Statista
Figure 17 Penetration of E-commerce Users in Asia
(%) in 20227
Specifically, Asia’s e-commerce market has
demonstrated the following characteristics:
Asia is an e-commerce market where one
superpower coexists with multiple competitive
players. China is the world’s largest e-commerce
market, contributing 52.1% to global e-commerce
sales in 2021. The e-commerce revenue of Vietnam,
Indonesia and India grew by 40%-50%, surpassing
most countries and regions in the world. Meanwhile,
the e-commerce market in Asia is mostly driven by
local businesses such as Alibaba, Lazada, Tmall
7 Including 37 Asian countries, namely Armenia, Azerbaijan,
Bahrain, Bangladesh, Bhutan, Brunei, Cambodia, China,
Georgia, India, Indonesia, Iran, Iraq, Israel, Japan, Jordan,
Kazakhstan, Kuwait, Kyrgyzstan, Lebanon, Malaysia, Mongolia,
Myanmar, Nepal, Oman, Pakistan, the Philippines, Qatar, Saudi
Arabia, Singapore, Sri Lanka, Tajikistan, Thailand, Timor-
Leste,Turkmenistan, UAE and Uzbekistan.
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Boao Forum for Asia
and Shopee, which contribute 80% of Asian sales.
The development and application of digital
technologies including AR and 5G has expedited
the growth of e-commerce in Asia. Augmented
reality allows for virtual testing before a product
purchase. For example, with Sony’s Envision TV
AR app, users get a direct glimpse of how Sony’s
TVs fit into the home, or view TVs mounted or on a
stand. Sephora provides a similar use case of this
technology. The retailer launched an augmented
reality mirror that simulates cosmetics on a user’s
face to show what they would look like in real time.
Real-time trading and social commerce
have become the new norm of online shopping.
Represented by livestream shopping, social
commerce has become a trending model of
e-commerce. In Singapore and Malaysia alone,
the total hours streamed on their e-commerce
platforms increased by nearly 200% between
February to June 2020. The Philippines has also
seen 65% of businesses incorporating live selling
to attract buyers. Consumption on social platforms
such as Instagram, TikTok, Snapchat and WeChat
has quickly stimulated the growth of retails in
Asia. Platforms like Grab and iStyle.id and even
brands such as Del Monte have allowed livestream
shopping on their websites or apps.
Brick-and-mortar stores are accelerating
their transformation. Impacted by the Covid-19
pandemic, shopping malls have shifted their
business focus to online marketing and sales. Marina
Square in Singapore, Siam Center in Thailand and
Pakuwon Mall in Indonesia have all established their
online sales channels to deal with certain business.
Box: Live video shopping platforms in Asia
Singapore-based Shopback operates a live video platform named Shopback Live that allows
viewers to interact with exclusive Shopback-hosted variety shows, including a popular game show
where regular viewers are able to participate in in-person events for a chance to win prizes.
In South Korea, the popular home shopping channel called “K-Shopping” uses live video
streams to showcase and sell a wide range of products, from fashion and beauty items to home
goods and electronics. Another company in South Korea, Naver, operates a live video platform
called V Live. Naver has partnered with several Korean pop (K-pop) groups to offer exclusive content
and merchandise on V Live, which has helped the platform become a major player in the live video
commerce space in Asia.
Another example is the Indian company Meesho, which offers a platform for small businesses
and individual sellers to sell their products through live video streams on social media platforms like
Facebook and Instagram. Meesho has seen tremendous success in India and has expanded to
other countries in Asia, including Indonesia and the Philippines.
TikTok is known for its short, entertaining videos, and many businesses use the platform to
create and share engaging content that showcases their products and services. For example, a
fashion brand might create a TikTok video or livestreaming video featuring one of their products
and offer a discount code for followers to use when purchasing that product. This feature is named
TikTok Shop. The hashtag #tiktokmademebuyit has been growing in popularity as more and more
viewers of short and live videos purchase either directly from TikTok or buy the promoted product
after watching the videos.
32 Boao Forum for Asia
3.3.3 Mobile payment has given a strong boost
to efficiency improvement of digital economy in
Asia
With the boom of e-commerce and instant
trading across Asian countries, mobile payment
is increasingly prevalent. Traditional banks are
leveraging their established advantages to
accelerate their digitalization, while digital platforms
are using their existing merchant and consumer
network to reach previously unbanked and under-
banked populations. In Asia, platforms such as
Alipay, Grab Pay, GoPay and Paytm have been
gaining popularity.
New models and forms of mobile payment
are emerging. Account-to-account (A2A)
payments are on the rise. PromptPay has
propelled A2A payments to become Thailand’s
leading payment method online, accounting for
42% of e-commerce transaction value in 2022, up
from 38% in 2021. Real-time payment platform
DuitNow has spurred A2A transactions in Malaysia,
claiming 37% of e-commerce transactions in 2022.
Buy now, pay later (BNPL) payment method is
gaining momentum. The BNPL payment industry
in Asia is expected to grow by 45.3% annually to
reach USD201.9 billion by the end of 2022. The
momentum is set to continue with BNPL operators
expanding into new categories. Singapore is the
biggest user of BNPL payments which account for
5% of the country’s e-commerce spending in 2022,
closely followed by China (4%), India (4%) and
Indonesia (4%).
Box: Key BNPL Platforms in Asia
China’s BNPL business is dominated by Internet giants including Ant Group, Jingdong Finance
and Tencent.
A number of local and international brands have contributed to the booming BNPL market in
India, including Flipkart Pay Later, Amazon Pay Later, Paytm Postpaid, ePayLater and ZestMoney.
