Digital Innovation
15 November 2018
Study on Micro, Small, and Medium Enterprises (MSMEs) Participation in the Digital Economy in ASEAN

As ASEAN advances to become the worlds fourth largest economy by 2030, it is undergoing a transition marked by a demographic shift to a younger population, a rising middle class, and rapid adoption of technology. With many mobile-first markets in the region, ASEAN is expected to see rapid increase in the use of technology which would contribute to the growth of its digital economy by 6.4 times, from $31 billion in 2015 to $197 billion by 2025. The digital economy, therefore, is a key factor driving the growth of the regions economy.

This study seeks to gain a fundamental understanding of the status of the adoption of digital technology by Micro, Small, and Medium Enterprises (MSMEs), the common digital tools used, and how deeply embedded digitalisation is in their business operations. Subsequently, the study explains the key challenges faced by MSMEs in their digitalisation process. It also examines current approaches adopted by existing digital platformers and AMS governments to support the adoption of digital technologies by MSMEs and assesses the overall effectiveness of such efforts. Finally, the study suggests possible policy programmes to effectively support MSMEs to overcome such challenges.

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