{
  "title": "Asia’s Digital Revolution",
  "sourceUrl": "https://www.imf.org/en/publications/fandd/issues/2018/09/asia-digital-revolution-sedik",
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  "summary": "With the right policies, this new wave of digital innovation and technology could be a new engine of growth and prosperity for Asia and the world.",
  "sections": [
    {
      "heading": "Overview",
      "content": "- A new wave of digital innovation in Asia—driven by advances in artificial intelligence, robotics, cryptography, and big data—is reshaping industries from retailing and banking to manufacturing and transportation.\n- With the right policies, this digital revolution \"could be a new engine of growth and prosperity for Asia and the world.\""
    },
    {
      "heading": "Asia at the forefront",
      "content": "- Asian firms leading digital services: Alibaba, Tencent, Baidu; ride-hailing and payments example: GO-JEK in Indonesia.\n- Regional dispersion: Japan, Korea, Hong Kong SAR, and Singapore are global trendsetters; many Asian economies are at the frontier relative to global peers; digitalization is accelerating even in relatively poor economies such as Cambodia and Nepal.\n- E-commerce growth and penetration:\n  - China accounted for less than 1 percent of global e-commerce retail transaction value about a decade ago, and today that share has grown to more than 40 percent.\n  - E-commerce penetration as a percentage of total retail sales: 15 percent in China, compared with 10 percent in the United States.\n  - E-commerce is growing fast in India, Indonesia, and Vietnam; Indonesian platforms include Bukalapak, Lazada, and Tokopedia.\n- Fintech scale:\n  - In 2016, mobile payments by individuals for goods and services totaled $790 billion in China, 11 times more than in the United States."
    },
    {
      "heading": "Economic impacts and productivity",
      "content": "- ICT growth outpacing GDP (2005-15):\n  - ICT growth averaged 15.9 percent in India, 13.7 percent in China and 7.1 percent in Thailand.\n  - Corresponding economic growth rates were 7.7, 9.7 and 3.5 percent.\n  - In Japan, ICT growth was \"almost quadruple GDP growth.\"\n- Digitalization and growth:\n  - Empirical finding for China: a 1 percentage point increase in the digitalization of China’s economy is associated with 0.3 percentage point of GDP growth.\n  - If countries are ranked by the ICT share of total patents, Asian economies occupy the top five slots.\n- Firm-level effects of e-commerce:\n  - Participation in online commerce is associated with a more than 30 percent increase in total factor productivity.\n  - Firms engaged in e-commerce also export 50 percent more.\n  - Study cited: McKinsey & Company finds that while 60 percent of internet spending in China is diverted from traditional retail, close to 40 percent represents new consumption.\n- Public finance gains from digital adoption:\n  - If Asian economies were to move halfway to the global frontier, VAT revenue could rise by 0.6 percent of GDP.\n  - For Association of Southeast Asian Nations members, estimated gains are 1.2 percent of GDP.\n  - For small Asian states, estimated gains are on the order of 2.5 percent of GDP.\n- Financial inclusion and poverty reduction:\n  - If all Asian economies with low financial inclusion moved to the level of Asia’s emerging-market frontier, Thailand, 20 million people could be brought out of poverty."
    },
    {
      "heading": "Employment, automation, and structural shifts",
      "content": "- Automation trends:\n  - Two-thirds of the world’s industrial robots are employed in Asia.\n  - Latest digital technologies—AI, robotics, 3D printing—could reshape global value chains and reduce competitiveness based on low wages, potentially prompting reshoring to advanced economies.\n- Employment effects:\n  - Cross-country analysis finds productivity-enhancing effects of robots may offset job destruction, but focusing only on Asia shows a slight negative impact on overall employment, particularly in heavily automated sectors like electronics and automobiles.\n  - Workers with medium-level education are more vulnerable to displacement than those with low or high education levels.\n  - Japan’s experience: with a shrinking labor force, increased robot density in manufacturing is associated with greater productivity and local gains in employment and wages; suggests China, Korea, and Thailand may benefit similarly under similar demographic trends."
    },
    {
      "heading": "Risks and challenges",
      "content": "- Risks to financial sector and stability:\n  - Fintech may undermine competition, monetary policy, financial stability and integrity, and consumer and investor protection.\n  - Leapfrogging countries have seen falling levels of traditional financial infrastructure, particularly bank branches.\n  - Tech giants (especially in China) have become key providers of financial services, putting competitive pressures on traditional institutions.\n  - Crypto-assets pose risks related to money laundering, tax evasion, circumvention of capital controls, and other illicit activity.\n- Platform-market risks:\n  - Digital platforms can produce winner-take-all dynamics, anti-competition concerns, and lock-in due to network effects.\n  - Platform transactions can enable tax base erosion (examples: peer-to-peer platforms such as Airbnb, Uber, GO-JEK, Grab, and Tujia can allow transactions to avoid or evade taxes).\n- Structural risks:\n  - Potential for rising structural unemployment, especially among older and unskilled workers, if displaced workers lack alternative opportunities, with the potential to increase inequality."