Participants in Indonesian BNPL market include a lot of local service providers such as Akulaku,
GoPayLater, Kredivo and Traveloka PayLater.
SPayLater and Atome are the major BNPL platforms operating in Singapore.
Source: FIS
Figure 18 E-Commerce Payment Methods in Asia
Cross-border mobile payment ecosystems
are being built across Asian countries. On one
hand, linkage has been actively strengthened
beyond borders. Singapore’s PayNow system
has been connected with India’s UPI, Malaysia’s
DuitNow and Thailand’s PromptPay. A QR payment
linkage has been established among Indonesia,
Malaysia and Thailand. Meanwhile, South
Korea has improved its partnership with various
applications including AlipayHK in China, GCash
in the Philippines, Touch’n Go in Malaysia and
TrueMoney in Thailand, which enables cross-border
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QR payments to more than 120,000 merchants. In
the initial stage, the partnership covers those areas
directly related to travelling such as taxi services,
duty-free shops, convenience stores and F&B chain
stores. The “Alipay+-in-China” (A+China) Program
makes it possible for users of 10 leading mobile
wallets in Malaysia, Mongolia, Singapore, South
Korea, Thailand, Hong Kong SAR and Macao SAR,
to use home e-wallets in the Chinese mainland,
covering a total population of over 175 million.
On the other hand, international organizations
have stepped in to facilitate real-time linkages
of payment systems in Asia. Facilitated by the
Bank for International Settlements, the Monetary
Authority of Singapore, Bank Indonesia, Bank
Negara Malaysia, Bangko Sentral ng Pilipinas
and Bank of Thailand inked a Memorandum of
Understanding in November 2022 to collaborate on
Regional Payment Connectivity (RPC) to support
faster, cheaper, more transparent, and more
inclusive cross-border payments. Including QR
codes and fast payment, the implementation of
RPC serves to support and facilitate cross-border
trade, investment, financial deepening, remittance,
tourism and other economic activities, as well as
a more inclusive financial ecosystem, ultimately
contributing to accelerated economic recovery and
inclusive growth in the region.
By country, Indonesia has become the
largest digital payment market in ASEAN. By
the end of 2022, the financial transaction value
completed on digital platforms is expected to reach
USD72.09 billion. The compulsory Quick Response
Code Indonesian Standard has been launched by
Bank Indonesia to accelerate digital transformation
and facilitate interoperable digital payment cards
and other mainstream financial services between
the country’s 65 million MSMEs and a large number
of poorly financed consumers. In Singapore, there
are now 5.5 million bank accounts registered with
PayNow which has processed S$46 billion worth
payments. Built on the FAST infrastructure, PayNow
has become a prevalent payment method, and
has been integrated into the payment gateways of
third-party payment solutions like Stripe and HitPay.
Moreover, DuitNow in Malaysia, PromptPay in
Thailand and UPI in India also offer convenient,
readily available instant mobile payment solutions in
Asia.
3.3.4 Digital technology has accelerated the
transformation of healthcare
Asia is primed for rapid healthcare change,
driven by shifting demographics, rising consumer
expectations, technological innovations, and
limited legacy health infrastructure. From 2015
to 2020, Asia’s venture capital and private equity
investments in digital health grew at a CAGR of
38%. As of 2020, Asia comprised 44% of global
venture capital/private equity investments in digital
health-USD6 billion of USD14 billion. Today, a
consumer-centric digital health ecosystem is
taking shape in Asia at a pace and scale never
seen before, touching the lives of more than one
billion people. At an estimated annual growth
rate of 22%, Asia’s digital health value is likely to
increase from USD37 billion in 2020 to USD100
billion by 2025, over 75% of which are created by
digital care services.
Source: 1MG; AliHealth; Alodokter; Halodoc; JD Health;
Ping An Good Doctor; Practo; WeDoctor
Figure 19 Number of Subscribers of Emerging Health
Platforms in Asia
Remote healthcare apps have catalyzed digital
health in Asia. During the Covid-19 pandemic,
Asia witnessed dramatically increased adoption
of telemedicine apps. In 2022, the usage of these
apps remained at a high level, far above that in
34 Boao Forum for Asia
2020. Data shows that8 between 2020 and 2022,
Thailand and the Philippines reported a sharp
increase of their monthly active users of remote
healthcare, growing by 11.4 folds and 8.8 folds
respectively. In Singapore, India and Indonesia,
remote healthcare is growing steadily, with 13.8,
11.2 and 9.9 active users for every thousand
residents on a monthly basis. In 2022, the number
of monthly active subscribers of remote healthcare
apps reached 257, much higher than 213 in 2021.
Among all the active users, 80% come from apps
developed by digital platforms, while the remaining
20% are contributed by the apps developed by
traditional healthcare providers.
Digital health has broadened access to
primary care. Many of the largest health ecosystem
players in Asia have rapidly grown by combining
tele-medicine and e-pharmacy services to
address the shortage of manpower. In China,
for example, Ping An Good Doctor’s initial value
proposition was allowing users to see a doctor
online in minutes rather than waiting in line at a
hospital for hours. Patients who need face-to-face
medical consultations can get a priority in booking
appointments at hospital. It then expanded into
e-commerce transactions, providing consumer
health products, generics, and health check-up
kits on its platform. By contrast, AliHealth began
with an e-pharmacy proposition in 2011, managing
drug sales on its e-commerce platform and then
expanding to home delivery of medications, provider
partnerships for teleconsultations, appointment
booking, and e-payments. Likewise in India, Practo
was launched as one of the first platforms to connect
hospital-based physicians to patients across the
country via video- and phone-based consultations,
then expanded into medicine delivery, electronic
health records management for hospitals, and
medical insurance services. In Indonesia, Halodoc
has emerged as one of the largest platforms for
patients to easily access general practitioner tele-
consults, pharmacy delivery, and home lab services
across more than 50 cities, addressing the lack of
easy access to primary care outside of major hubs
such as Jakarta and Surabaya.
