While the global coronavirus continues to have significant macro-level political and economic impacts on the Asia-Pacific, it is also likely to affect key industries. Among the most notable ones is the digital domain, where COVID-19 could reshape interactions between various actors across several levels in the region.
At the outset, it is important to recognize that while the digital domain may have clear contours, it is often loosely used as a catch-all phrase for a series of developments, industries, and technologies across the region, be it the fourth industrial revolution, artificial intelligence, the Internet of Things, or e-commerce. It is also a source of both opportunities – including the digital economy or increased technological inclusion – as well as challenges such as the exploitation of digital tools by authoritarian governments and nefarious nonstate actors or the increased regulation of cross-border data flows.
Over the past few years, Asia’s digital landscape has continued to be powered by a series of broader, longer-term trends. These include Asia’s rising share within global economic output, a growing and more empowered Asian middle class, the continued regional battle between various political and economic models of governance, and rising geopolitical competition between the United States and China.
Viewed from this broader perspective, COVID-19 is among a series of developments that will shape the future of Asia’s digital landscape. The focus thus has understandably been on short-term effects, be it how digital tools may have helped slow the spread in key countries like Taiwan and South Korea, whether COVID-19 will boost the adoption of certain industries such as digital payments, or individual deals that continue to occur in key markets like India and China. But though the longer-term picture may still be unclear as of now, the bigger question is how COVID-19 could recalibrate wider trends in Asia’s digital landscape at various levels.
The first place to look is at the subnational level and how COVID-19 may reshape the relationships within countries between the state, the market, and the individual. While the trend of a growing, empowered Asian middle class disrupting how governments and companies work is likely to persist beyond the coronavirus, we could nonetheless see changes in more specific areas such as the balance of power between influencers and the shaping of narratives. We are already seeing signs of this, with the use of digital tools to threaten press freedom or reshaping the dynamics of peace and conflict.
Moving to the national level, what governments do and don’t do will continue to be important to watch in the digital domain. Economically, how the regulatory environment plays out in key Asian markets will be a key dimension of this, whether in general such as the relationship between the Japanese government and companies or with respect to more specific developments such as Indonesia and GR-80 on e-commerce. But looking to the political and security domains, governments will also have to deal with increasing digital challenges within and beyond their borders, including cyberattacks from state and nonstate actors and digital tools being used to power disinformation campaigns.
The regional level will also be key in assessing how COVID-19 will impact the Asia-Pacific’s digital landscape. Some of the focus will be on established patterns of cooperation in the digital domain, be it region-wide firm activity or intergovernmental collaboration through the Association of Southeast Asian Nations (ASEAN) in areas such as smart cities. But some newer instances of collaboration will be important to watch as well, including at the minilateral level. A case in point is the recent conclusion of the Digital Economy Partnership Agreement (DEPA) between Singapore, Chile, and New Zealand earlier this year.
Finally, COVID-19 has reinforced the importance of the international domain as well, which also impacts the digital domain the Asia-Pacific. Of course, macro-level trends driven by states, such as U.S.-China competition or the state of the global economy, will continue to exert a significant influence through 2020 and beyond. But how other players adapt to the international context will be a key question as well. Institutions such as the World Trade Organization can affect how rules in areas such as digital trade are shaped, while companies can also help power innovative solutions in areas such as online education and digital payments where familiar divides remain in the region.
Of course, with the general effects of COVID-19 themselves still playing out, how exactly it will affect the specifics of Asia’s digital domain remains to be seen. And even as we are focused on the coronavirus’ macro- and micro-level effects, we should also be asking broader questions with respect to the digital domain, such as the ability to leverage tools such as artificial intelligence to manage future pandemics as well as what kind of conditions can better facilitate the management of digital transformation. Those will be the sort of enduring questions that persist even after the pandemic subsides and Asia’s ongoing digital transformation continues.