In today’s age, many countries are struggling to narrow the digital divide despite growing investments in ICT ecosystems. Furthermore, the gap is widening as digital ecosystem players struggle to keep up with rapidly evolving technology. For a country to remain competitive in the global economy, it must embrace digital innovation.

In global indexes of innovation, entrepreneurship, and technology, the Asia-Pacific region includes both high-ranking performers and some of the worst performers, and the digital innovation divide is widening for many nations. ICT-centric innovation ecosystems may help towns, cities, and nations achieve digital transformation by supporting economic inclusiveness, positive externalities, and long-term prosperity.

Despite the obstacles of inadequate access to ICTs, overburdening legislation, and a lack of suitable ICT infrastructure in the region, existing best practises may be leveraged to speed digital transformation and serve as a foundation for improved policies in nations where gaps have been identified. Countries in the area can develop their digital innovation ecosystems and become global leaders by recreating and amplifying best practise and sharing regional and global information, skills, and experience.

This report by the International Telecommunication Union (ITU) named “Regional Good Practices : Accelerating innovation, entrepreneurship and digital transformation in the Asia-Pacific region” provides a summary of the Asia-Pacific region’s innovation capability through ICT-centric innovation activity, as well as insight into how excellent practise may help Member States increase their capacity to incorporate ICT innovation into development objectives.

The research employs worldwide indices to track the present health of the innovation ecosystem, including characteristics of growth, gaps, and disparities. The data from these primary indicators was analysed to develop an ICT-centric innovation performance monitor that provides a comparative assessment of innovation ecosystems within and across nations in the area, as well as a threshold for decision-makers to act.


Vision and strategy

A large number of countries have articulated and codified a clear vision for digital transformation, and several have commenced implementing strong strategies to achieve ambitious objectives. According to the 2020 Global Innovation Index, the Asia-Pacific region is represented well in the category of top ten innovation countries by income levels. They include Singapore and the Republic of Korea (high income), China, Malaysia, and Thailand (upper-middle income), India, Viet Nam, Philippines, Mongolia, and Indonesia (lower-middle income), and Nepal (low income).

The following represents a small sample of digital transformation visions articulated throughout the region.

  • Thailand 4.0 is a collection of policies aimed at transforming Thailand into an innovative, value-based industrial model with a vision to elevate Thailand into a high-income country13. To accomplish this, the economy is to be entirely digitized and led by digitalized organizations. The current economy is heavily reliant on manufacturing designed elsewhere that impedes advancement to a higher income level. The intention of Thailand 4.0 Policy is to foster creativity, research and development of advanced technologies within Thailand to break this reliance. Pursuant to Thailand 4.0, ten industries have been targeted for accelerated development during the next 20 years. Five of these industries currently exist. They are automotive, intelligent electronics, agriculture and biotechnology, food processing, and high wealth and medical tourism. The five new advanced industries targeted for development include software, robotics, aviation and logistics, comprehensive healthcare, and biofuel and biochemical industries. In addition to targeted industries, additional policies can be categorized into two categories, digital infrastructure and skill formation.
  • Making Indonesia 4.0 is an integrated roadmap for Indonesia’s strategy to enter the fourth generation of industry revolution17. The roadmap is based on an acknowledgment that for Indonesia to remain competitive, it needs to fully utilize ICT in the industrial sector. This not only includes the production process but across the entire industry value chain promising the creation of new business models and digital innovation. The development of five key technologies – Internet of Things, artificial intelligence, human-machine interface, robotic and sensor technology, and 3D printing – is prioritized to support the development of Industry 4.0. Numerous strategies are to be aligned with the roadmap that will require collaborative actions among multiple stakeholders in both the public and private sectors. The roadmap consists of the following 10 national priority strategies: reforming the flow of materials; industrial zone redesign; improvement of human resources; empowerment of micro, small and medium enterprises; incentives implementation on technology investment, formation of innovation ecosystems; attracting foreign direct investment; harmonization of policy and regulations; building the national digital infrastructure; and accommodating sustainability standard. Successful implementation is intended to enable Indonesia to attain a net export rate of 10 per cent, double the labour productivity rate over labour costs, and allocate 2 per cent of GDP to R&D and technology innovation fields (seven times higher than current allocation).
  • The Myanmar Digital Economy Roadmap 2018-25, published in 2019, aims to improve Myanmar’s low regional rankings on four indicators of digital readiness: ICT development, e-government development, network readiness and cybersecurity18. This is to be accomplished by accelerating the use of digital technology in government, trade and investment as well as developing digital skills and encouraging innovation. The roadmap consists of 4 pillars, a 6-plus-1 strategy, 9 priority sectors, 14 goals, 32 short-term action plans, and 6 longer-term plans. Digital advancement is expected in education, healthcare; agriculture/fisheries and livestock; tourism and hospitality; manufacturing; SMEs; financial services, technology and start-up ecosystems, digital trade and transportation/logistics. Longer-term plans include policies to support e-commerce, online payments, tax incentives and cybersecurity. The following are just 5 of the 14 roadmap goals to be achieved by 2025: mobile subscriptions to hit 55 per cent of the population; Internet usage to increase to 50 per cent; digital transformation across business sectors to increase by 30 per cent; increase SME use of digital technologies by 50 per cent; and raise digital financial service transactions to 30 per cent. A Digital Economy Development Committee will oversee the implementation of the roadmap.
  • Malaysia 5.0 is a new vision19 called for by the chair of the Malaysia Digital Economy Corporation (MDEC)20 for Malaysia to compete in a world of disruptive technology and serve as a springboard into the ASEAN region. For Malaysia to transform into a highwage, knowledge-based economy envisioned in the Shared Prosperity Vision (SPV) 2030, innovation must be encouraged, the workforce must be re-tooled, and investment incentivized. Malaysia 5.0 embraces the concept of Society 5.0, where authority is decentralized and divisions de-emphasized, where the needs of a human-centred society converge through technology, and a designated hub interconnects companies in Malaysia to the rest of the world, with strong regulatory and strategic oversight and direction from MDEC. Numerous ongoing and newly announced programmes will be aligned with this designated hub. Malaysia 5.0 can contribute to a more sustainable and circular economy.