Digital health has facilitated faster access
to acute care. An increasing number of hospitals
are seeking to establish digital “front doors” to
engage with patients before and after their visits.
Singapore has taken this model across its public
healthcare system, with its HealthHub application
serving as a single, integrated digital entry point
for all the citizens to make appointments, order
medications, and access vaccination records,
disease risk assessments, and other health
information. This model been widely applied in
China. By October 2022, China had established
more than 2,700 internet hospitals, receiving more
than 25.9 million visits. New digital apps related to
diagnosis and rehabilitation assistance, medicine
delivery and patient transportation and medical
robots are gaining popularity at a fast pace, while
new offerings such as livestreamed, interactive
parenting activities, infant and baby care sessions,
and parenting classes, are emerging one after
another.
Digital health has improved disease
management and monitoring. Following the
success of Livongo and Omada in the United
States, interest in digital chronic disease
management platforms has increased across Asia.
Among the largest examples are Medlinker and
ClouDr in China, both of which have focused on
building platforms to connect patients, physicians,
payers, providers, and pharmacies. Medlinker
has collaborated with 50,000 physicians and built
patient-management tools to address diabetes,
hepatic disease, and kidney disease. It also
offers e-pharmacy services in collaboration with
pharmaceutical companies. ClouDr has taken a
slightly different approach, establishing closer ties
8 Bain & Company
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to hospitals by building a software-as-a-service
platform for disease management and providing
prescriptions to patients who can collect drugs at
offline pharmacy chains.
Source: Arizton Advisory and Intelligence; BCC Research;
MarketsandMarkets; Mind Commerce; TechNavio
Figure 20 Market Size of Digital Healthcare in
Different Categories in Asia
3.4 Efficient and streamlined governance
systems enabled by digital tools
3.4.1 Evident trend towards digitization of
government services, initial innovations showing
promising result
E-government development continues to
demonstrate positive momentum. The average
“E-Government Development Index” (EGDI) in
Asia is 0.6493, ranking second globally after
Europe. Within EGDI categories, Asia leads with
51% of countries experiencing an increase,
indicating the accelerated integration of digital
capabilities into government management for
developing countries in the region. However,
around 45% (3.5 billion people) of the total
population of United Nations member states still
lags behind, underscoring the persistent global
digital divide. Over three billion people live in
countries where their EGDI falls below the global
average, with the majority located in Africa, Asia,
and Oceania.
Source: The United Nations
Figure 21 E-Government Scores of Asian Countries9
Compared to the pre-pandemic period,
there has been a significant improvement in
the provision of online services. In the initial
stages of the pandemic, governments across
Asia prioritized and strengthened their capabilities
for online public services and continuity. Most
countries, in various ways, utilized digital technology
to address the challenges posed by the Covid-19
pandemic and to maintain economic and social
stability. They gave high priority to offering online
services such as digital healthcare, emergency
response, social security, and digital education. This
expansion of online services effectively supported
social development and met public needs through
digital channels. It is noteworthy that, in 2022,
the countries experiencing continued growth in
online services were primarily developing nations.
Examples include the Democratic People's
Republic of Korea, Jordan, Turkmenistan, Laos,
Tajikistan, Mongolia, Myanmar, Nepal, Indonesia,
and Maldives, all of which saw an increase of more
than 10% in their online service scores.
There is a clear trend towards the digital
transformation of government services. Governments
are proactively developing innovative web
applications and embracing dynamic business
9 Palestine is not included here because no data is available.
36 Boao Forum for Asia
models to enable users to conduct transactions
online. An increasing number of countries are
pivoting towards offering citizens automated
and personalized services that are accessible
anytime and anywhere. Some governments are
leveraging government data to create decision
support tools and improve analysis, prediction,
and responsiveness to societal and citizen needs.
For instance, Jordan is actively implementing its
“Economic Modernization Vision”, which includes
the launch of eight smartphone and e-visa
government applications. Several public agencies
and departments have successfully completed
the development of internal electronic systems.
As of September 2023, a total of 960 government
services had been automated and digitized,
achieving a 40% online presence for government
services. In August 2023, the Ministry of Post
and Telecommunications of Laos introduced
the mobile app Gov-X as a key component of
its digital government strategy. The initiative
aims to enhance the accessibility, efficiency, and
transparency of government services, making them
more accessible to Laotian citizens, businesses,
and government officials. In 2021, Almaty in
Kazakhstan provided over 11 million health-related
services online, a stark comparison to just 100,000
services offline. Presently, approximately 97% of
the city’s services are available online. Additionally,
Almaty has introduced two proactive services:
for households with disabled members, the
government automatically offers discounts to water
and electricity bills without citizens having to apply;
and for eligible students, retirees, and disabled
individuals, the government will automatically issue
public transportation discount cards to them.
Continuous technological innovation is
reshaping the landscape of e-government
development. The Covid-19 pandemic has not
only altered the way people live and work but has
also created opportunities for the application of
new technologies and the convergence of various
disciplines. Virtual collaboration platforms facilitate
real-time communication between government
agencies and population groups, accelerating the
digital transformation of the government. Analytics
and AI are creatively employed in both e-government
and e-commerce, making digital technology
a crucial tool in the fight against the Covid-19
pandemic. Online education and office platforms
are increasingly empowering distance learning and
fostering interactive collaboration.
