Digital economy integration in Asia and the Pacific: Insights from DigiSRII 1.0

Abstract

This paper presents the results from using the Digital and Sustainable Regional Integration Index version 1 (DigiSRII 1.0) framework of ESCAP (2020b) to uncover digital economy integration trends across the Asia-Pacific region. The results show that Asia and the Pacific has made good progress with regard to conventional digital economy integration, especially because of the significant improvements in the digital economy infrastructure and liberalization of trade of information and communications technology (ICT) goods. However, capacity-building of the workforce and investment in infrastructure are required to bridge the digitalization gaps among the digitalized economies in the region. Moreover, the fairly low regulatory uniformity among regional economies further highlights the importance of regional regulatory harmonization in order to foster regional trade in digitally enabled goods and services. From a sustainable development perspective, inclusivity and equity of access to digitalization and required infrastructure remain key challenges. While Internet penetration in the region has been rising, female participation in the digital economy has remained relatively low in general and extremely low in lowincome economies. In addition, there is room to enhance cybersecurity in most Asia-Pacific economies. Regional digital policies should focus on harmonizing data protection protocols and building a safer network of servers that would promote economic activity and enable sensitive matters to be conducted online. Fostering a more inclusive digital transformation may considerably boost network-effects and accelerate the transition to a competitive and sustainable regional digital economy.