Thailand introduced the Eastern Economic Corridor (EEC) initiative to transform three Thai provinces into smart cities during the 2019 ASEAN Summit. This move has proved to be a successful one, one report notes.
The EEC was established to create a centre for trade, investment, regional transportation, and a strategic gateway to Asia, with Thailand confident that the move would promote a seamless ASEAN.
Under its Thailand 4.0 model, the country is working to achieve 100 smart cities by 2022, a goal that is well on its way to completion especially now that the Digital Economy Promotion Agency (DEPA) and the City Possible global network inked an agreement.
Pioneered by an American multinational financial services corporation, 27 Thai smart cities have been inducted into the City Possible program which is designed to make technology work for people by aligning key stakeholders to address urban issues.
The corporation’s new public-private partnership model, City Possible, is focused on meeting the needs of people in cities.
It provides members unrivalled access to a global community of urban leaders, businesses, NGOs and academics and is regularly invited to a series of knowledge-exchange forums where participants identify common challenges, exchange learnings and establish holistic urban solutions.
The focus on smart cities is a core pillar of the government’s Thailand 4.0 initiative which aims to transform Thailand into a high-income nation with vastly improved quality of life in urban centres.
The Senior Executive Vice President of DEPA stated that as a country that relies on the industries of agriculture and tourism, Thailand wants smart cities to be the ecosystem to promote both of these, which in turn will afford to close the income gap and accelerator much-needed growth in the economy of the country as a whole.
Two most important sectors are the environment and economy. The country places the environment as the most important sector because it only makes sense for a city to be smart if it does not deteriorate the environment.
Pollution and drought are the two most critical environmental issues facing Thais. Thus, the main idea is to deploy to the local governments by equipping them with the technology; such as sensors, integrated data system, digital twin, to monitor and predict foreseeable disasters.
The establishment of a smart city transformation framework and Thailand’s already successful pilot cities could be one of the reasons why its cities are suitable candidates for implementing and promoting smart city living.
DEPA is a trailblazer as the first cohort of cities to join City Possible, but they are indicative of a larger trend. The country has had many discussions with networks of cities who are looking to benefit from the insights and resources City Possible provides.
Through City Possible, city leaders can identify the pain points and challenges that are hindering their growth.
However, the implementation of new infrastructure comes with its challenges and resistance.
Three significant challenges arise in terms of effectively utilising resources and technology – the mindset of leaders in a city, existing regulations, and the capacity to act.
Many city leaders do not have adequate technological literacy to pivot the role into innovators. Among those who do, they are sometimes too timid to pose a technological vision.
The Minister explained that local agents of transformation in each city are needed to play a critical role in moving the cities toward becoming “smarter.”
Thus, the Chief Smart City Officer (CSCO) Program will play a pivotal role in building the essential mindset; hands-on knowledge on regulatory, communication and technical skills, to connect the sense of being global and the local.
Thailand is fast becoming what was envisioned by the ASEAN Smart City Network when it was launched by Singapore in the 2018 ASEAN Summit.
While very little collaborative efforts have been made to achieve this, individually, countries such as Singapore is progressing towards tech-driven cities.
While other ASEAN cities may face similar challenges as Thailand, the country’s government shows strong commitment – an essential for achieving the smart city vision.
Singapore has embraced technology as a crucial engine of the nation, where digitalisation is a key pillar of its public service transformation efforts. It leverages data and harnesses new technologies to continuously better citizen services as part of broader efforts to build a digital economy and digital society. Against this backdrop, digital technologies and solutions need to be made secure to ensure there’s no disruption to citizen services and to make sure citizen data entrusted to the government is protected.
Mohit Sagar, Group Managing Director and Editor-in-Chief, OpenGov Asia, acknowledges the work culture is shifting significantly due to the COVID-19 pandemic, especially in the Asia-Pacific region. Remote working or hybrid working has become the new default and will likely stay this way for the foreseeable future.
In the early stages of the pandemic, government agencies and corporations understandably used Band-Aid measures—ad hoc technology and make-shift solutions—to stay afloat and ensure continuity. Considering the suddenness, sheer scale, and severity of the situation, many of these provisions can’t be seen as genuine digital transformation.