Box: ROK enhances smart public services with metaverse technology
As an economically advanced nation in Asia, South Korea boasts a high level of development
in information technology. Its capital, Seoul, initiated the electronic and digital transformation of the
government and the city as early as 1990. Today, Seoul has achieved remarkable success as one
of the global leaders in smart city development—thanks to its comprehensive, persistent, and multi-
level efforts, including initiatives like the “u-Seoul Plan”, “Smart Seoul 2015”, and “Global Digital Seoul
2020”, which were designed to promote the construction of computerization-oriented infrastructure,
real-time online connectivity of city services, public engagement and sharing.
On November 3, 2021, the Seoul Metropolitan Government announced the establishment
of a metaverse platform, providing innovative smart public services to citizens through an online
virtual world. As an integral part of Seoul’s future city planning outlined in “Seoul Vision 2030”, the
metaverse platform will leverage advanced technologies for the seamless integration of technologies,
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applications, and experiences across departments and sectors. Through this metaverse platform,
the city aims to enhance public services and well-being by offering convenience and improving
accessibility in various aspects of urban life, including transportation and transactions. Seoul
envisages becoming a “smart city of the future”.
The five-year project is estimated to cost KRW 3.9 billion. Over the three phases of this project,
the city government will establish a metaverse ecosystem encompassing all administrative services
related to the economy, culture, tourism, education, and civil complaints. The city will also promote
the widespread adoption of digital technologies, including AI, blockchain, and IoT, in various public
service areas such as housing, environment, culture and tourism, health, transportation, infrastructure,
and taxation. Through these initiatives, Seoul aims to catalyze technological transformation, enhance
comprehensive governance capabilities, nurture new drivers for economic growth, create additional
employment opportunities, improve citizens’ lives, and advance social innovation and sustainable
development.
3.4.2 Strengthened inter-country collaboration
propelling the acceleration of smart city
development
In recent years, urbanization has been picking
up the pace around the world. Concurrently, the
worldwide surge in digitization has propelled smart
city development into a megatrend. Asian countries
are leveraging digital technology extensively to
fast-track the growth of smart cities, fostering
enhanced connectivity and optimization across
diverse sectors. This has dramatically elevated
the efficiency, sustainability, and livability of
urban spaces, delivering maximum benefits to all
residents. It has also contributed to the construction
of cities that are safe, more interconnected, and
more sustainable.
Today, smart city development in Asia
encompasses a diverse array of aspects, spanning
from the digitization of urban infrastructure to
public services, environmental protection, and
social innovation. Smart city development
in Asian countries generally follows two
approaches. The first approach prioritizes
energy management and aims to equip cities
with sustainable development capabilities.
For instance, Japan’s smart city development
emphasizes energy efficiency, emissions reduction,
and resilience against natural disasters. The
second approach relies on digital technology
as the cornerstone for building smart cities.
More specifically, this can be further divided into
two sub-approaches. The first sub-approach,
exemplified by China and South Korea, deploys
application programs through technological means
to address challenges in urban development. The
second sub-approach is represented by Singapore,
a city-state whose economy is primarily driven by
information and communication technology and
finance. Given the strong association of these
industries with digital technology, Singapore
emphasizes a holistic approach in smart city
planning, while placing importance on urban,
industrial, and talent development.
Overall, Asia exhibits a diverse landscape of
smart city development.
Countries with modern digital technology
are experiencing faster growth in smart city
development. Advanced markets in Asia play a
crucial role in shaping the smart city landscape
in view of their robust digital and technological
capabilities. For instance, the Singapore
government utilizes technology to enhance
38 Boao Forum for Asia
urban sustainability, governance efficiency,
and residents’ quality of life. It has established
dedicated government departments, such as the
Smart Nation and Digital Government Group, for
planning, developing, and implementing smart city
solutions. Key strategic programs include digital
identity (Singpass) and the Smart Town Framework.
Similarly, China is driving innovative smart city
development. Major cities like Beijing, Shanghai,
and Shenzhen have adopted various digital
solutions to improve urban management, traffic
flow, and environmental monitoring. Technologies
such as 5G, the Internet of Things (IoT), and digital
twins are rapidly integrating into the fabric of
smart cities, providing high-quality infrastructure
to support intelligent solutions. In Seoul, South
Korea, extensive IoT infrastructure has been
deployed to monitor air quality, waste management,
energy consumption, and other urban activities.
The city is also promoting innovation in areas such
as smart transport systems and healthcare. In
Tokyo, Japan, smart traffic management and other
city systems have been implemented to improve
traffic flow and safety. In Israel, the urban-tech lab,
sandbox, and innovation center CityZone utilizes
both wired and wireless devices, including sensors,
controllers, and cameras, to collect urban data
that can help address various urban challenges,
ranging from traffic and mobility to infrastructure,
environment, security, safety and community issues.
These data are shared with startup companies and
municipal authorities, with CityZone serving as the
hub for designing smart city solutions.
Leading countries are also supporting the
smart city efforts of other Asian countries.
For example, South Korea has unveiled a support
program for overseas smart city projects, receiving
applications from over 20 countries. Approval
has been granted to 11 countries, including six
ASEAN members. South Korea has supported
smart city projects in Kota Kinabalu, Malaysia,
and Vientiane, Laos. Mitsubishi Corporation
of Japan has announced a joint venture with
Singaporean state investor Temasek Holdings
to develop a 100-hectare smart city in Jakarta,
the capital of Indonesia. The city’s operating
system will manage major city functions, including
security and maintenance of electricity, water, and
wireless services, while enabling residents to make
electronic payments and medical appointments via
smartphone.
An increasing number of Asian countries
are strategically planning or expediting the
advancement of smart city development.