This selection of ICT, technology, and entrepreneurship strategies demonstrates commitment to a thriving, ICT-centric ecosystem in the Asia-Pacific region. It is noteworthy that the underlying basis for the above visions and strategies are quite varied. Some are based on accomplishing specific digital transformation objectives, a few prioritise specific industries, and others have a more philosophical basis centred around fundamentally transforming society with emerging technologies. The manner of implementation is varied as well, ranging from a collaborative approach pursuant to a broad framework and overarching objectives, to a more centralised approach driven by a designated lead agency.

ICT-centric innovation performance

The information in Table 2 demonstrates the performance of the three engines of growth in countries in the Asia-Pacific region:

Green indicates strong performance and presence of good practices. The threshold was set for a country in the top quartile (top 25 per cent) based on the overall index ranking.

Yellow indicates insufficient performance but presence of some good practices. The threshold was set as a country within the middle quartiles of the ranking (between 26 and 75 per cent).

Red indicates poor performance with no or very few good practices. The threshold was set as a country falling within the bottom quartile (bottom 25 per cent).

The table is evenly distributed with green, yellow and red indicators, showing the presence of good practice, where some countries are on the verge of digital transformation, and where others continue to struggle with insufficient enablers.

Infrastructure and programmes

A key enabler for digital transformation is the hard and soft digital infrastructure that permits end-to-end information and communication systems to operate. Two sub-pillars within the 2020 Global Innovation Index serve as proxies to assess hard and soft infrastructure. The ICT infrastructure sub-pillar measures ICT access, ICT use, government online services, and e-participation. It offers an excellent means to assess hard infrastructure. The business sophistication innovation linkages sub-pillar measures university/industry research collaboration, state of cluster development, gross expenditures R&D (GERD), joint venture-strategic alliances, and patent families.

These measurements help assess the soft infrastructure. According to the 2020 Global Innovation Index, there were six countries placed in the AsiaPacific region top 20 when measuring the ICTs sub-pillar. They include Republic of Korea (2nd), Singapore (7th), New Zealand (8th), Japan (10th), Australia (14th) and Hong Kong (China) (17th). However, the majority of the remaining 17 countries in the ranking received low scores (average ranking of 83) suggesting a large gap in hard infrastructure capabilities in some countries in the Asia-Pacific region. In assessing soft infrastructure the innovation linkage rankings were led by the same six countries that topped the ICT rankings: Republic of Korea (16th), Japan (17th), Singapore (18th), Australia (20th), Hong Kong (China) (25th), and New Zealand (29th). However, the gap is much less pronounced because none of these countries were in the top 15.

Singapore ranked highly in both hard and soft infrastructure indices. Under ICTs it took 2nd place in government online service, 6th ICT access, and 13th in e-participation. It scored well in three innovation linkages and was ranked 6th in university/industry research collaboration, 9th state of cluster development, and 11th in joint venture-strategic alliance deals.

Malaysia ranked highly in several of the soft infrastructure indicators of the 2020 Global Innovation Index. Malaysia scored a rank of 7th in state of cluster development, and 14th in university and industry research collaboration

Despite an impressive showing in both soft and hard infrastructure rankings by a few countries, the gap in hard infrastructure between the top few countries and other countries in the region is pronounced. As advanced technologies, which rely heavily on strong hard infrastructure such as IoT (Internet of things) and AI (artificial intelligence), become more prevalent and critical to the competitiveness of individual countries, this hard infrastructure divide could further widen the divide in digital transformation implementation. Without a solid base of hard infrastructure, it will become difficult for many countries in the region to fully leverage the strength of their soft infrastructure capabilities and supply the numerous technology clusters throughout the region with local talent. For those countries with capable soft infrastructure and lack of hard infrastructure, a brain drain remains a real challenge. Further examination at the country level could reveal a large divide in hard infrastructure between urban and rural areas. Without basic access to ICT and electricity, addressing digital literacy and inclusion is daunting.

The full report can be accessed here.