The Economic Research Institute for ASEAN and East Asia (ERIA) has officially launched its inauguration One white paper on ASEAN startups with the ERIA Digital Innovation and Sustainable Economy Center (E-DISC) on the ASEAN Business and Investment Summit (ABIS) 2024. Titled “Towards an ASEAN innovation ecosystem: building start-ups for inclusive and sustainable economic development”, the report focuses on the important thing role of innovation and start-ups in driving sustainable economic growth and social progress across ASEAN.
The report highlights the importance of supporting inclusive economic growth and maintaining ASEAN’s global competitiveness because the region recovers from the economic impact of Covid-19. Indonesia, as ASEAN’s largest economy, has made significant progress in developing its digital economy, improving access to basic services resembling healthcare. However, the report highlights that challenges remain, resembling a shortage of qualified specialists, especially in advanced technologies, and barriers to investment. Limited funding and technology research also make it difficult to develop and retain IT and AI professionals.
“Innovation and entrepreneurship are the cornerstones of sustainability and competitiveness in today’s digital economy. ERIA is proud to contribute to ASEAN’s development by providing research that helps shape the policy environment necessary for these key success factors,” said Tetsuya Watanabe, President of ERIA, emphasizing the importance of innovation for ASEAN’s future.
The report highlights how startups can play a big role in promoting sustainable development in keeping with the United Nations Sustainable Development Goals (SDGs). Through a comprehensive evaluation of current challenges and opportunities, it provides practical recommendations to strengthen the startup ecosystem across ASEAN, which is important for increasing productivity, creating jobs and solving social challenges.
Dr. Giulia Ajmone Marsan, director of start-up and integration programs at E-DISC and lead creator of the One ASEAN Start-up white paper, emphasized the urgent have to transition to a knowledge-based economy: “Innovation and entrepreneurship are essential conditions for long-term sustainable economic growth in ASEAN. While ASEAN’s young population will proceed to be a driving force for innovation and start-up creation over the subsequent decade, policymakers must seize the chance now to transition to a knowledge-based economy with none delay and putting innovation and entrepreneurship at the highest of the regional economic integration agenda “
“For ASEAN, startups represent the greatest opportunity to leapfrog any country’s economic and social development. However, achieving this requires a comprehensive approach with close cooperation between the public and private sectors. Moreover, there is not much time to take advantage of this opportunity. I hope this white paper will serve as a catalyst for active discussions between the public and private sectors on what is needed to make progress,” said Hiroshi Ishikawa, Special Advisor to the President of ERIA on Digital Innovation.
The E-DISC ERIA platform was created in 2023 to support evidence-based collaboration and policymaking. The report calls on ASEAN leaders to act on the recommendations presented, unlock the total potential of their digital economies and create a thriving startup ecosystem that may drive economic prosperity and innovation. The ultimate goal is to construct a more inclusive future for the region’s residents.
The report’s key findings highlight the urgent have to prioritize the shift towards a knowledge economy. The development of high-growth firms, especially start-ups, is seen as crucial to overcoming the “middle-income trap” that many ASEAN countries face. Indonesia, despite its strong domestic market, lags behind its ASEAN neighbors in R&D spending and scientific output, reflecting a key opportunity area. Improving these indicators shall be crucial for the country’s further economic growth.
The report also highlights the importance of context-specific innovation policies, given the varied economic conditions across ASEAN member states. For example, innovation in sectors resembling halal agricultural technology in Indonesia shows how a region’s cultural diversity can act as a strong catalyst for innovation. ASEAN must leverage this diversity as a strategic asset by encouraging linkages and collaboration amongst innovation hubs across sectors.
Among the report’s key recommendations is a call for a holistic approach to the event of the start-up ecosystem. This includes increasing access to capital, particularly in less developed countries resembling Cambodia and Laos PDR, and ensuring that financing isn’t overly concentrated in large cities resembling Jakarta. Improved market access through ASEAN economic integration can also be essential to scale up startups. The report also calls for policies to support the event and retention of talent, which is essential to innovation and entrepreneurship.
Through these joint efforts, ASEAN can create an enabling environment for innovation, economic growth and social inclusion, ensuring the well-being of all its residents.