Kazakhstan has a primary focus on infrastructure
development and the promotion of technological
progress. It prioritizes smart city initiatives in safety,
transport, housing, public services, education,
healthcare, and urban management. The country
has also introduced standards for assessing
and tracking smart city progress. In Vietnam,
a sustainable smart city development planfor
the2018-2025period and the Vietnam 2030 Vision
were adopted in August 2018. As of today, 54
out of the country’s 63 provinces and cities have
implemented smart city projects. Turkmenistan
officially initiated a multi-billion-dollar smart city
development project in July 2023, signaling the start
of construction of the first smart city in the country.
It is situated approximately 30 kilometers south of
the capital, Ashgabat. The smart city will feature
electric buses and cars, solar power generation,
and smart homes controllable via smartphone.
Source: Electronic government of the Republic of Kazakhstan
Figure 22 Internal Scoring of Smart Cities in
Kazakhstan
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Smart power solutions have become a
major area of focus for Asian countries in the
development of smart cities. Climate change and
the pursuit of net-zero emissions pose significant
challenges for economies across Asia, highlighting
the critical importance of renewable energy in
meeting the objective. Since 2018, ASEAN has
been laying the groundwork by conducting research
on smart grids to offer recommendations for
member countries to achieve the regional target of
23% renewable energy in the total power supply
by 2025. At the consumer level, the deployment
of small-scale solar panels is gaining traction, with
companies like Sunseap enabling individuals and
businesses to store and sell energy back to the
grid. The next crucial step, essential for a successful
transition away from fossil fuels, involves effectively
managing large-scale renewable energy generation
through smart power solutions.
3.5 Increasingly matured innovation and
entrepreneurship ecosystem
3.5.1 Asia’s vital role in the global digital
economy innovation ecosystem
Clusters of innovation are shifting eastward
towards Asia. According to the Top 100 Global
Innovators 2022 report10, Japan has the highest
number of innovators (35), followed by the United
States (18), China (14, including those in Taiwan),
Germany (9), France (8), and South Korea (5).
Preliminary data from the WIPO “Global Innovation
Index 2023” indicates that Asia hosts the highest
percentage of the top 100 science and technology
innovation clusters. China boasts a total of 24,
while Japan, South Korea, and India each have 4.
Additionally, other Asian countries such as Turkey,
Singapore, Iran, Israel, Saudi Arabia, Pakistan,
Syria, and Thailand also have innovation clusters
on the list. The latest data reveals that the world’s
top five science and technology innovation clusters
are all situated in East Asia: Tokyo-Yokohama,
Shenzhen-Hong Kong-Guangzhou, Seoul, Beijing,
and Shanghai-Suzhou. Compared to the previous
year, the three clusters with the most significant rise
in rankings in 2022 are all from China: Zhenjiang
(+15 positions), Hefei (+13 positions), and Wuxi
(+13 positions). Many Asian cities, as emerging
innovation clusters, are becoming attractive
destinations for advanced factors of production and
innovation, thus reshaping the global innovation
landscape.
Source: WIPO
Figure 23 Distribution of Top 100 Technology
Clusters in Major Countries (only those countries with
three or above clusters are listed here)
Asia is a critical component of the global
digital intellectual property ecosystem. In
2022, Asian countries contributed to 55% of
the total global patent applications, marking a
substantial increase from the 40% recorded in
2012. Notably, major Asian countries exhibited
exceptional performance, with China registering
a year-on-year growth of 0.6% to reach 71,500
applications, India experiencing a remarkable
25% year-on-year increase to 2,618 applications,
and South Korea achieving a 6.2% year-on-year
growth, totaling 22,000 applications. In terms
of technical domains, Asia stands out as the
10 The Global Startup Ecosystem Report 2022 (GSER 2022)
created by Startup Genome, an innovation policy advisory
firm based in the United States, in partnership with the Global
Entrepreneurship Network (GEN).
40 Boao Forum for Asia
global leader in the number of patents published
across various fields. Particularly in areas directly
associated with the digital economy, such as
computer technology, digital communication,
basic communication processes, audio-visual
technology, semiconductors, and information
technology management methods, the number of
patents obtained by Asia is tens of times that of
other regions. High-tech companies in Asia have
demonstrated stellar performance, with Huawei of
China securing the top position with 7,689 patents,
followed by Samsung Electronics of South Korea
with 4,387 patents, and Mitsubishi Electric of Japan
ranking fourth with 2,320 patents.