    },
    {
      "heading": "Policy recommendations and priorities",
      "content": "- Key policy areas to harness digital dividends:\n  - Revamp education to meet demand for more flexible skill sets and lifelong learning, and provide new training especially for the most adversely affected workers.\n  - Reduce skill mismatches between workers and jobs.\n  - Invest in physical and regulatory infrastructure that spurs competition and innovation.\n  - Address labor-market and social challenges, including income redistribution and safety nets.\n- Governance and cooperation:\n  - Regional and international cooperation is important given the global reach of digital technologies.\n  - Societal willingness to support those left behind determines how fast innovation can proceed while ensuring broadly shared benefits.\n- Overall policy objective:\n  - Strike the right balance between enabling digital progress and addressing risks so that the digital revolution becomes an engine of growth and prosperity rather than a source of widening inequities.\n\nAsia’s Digital Revolution — TAHSIN SAADI SEDIK, F&D Magazine, September 2018\n\n---\n\n Content in this bundle\n\n- الثورة الرقمية في آسيا\n  - الثورة الرقمية في آسيا (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - الثورة الرقمية في آسيا (PDF){rel=\"external\" type=\"application/pdf\"}\n- Asia’s Digital Revolution – IMF Finance & Development Magazine | September 2018\n  - Asia’s Digital Revolution – IMF Finance & Development Magazine | September 2018 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Asia’s Digital Revolution – IMF Finance & Development Magazine | September 2018 (PDF){rel=\"external\" type=\"application/pdf\"}\n- Révolution numérique en Asie\n  - Révolution numérique en Asie (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Révolution numérique en Asie (PDF){rel=\"external\" type=\"application/pdf\"}\n- Цифровая революция в Азии – Финансы и развитие – сентябрь 2018 года\n  - Цифровая революция в Азии – Финансы и развитие – сентябрь 2018 года (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Цифровая революция в Азии – Финансы и развитие – сентябрь 2018 года (PDF){rel=\"external\" type=\"application/pdf\"}\n- 亚洲的数字化革命 -《金融与发展》- 2018年9月号·第55卷·第3期 - 国际货币基金组织季刊\n  - 亚洲的数字化革命 -《金融与发展》- 2018年9月号·第55卷·第3期 - 国际货币基金组织季刊 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - 亚洲的数字化革命 -《金融与发展》- 2018年9月号·第55卷·第3期 - 国际货币基金组织季刊 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/fandd/issues/2018/09/asia-digital-revolution-sedik"
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    "Authors: TAHSIN SAADI SEDIK",
    "Published: September 1, 2018",
    "A new wave of digital innovation in Asia—driven by advances in artificial intelligence, robotics, cryptography, and big data—is reshaping industries from retailing and banking to manufacturing and transportation.",
    "With the right policies, this digital revolution \"could be a new engine of growth and prosperity for Asia and the world.\"",
    "Asian firms leading digital services: Alibaba, Tencent, Baidu; ride-hailing and payments example: GO-JEK in Indonesia.",
    "Regional dispersion: Japan, Korea, Hong Kong SAR, and Singapore are global trendsetters; many Asian economies are at the frontier relative to global peers; digitalization is accelerating even in relatively poor economies such as Cambodia and Nepal.",
    "E-commerce growth and penetration:",
    "Fintech scale:",
    "ICT growth outpacing GDP (2005-15):",
    "Digitalization and growth:",
    "Firm-level effects of e-commerce:",
    "Public finance gains from digital adoption:",
    "Financial inclusion and poverty reduction:",
    "Automation trends:",
    "Employment effects:",
    "Risks to financial sector and stability:",
    "Platform-market risks:",
    "Structural risks:",
    "Key policy areas to harness digital dividends:",
    "Governance and cooperation:",
    "Overall policy objective:",
    "**الثورة الرقمية في آسيا**",
    "**Asia’s Digital Revolution – IMF Finance & Development Magazine | September 2018**",
    "**Révolution numérique en Asie**",
    "**Цифровая революция в Азии – Финансы и развитие – сентябрь 2018 года**",
    "**亚洲的数字化革命 -《金融与发展》- 2018年9月号·第55卷·第3期 - 国际货币基金组织季刊**"
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