This raises two fundamental questions: what will modernising the delivery of citizen services look like in 2022 and beyond? And how can governments improve security and infrastructure to deliver seamless citizen-centric digital services?
OpenGov Asia had the opportunity to speak exclusively with Sascha Giese, Head Geek™ at SolarWinds, to talk about transforming digital services in the public sector and how SolarWinds can help governments in their digital transformation journey.
Sascha has more than 10 years of technical IT experience, four of which have been as a senior pre-sales engineer at SolarWinds. As a senior pre-sales engineer, Sascha was responsible for product training for SolarWinds channel partners and customers.
Culture Shift to Remote Work
Sascha started by exploring the big question about the direction of the workforce and its evolution. In his role, he works with IT professionals in different countries and contexts and has gained a wider and richer understanding of the remote working shift. Most people, he feels, don’t want to go back to the days of fully working from the office after experiencing the benefits of remote work during the pandemic.
Another phenomenon is the “Great Resignation,” which is the ongoing trend of employees voluntarily leaving their jobs. According to The Great Resignation Update, three main reasons why employees quit are burnout, inflexible jobs, and leaving for a more caring culture providing organisational support for employee well-being.
To solve this problem, many companies have adopted hybrid work, which allows employees to alternately work from the office and their home. As the whole workforce shifts, however, it’s particularly difficult for IT teams, as organisations generally weren’t prepared for this massive transition. In the best of times, IT usually takes a long time to deploy or accommodate any change, upgrade, or platform. The pandemic demanded instant change, so mistakes were bound to happen.
The fact is, even now, this is an evolving situation. With new strains and seasons come new measures and needs. This lack of certainty and clarity means no one fully knows what the work model is going to be. Regardless, Sascha firmly believes the future of work is hybrid—a fluid mix of remote and in-office working. Whatever the case, he’s confident IT teams can manage the situation.
Helping the Public Sector Undergo Real Digital Transformation
Mohit believes 2022 is the year where genuine, long-term digital transformation will happen in the public sector. In this constantly evolving digital landscape and VUCA environment, how can governments simultaneously deliver digital services quickly and keep them safe? And how does SolarWinds help the public sector in attaining a secure digital transformation?
Sascha explained most organisations, both public and private, want to increase their presence with more services and better access. Hence, they’re always exploring ways to provide more digital offerings across any platform and device—anytime, anywhere. For this to happen, he says, the public sector must leverage technology across the entire gamut of services, from birth, education, and living to taxes, business, registrations, and more. Technology is no longer an enabler but a disruptor of business models. It can improve lives in a way previously unimaginable.
Singapore is an excellent example of an advanced country when it comes to delivering digital services, in Sascha’s opinion. Through Government Technology (GovTech), it harnesses the best info-communications technologies to make a difference in the everyday lives of Singaporeans. The nation also regularly involves citizens in participating and co-creating technologies with the government, determining the services they wish to have.
An important and indistinguishable aspect of digital services is security, especially for citizen data in the public sector. Citizen data is extremely valuable and needs to be simultaneously secure and available. Maintaining the balance between the two aspects is especially challenging.
To store and secure citizen data, many organisations adopt a cloud strategy. Due to different regulations and compliance requirements in every country, however, organisations can’t put everything in the cloud.
One of the customers SolarWinds supports is a national health organisation linked to a European Ministry of Health, and SolarWinds has helped them improve the delivery of public health services. The customer initially started with basic server monitoring nearly eight years ago and has subsequently moved on to the management of applications and databases. As the organisation continued to grow, the support SolarWinds offered expanded to supporting the network team, where it monitored connectivity between regional branch offices and its headquarters.
In line with the wider government’s direction to create a “cloud-first” initiative, this organisation is shifting resources to a private cloud and uses SolarWinds tools to forecast the impact of data transfer from various locations. This includes placing parts of the monitoring system in the cloud.
In terms of data management, the organisation moved all sensitive data to a private cloud with limited access. It uses the public cloud for the rest of its data, as the public cloud has limitless resources and numerous technologies a private cloud doesn’t offer.