Table 1 Patents by WIPO technology field/by region
Technology domains Asia Europe Americas Middle East and Central Asia Africa
Electrical machinery, apparatus, energy 151,875 34,292 20,826 174 62
Audio-visual technology 68,650 8,161 13,983 28 17
Digital communication 102,593 19,986 39,792 124 19
Basic communication processes 10,510 3,326 4,034 17 7
Computer technology 227,971 24,159 64,379 233 43
IT methods for management 58,292 4,803 14,263 81 41
Semiconductors 66,278 8,025 13,494 81 7
Optics 52,284 9,530 9,926 53 7
Measurement 131,959 30,104 20,383 608 34
Analysis of biological materials 10,598 4,559 4,717 91 20
Control 55,254 10,217 11,421 84 21
Medical technology 77,108 37,220 47,268 276 91
Organic fine chemistry 34,946 16,545 13,559 174 25
Biotechnology 33,276 16,828 23,183 89 31
Pharmaceuticals 38,626 25,726 33,853 224 55
Macromolecular chemistry, polymers 34,053 8,749 6,318 102 16
Food chemistry 32,383 7,755 4,993 71 20
Basic materials chemistry 46,895 12,973 10,737 665 36
Materials, metallurgy 54,176 10,423 5,792 257 27
Surface technology, coating 34,095 7,580 6,003 78 6
Micro-structural and nano-technology 3,550 1,068 753 12 1
Chemical engineering 72,297 14,166 11,487 382 37
Environmental technology 49,558 7,737 5,544 197 12
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Technology domains Asia Europe Americas Middle East and Central Asia Africa
Handling 72,311 17,971 11,221 71 32
Machine tools 83,563 13,504 7,836 44 14
Engines, pumps, turbines 33,003 18,330 9,219 200 7
Textile and paper machines 32,934 7,661 4,668 17 4
Other special machines 80,405 22,683 17,225 143 89
Telecommunications 37,485 7,061 10,869 60 9
Thermal processes and apparatus 41,830 7,973 4,464 102 10
Mechanical elements 46,996 21,491 8,998 81 34
Transport 83,078 41,358 19,065 128 44
Furniture, games 52,871 11,260 10,642 54 36
Other consumer goods 37,846 13,954 9,022 70 18
Civil engineering 88,843 20,738 15,561 765 110
Source: WIPO
An innovation landscape has been created,
with front-runners leading the way and others
rapidly catching up. According to the WIPO Global
Innovation Index 2023 report, both Singapore and
South Korea are among the global top 10 innovative
countries, followed other Asian countries that rank
among the top 50—including, China (12th), Japan
(13th), Israel (14th), the UAE (32nd), Malaysia (36th),
Turkey (39th), India (40th), Thailand (43rd), Vietnam
(46th), Saudi Arabia (48th), and Qatar (50th). In
terms of rise in ranking, Mongolia (68th), Jordan
(71st), Nepal (108th), and Azerbaijan (89th) have
demonstrated considerable progress this year.
Over the past decade, Indonesia, China, Turkey,
India, Vietnam, the Philippines, Iran, Cambodia,
and Laos have been the fastest climbers among
Asian countries in the index. Vietnam leads the
world in high-tech imports, while the Philippines
holds a leading position in high-tech exports. Some
developing economies in Asia have beaten
expectations in innovation, including newly added
countries like Indonesia, Uzbekistan, and Pakistan.
Notably, Indonesia has made considerable
advances, securing its best ranking since 2012
(61st). The country holds a global leadership
position in entrepreneurship policies and culture,
and it has made significant advances in innovation
linkages and intangible asset intensity.
Source: WIPO
Figure 24 Global Innovation Index Scores of Asian
Countries
3.5.2 Great surge in unicorn companies and
venture funding
The distribution of unicorn companies
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shows a “China leads, India follows” pattern.
According to the Hurun Global Unicorn Index 2023,
Asia hosts 461 unicorns, 316 of which are based
in China, a number that is far higher than that of
other Asian countries. India, Israel, South Korea,
Singapore, Japan, Indonesia, Vietnam, the UAE,
the Philippines, and Turkey also have unicorns listed
in the index. The growth of unicorn companies has
been accelerated by the pandemic. Compared to
pre-pandemic levels, the number of unicorns from
each country has increased, with new entrants from
Asia totaling up to 212.
Source: Hurun Report, PitchBook Data
Figure 25 Number of Asian Companies in Hurun
Global Unicorn Index 2023
The growth of new unicorns is decelerating.
In 2022, the expansion of billion-dollar companies
in Asia slowed down, with only 84 companies
upgrading to unicorns. Among them, 52 originated
from China, 17 from India, and 7 from South Korea.
These 84 unicorn companies attracted a total
investment of USD 32.86 billion, constituting 27.8%
of global venture funding. Regarding valuation,
the latest estimates indicate that the combined
valuation of new Asian unicorns in 2022 was USD
171.3 billion, accounting for 25.7% of the global
total. This contrasts with the valuation of USD 404.4
billion for new Asian unicorns in 2021, representing
25.4% of the global total. Notable Asian newcomers
include the electric vehicle manufacturer GAC Aion
(China), gaming platform Games24x7 (India), and
digital finance platform Akulaku (Indonesia).
Source: PitchBook Data
Figure 26 Number of New Asian Unicorns in 2023
3.5.3 Digital literacy has become a strategic
imperative for improving the soft power of
digital economy
The evolving digital economy has raised
new requirements over occupational structure
and knowledge/skill sets. To advance the digital
transformation and increase the digital literacy of
students and the general public has become a key
trend of educational reforms across international
organizations and countries.
Asia has made digital literacy and skills a
focal area. With the support of a USD1.5 million
grant from Google.org, Google’s philanthropic arm,
the ASEAN Foundation has launched a two-year
ASEAN Digital Literacy Programme (ADLP) to equip
1,000+ trainers across ten ASEAN countries with
media and information literacy skills they need in
delivering training sessions. The programme also
includes other key interventions such as the creation
of a youth advisory group and the establishment
of an e-learning platform. Standing for Platforms,
Innovation, Professionalism, Experience, and Skills,
Huawei’s talent development model PIPES has
been established as a blueprint for digital talent
development, to deliver targeted talent programs
for individuals from all walks of life, including the
young generation, policy makers, ICT professionals,
business leaders and the general public. With talent
strategies at the core, the government of Singapore
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is striving to build a highly skilled labor force. On
one hand, the government offers a continuous
stream of training sessions to empower talent to
ensure that they can fit in the evolving business
needs and technological progress. For example,
as one initiative of SkillsFuture, the TechSkills
Accelerator (TeSA) provides employees with a wide
range of training courses to help them achieve
competencies for digital jobs and technology
positions. On the other hand, a lot of companies in
the country’s technology ecosystem have attracted
and introduced a large number of highly skilled
professionals from around the world. The country
has spared no effort in building a national talent pool
to provide local businesses with a stronger labor
force. In Azerbaijan, the Ministry of Education and
an international educational company Algorithmics
have collaboratively implemented the Digital Skills
project to improve the teaching of the subject
“Informatics”, develop students’ algorithmic thinking,
logical thinking, project building skills, and teach the
basics of programming to them. The project has
covered 250 schools in cities and districts such as
Baku, Sumgait, Ganja, Sheki, Shirvan, Shamakhi,
Lankaran, Bilasuvar, Mingechevir, Goychay,
Sabirabad, Shabran, Khachmaz, Salyan, Yevlakh
and Shamkir.
