Over the last years, Asia has undergone an impressive digital transformation. Large parts of the continent have turned from the world’s factory into a creative industry. Digitalization has become a driving force of social and economic change. This certainly means more opportunities for innovation and growth for many countries. However, on the flipside, if new technologies are in the wrong hands they can also be used as a mean to abuse power.
This article is part of our special on Digital Asia.
China’s social media platform Tencent Holdings has become bigger than Facebook and is now the fifth most valuable company in the world. India has left the United States behind in the race to become the largest source of digital talents. Indonesia has the fastest-growing number of internet users worldwide. Such headlines have become commonplace, illustrating how digitalization is driving change in Asia.
The region already accounts for half of the world’s 2.8 billion internet users, and by 2025 fast-changing technologies – including the mobile internet, the Internet of Things (IoT), cloud technology, 3-D printing, and advanced robotics – are expected to bring a massive economic boost to Asia. This indicates the impressive transformation that lies ahead for the continent.
Many Asian megacities have become vibrant ecosystems for startups and are attracting a growing number of young techies. Already, a third of the world’s app developers are based in Asia. Southeast Asia is an especially appealing testing ground for digital products, due to an open-mindedness toward new technologies and an infinite number of potential customers. Furthermore, companies can draw upon an immense workforce, which tends to be highly educated and culturally diverse.
These are ideal market conditions for innovative companies to prosper. In fact, these properties have made some Asian cities even more popular than some of the digital hubs in the Western hemisphere. This year, for example, according to the website Nespick, Singapore overtook San Francisco as the best startup city worldwide.
The success story of the digital economy
People’s lives in Asia are strongly based on digital technology, much more so than in other parts of the world. Digitalization is penetrating all aspects of daily activities in the private and public spheres. In China, facial recognition technology has permeated day-to-day business. At the Beijing Capital Airport, facial recognition helps to streamline boarding. Students can enter their university halls by blinking into a camera, and in some restaurants, you can pay for your meal with a simple smile to a scanner.
Digital trends are also heating up in less-industrialized Asian countries. In Pakistan and Myanmar, digital platforms make the search for healthcare professionals and the delivery of medicine to remote areas more feasible. They help provide information to pregnant women or arrange phone consultations. Such businesses not only create much-needed jobs, but also spur profound social change. People who were formerly excluded from social security benefits, due to their far-off locations or lack of official identification papers, can now claim social services or open a bank account with just a few clicks. Thus, the digital transformation of the business sector offers new opportunities for inclusive and sustainable development – and for developing Asian countries, it is a chance to leapfrog.
The success story of the digital economy is so promising that it is increasingly attracting the interest of political actors. “Digital first” has become a guiding principle for every government that takes itself seriously. Indeed, political leaders of Asian countries vie with one another in their glorious visions to build fully digitalized and smart nations. «Made in China 2025,» «Digital India or » Japan's «Society 5.0» are just a few of the prominent catchphrases that can be found in the various national strategies aiming to put their countries at the forefront of disruptive technologies.
To reach these ambitious goals, governments are sparing no efforts. The Japanese government's vision of a Society 5.0 for example aims to tackle challenges like the demographic change by placing more robots in retirement homes and therefore digitalising not just the economy but also other levels of Japanese society. In Singapore, a newly created Government Technology Agency plans to digitize key functions of governance and public life, including municipal services and the submission of a tax return.
Digital visions of authoritarian regimes
In addition, China recently announced that it will be stepping up its financial support – to more than $1.5 billion – to boost manufacturing innovation. This shows that Asian governments are pushing hard for digital technology. Whereas in Europe, some countries, such as Germany, are reluctant to make the necessary investments to improve online infrastructure, Asian decision-makers understand that better internet connectivity is an important advantage for local industry and may ultimately improve the lives of citizens.
Against this background, it is not at all surprising that Asia is leading in digital innovation and is ahead of other regions, including Europe and the Americas. Anyone who wants to learn about the latest digital trends must now look to the Far East. Travelers to Asia are often baffled when they see how technologically advanced certain areas are, and businesspeople come in droves to spot new, inspiring, and disruptive business models. However, not all that glitters is gold.
Many Asian countries see digitalization as a means to attract business and generate economic growth, but they also realize that new technologies are being used by governments to secure their own political power. In times of shrinking civic spaces, online media and digital technology are sometimes used as modern tools of state repression. Non-democratic states are especially prone to this abuse of power. The digital visions of authoritarian regimes entail the use of big data – collected by billions of sensors – and the evaluation of citizens’ internet profiles.
The Chinese political leadership is already making wide-ranging efforts to manage the internet within their national borders. A new cyber security law obliges foreign companies to store their data about customers and employees in China. Once it is centralized in one location, sensitive data would no longer be protected from government access. Other countries are following this example. Pakistan passed an internet law in 2016 that can be used to criminalize free speech online and gives unchecked powers to authorities. Such legal measures enable governments to control nearly every detail of their citizens’ environment.
The role of Civil society
What sounds like spooky Orwellian fiction could become reality in a few years, thanks to the rapid development of new technologies and the willingness of companies to comply. For fear of being banned from the lucrative Asian markets, large IT companies are providing governments with comprehensive data. The Indian government, for example, launched a Central Monitoring System in 2013, granting access to all communication data. This means that the Indian government can track and tap into all mobile telephone conversations, read all electronic messages, and see all the websites that an individual has visited. These developments pose a severe threat to privacy and democratic freedom of expression.
Digitalization in Asia offers both opportunities and risks. Although it allows people to be better connected and makes business processes more efficient, uncontrolled access to personal data allows companies and governments to intrude deep into the daily lives of citizens. It is therefore important that decisions about digitalization are not left solely to big corporations and governments. Civil society needs to play an active role in shaping our digital future. When privacy is at risk, the question of who owns data is crucial.
It does not suffice to grant people access to digital services when they have no control of the data being generated. Civil society organizations need to stress that privacy is no longer a mere etiquette or social norm in Asia, and that the protection of private digital data must be rooted in legal standards. If digital rights are treated as human rights, many of the innovative technologies in Asia could represent more than just means of amusement or tools of convenience – they could actually empower the people.
This article is part of our special on Digital Asia.