Digital entrepreneurship has the potential to become a major engine of growth in these markets. In this context, policy makers will have a critical role to play in creating a conducive environment for them to flourish
During COVID-19, the Internet and digital tools significantly cushioned the adverse impact of the pandemic on entrepreneurial activity, enabling business owners to go online to sell their products, communicate with their workers, and meet their business partners. For many, the Internet served as a lifeline, allowing for business continuity, and preventing them from shutting down entirely.
In Indonesia, digital entrepreneurs have been particularly active in food delivery, while in Malaysia, it is drone technology. Singapore, meanwhile, excels in finance technology, being home to 1,000+ fintech firms, the report notes.
Singapore is the only Asian country to make it into the “leaders” group and is followed by the US, Sweden, Denmark, and Switzerland.
Moving forward, digital entrepreneurship could be an engine of sustained growth in Asia but that will require institutions and policymakers to establish a conducive environment.
Though the report notes that policymakers have little direct influence on entrepreneurship, they can have an impact on how individuals weigh entrepreneurship against other pursuits.
This can be done by stressing the positive role of entrepreneurship in general education curricula, or through specific policies such as incentivizing universities to encourage entrepreneurship among students.
Digitally underdeveloped economies tend to have legal frameworks that adapt too slowly to rapidly evolving digital business models. Singapore, Malaysia, and South Korea, which ranked high in terms of regulatory adaptability in 2019, were also found to be Asia’s top three digital entrepreneurship ecosystems in 2021, showcasing the connection between the regulatory framework and entrepreneurship.
Supporting digital entrepreneurship is particularly critical at a time when rapid economic growth is transforming Asia into a predominantly middle-income region. From this stage forward, sustaining growth will become harder, making innovation a critical growth driver.