4. Outlook on the digital economy in
Asia
4.1 Multiple challenges to be addressed
Given the obvious gap in the maturity of
digital economy, Asian countries are different
from each other in terms of investment in digital
economy and choices of partners. A sharp digital
divide can be also observed between economies,
between industries and between urban and rural
areas. Moreover, there are universal disparities
between ambitious strategies and grim realities,
and there is still a long way to go before achieving
digital transformation. Therefore, Asian countries’
cooperation about digital economy remains
challenged in many ways.
Digital divide remains pronounced across
Asian economies. To promote industrial integration
and powerful economic growth with digital
technologies has become a vital measure for late-
developing countries to catch up with or even
leave behind developed countries. Asian countries
are rapidly developing their digital economy, but
are still far lagging behind developed countries
and are divided among each other when it
comes to digital maturity. Most Asian countries
have expanded investment and made progress
in digital technologies and infrastructure, but
the digital infrastructure has not been evenly
built, with an obvious gap in the application
of digital technologies. From a perspective of
trade cooperation, Asian countries are highly
complementary. Represented by China, those
digitally developed economies enjoy advantages
in cross-border logistics, digital payments and
digital services, and are able to meet the needs
of residents and enterprises in emerging markets.
The pandemic, however, has widened the digital
divide on various dimensions of technology, talent
and infrastructure. Another issue is that Asia is far
from reaching consensus on digital rules, posing
obstacles to regional integration and development
within Asia. In some economically under-developed
countries, the digital process has remained
sporadic and isolated. Without targeted, systemic
interventions, digital divide in these countries
will persist or even grow wider, thus hindering
the facilitation of digital economy under Asian
cooperation frameworks such as the Digital Silk
Road.
International digital governance standards
on cross-border data flow have not been established
or unified. Currently, there are still no universally
accepted digital governance rules in the world.
The digital governance landscape is fractured,
44 Boao Forum for Asia
regionalized and fragmented. In particular, various
security risks like personal information leakage,
digital platform monopoly and cyber attacks exist
in cross-border digital flows and transactions. In
major Asian countries, digitalization has outpaced
legislation and rule-making in the fields of digital
competition, e-taxation, cross-border data flow,
intellectual property rights, digital trade and digital
use. The competence of digital governance and
regulation varies greatly from country to country,
calling for well-defined, consistent governance rules
and regulatory policies. In the domain of digital
trade, for example, business models are generally
fast updated and iterated, as well as obviously
discrepant, which makes it hard to reach consensus
among Asian countries along the Digital Silk Road
about basic concepts such as digital flow, digital
trade and digital products. Therefore, there is no
basis for negotiations with regard to digital rules. In
this context, how to safeguard national sovereignty
in a digital era and how to boost economic
cooperation through digital technologies has
become a strategic topic that must be addressed in
co-building the Digital Silk Road in a sound manner.
Insufficient digital talent has restricted
the cooperation and development of digital
economy. Every technological revolution is a
fundamental change to productivity and relations
of production. Talents are required for the growth
of industries, and highly skilled professionals are
indispensable for the rise of industries. Against the
background of digital economy, digital skills have
become must-have competencies for workers and
consumers, and digital talents have become key
elements and essential backup for the development
of digital economy. As digital technologies are
penetrating various fields, companies will have
a stronger demand for digitally competent inter-
disciplinary talents. In Asia, however, digital talents
are in short supply because the nurturing of these
talents have been constrained by various factors
such as outdated cultivation models that fail to
serve industrial needs, inconsistent standards
for skills certification, incomplete and unevenly
distributed talent development systems. As a result,
it is challenging to increase the availability and
quality of digital talents and it is hard to support
the growth of digital economy. In a relevant survey,
most workers in Asia say they are not adept at
using digital technologies, indicating the shortage of
digital talents as one of the key obstacles to digital
economy. Therefore, addressing talent shortage is
an important task for every country for the moment
and for a long time to come.
“Leave no one behind” is still a great vision
to be realized. Impacted by various factors like
the pandemic, geopolitics, economic downturn
and the absence of technology revolution, most of
the countries in Asia have been poorly prepared
for persistent global crises. To reverse this trend,
they are required to improve infrastructure, and
strengthen city-level and regional partnerships
and enhance cooperation with international
organizations. They are also advised to support
the development of sustainable and digitally
resilient societies and ensure digital benefits for
all by proactively taking inclusive, diversified and
individualized measures.
4.2 Joint efforts for shared benefits of digital
economy
Amid the ongoing global changes and historic
transformation, the world today is increasingly
strained by economic downturn, which has
posed multiple challenges to global development.
Meanwhile, driven by an unstoppable trend of
peace, development, cooperation and mutual
benefits, Asian countries have enhanced their
cooperation in the field of digital economy and
aligned their development strategies in a joint
effort to create an open, inclusive, trusted and
collaborative digital economy ecosystem that seeks
common development, wealth and prosperity for all.
Enhancing the connectivity of information
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infrastructure by strengthening network construction
and research collaboration. Great efforts should
be made to advance the construction of optic
fibre cables, undersea cables and base stations to
increase the coverage of optical communications
in certain countries and drive the leap-frog
development of their optical communication
industry. Application of IPv6 technology can
be scaled up to support the construction of
“Digital Silk Road” and facilitate the connection
of Express Cloud Networking with more public
and private clouds in Asia and beyond to realize
end-to-end, inter-disciplinary deployment
among Asian countries. Network infrastructure
should be improved for the purpose of stronger
collaborations among Asian countries in the
domain of communications, the Internet and
satellite navigation, so as to explore how to expand
affordable Internet connection and connectivity to
achieve shared benefits of network. Moreover, it is
suggested that Asian countries should increase the
prevalence of 4G network, the application of 5G
network and the research of 6G network, advance
together the construction of 5G network, drive
the technological innovation of 5G, and expand
international cooperation on the development of
this technology. All these measures are expected to
strengthen connectivity among the Belt and Road
countries and elevate digital connectivity in Asia to a
new height.
Accelerating the digital transformation by
offering solutions, sharing best practices and
building dedicated parks. Concerted efforts should
be made to create a collaborative commercial
framework and ecosystem to grow digital
technologies, support industrial enterprises, SMEs
and start-ups in nurturing digital entrepreneurship,
and offer digital transformation solutions for the
sectors of manufacturing, agriculture, retail sales,
education, healthcare, tourism and professional
services. Governments, industries, education and
research institutions can build stronger partnerships
in smart agriculture, industrial Internet and digital
healthcare to promote the experience of leading
countries in such areas as industrial digitalization,
financial technology and sharing economy. The
new generation of information technology should
be integrated into power grids, water conservancy
projects, roads, ports and railways at a faster pace
to facilitate the development of smart grids, smart
water management, smart mobility and smart
ports. Digital parks serving the needs of economic
cooperation among Asian digital countries can be
established to create “virtual” parks and industrial
clusters that transcend physical boundaries and
promote online-offline integration.
Strengthening cooperation on international
governance rules by leveraging bilateral and
multilateral advantages in digital economy.
Multilateral mechanisms including the Belt and
Road Digital Economy International Cooperation
Initiative, Asia-Pacific Economic Cooperation,
Shanghai Cooperation Organization, Association
of Southeast Asian Nations, Central Asia Regional
Economic Cooperation, League of Arab States
and Digital Cooperation Organization can be
leveraged to accelerate the Digital Silk Road,
strengthen international strategic connectivity of
digital economies, and improve top-level design,
standards alignment and rule-making. Coordinated
development mechanisms for digital trade and
international trade governance mechanisms can
be created to strengthen multilateral negotiations
on digital trade. Multilateral and bilateral platforms
can serve as a good opportunity to discuss,
build and share a universal rules framework for
digital governance in Asia, and to accelerate
coordination and linkage of rules and standards.
Various stakeholders can be convened to
increase dialogues and exchanges on building
a collaborative mechanism for international data
security and protection, facilitating two-way cross-
border flow of data within Asia, and sharing
market opportunities and technological benefits
46 Boao Forum for Asia
arising from cross-border cooperation. In addition,
collective measures can be taken to put in place a
digital economy governance network across Asia,
contribute to a sound and effective regulatory and
governance environment, and unlock the potential
of Asia in digital economy.
Contributing to digital literacy improvement
and digital innovation with stronger policy
support. An internationally collaborative education
model can be explored for vocational training
service providers to nurture digital economy
talents with hands-on experience. Universities and
businesses can act as bridge builders between
industrial and educational communities to develop
inter-governmental, university-business collaborative
and targeted talent development models, and help
build an educational system that suits the needs
of Asian countries in advancing digital economy.
An integrated industry-academia platform can be
established to attract talents and commercialize
research outcomes. At the same time, great efforts
can be made to explore an innovation system
that is unique to Asia, build a multi-layer, cross-
disciplinary and customized support network for
digital innovation, pioneer a new service model that
combines application research and development,
technology transfer, startup incubators and venture
capital investments, and support companies in
exploring new business models and pathways to
industrialization.
Asia Digital Economy Report
47
Boao Forum for Asia
“Asia Digital Economy Report” is a report from the Boao Forum for Asia (BFA) that aims to provide a
comprehensive assessment of the development of the digital economy in Asia and offer a panoramic view
of the field.
Initiated and organized by the BFA, the report was authored by a team of experts from the China
Academy of Information and Communications Technology (CAICT).
Throughout the writing process, Secretary General Li Baodong of the BFA provided guidance in
various areas, and Chen Yanjun, Vice President of the BFA Academy, along with Research Assistant Yang
Lu, offered substantial support for the preparation and release of the report.
Under the guidance of Yu Xiaohui, President of CAICT, the report was completed with contributions
from the following team members. They are Vice President Wang Zhiqin and researchers Xin Yongfei, Sun
Ke, Wang Mingzhu, Jiang Ying, Chen A’nan, Feng Zekun, Geng Yao, Hu Yanni, and Zheng Anqi.
Due to the limited availability of materials for the preparation of this report, there may be some errors
or omissions. Any comments or corrections would be welcomed.
Author’s Note
Boao Forum for Asia (BFA)
Address: Floor 42, China World Tower A, No. 1 Jianguomenwai Avenue, Beijing, 100004, PRC
Tel: (8610) 65057377
Fax: (8610) 65051833
Website: www.boaoforum.org
China Academy of Information and Communications Technology (CAICT)
Address: No. 52, Hua Yuan Bei Road, Haidian District, Beijing, 100191, China
Tel: (8610) 62302883
Fax: (8610) 62304980
Website: www.caict.ac.cn