Maintaining Cyber Resilience Amid Perpetual Ransomware Attacks
As cyberattacks continue to happen, maintaining cyber resilience is a critical part of the modernisation of digital services in the public sector. Without a doubt, the most common of these is ransomware. Bad cyber actors are getting more ruthless as they target critical infrastructures, including public health systems and water cleaning facilities. Such attacks suggest human lives don’t matter anymore—they’ll do whatever it takes, even if the attacks cause real danger to people.
Sascha believes mitigating ransomware attacks is a big step towards better security and elaborated on two ways to diminish the damage. As soon as there’s an indication of suspicious activities, the first step is to shut down the machines before any further degradation or infection can occur, preventing the worst. The second line of defence is backups. These backups must also be regularly tested and updated to ensure their efficacy.
Due to the huge amount of data governments have, the backup process is much more complicated. Moreover, data is likely to be highly distributed because branches of local authorities have different sets of data. Additionally, the level of expertise of the IT teams in each agency might vary significantly. Therefore, governments need to find a baseline for security measures.
Mohit points out there’s no such thing as 100% safe from ransomware attacks, so the pertinent question is “how do agencies measure their level of security, and how can they be reasonably safe from such attacks?”
Nearly every industry was confronted with the rise of high-level cybersecurity breaches, highlighting the potential risk of incomplete security policies and procedures. SolarWinds makes a yearly IT Trends Report and polls thousands of IT executives about certain topics—this year’s topic is about security, reveals Sascha.
The findings of the IT Trends 2021 Building a Secure Future uncover a reality in which exposure to enterprise IT risk is common across organisations, but perceptions of apathy and complacency surrounding risk preparedness are high as businesses exit a year of pandemic-driven “crisis mode.”
The findings are based on a survey fielded in March/April 2021, yielding responses from 967 technology practitioners, managers, and directors from public and private sector small, mid-size and enterprise organisations worldwide. Most IT leaders feel their organisations are prepared to manage and mitigate cyberattacks. For Sascha, when people feel secure, they lower their shields and become complacent.
To measure the effectiveness of security protocols, certain tools can be used to check for network security threats, including penetration testing tools and vulnerability checkers. Sascha offers an interesting and progressive idea for security measurement: organisations should hire a group of hackers on the dark web to hack them so they know the vulnerabilities in their systems.
Another thing organisations can do is rely on proper tools for basic mitigation. Sascha believes organisations need to adopt a zero-trust model, which is a security framework requiring all users—whether they’re inside or outside the organisation’s network—to be authenticated, authorised, and continuously validated for security configuration and posture before being granted or keeping access to applications and data.
Rooted in the principle of “never trust, always verify,” organisations must assume they’ve already been breached. Instead of providing permanent access, organisations should provide temporary access for project-based work, external employees, or contractors to minimise the risk of a breach.
Mohit agrees zero trust is the future. The problem is there’s a lot push back from team members, as it complicates their tasks. The question then becomes “how do you implement this unpopular yet crucial methodology?”
In response to this question, Sascha reflected on the December 2020 SUNBURST cyberattack on the SolarWinds software build environment, which illustrates a concerning new reality for the software industry and illuminates the increasingly sophisticated threats made by outside nation-states to the supply chains and infrastructure on which we all rely. The breach was a wake-up call for the software development community, and one of the biggest learnings is security requires constant vigilance and learning and must be part of the mindset of every security team member.
Early on, SolarWinds recognised it was likely a target because of its position as a market leader in monitoring and because it serves a plethora of companies – private, public, small, and large – worldwide. It’s a gateway of sorts, making it a highly valuable target. And while the company believed its prior security practices were representative of the practices within the larger software industry, armed with what they learned from this attack, they further sought to secure their environment and systems against vulnerabilities through its Secure by Design initiative. This includes, among other things, adopting zero-trust and least privilege access mechanisms, addressing risks associated with third-party applications, and, most recently, implementing a triple-build process that aims to set the new standard in secure software development.
From the beginning, SolarWinds has been open in its communication with its customers. The company published its findings from the cyberattack weekly, has worked with various agencies to offer information and remains committed to sharing its learnings broadly given the common development practices in the industry and their belief that transparency and cooperation are the best tools to help prevent and protect against future attacks.
Sascha’s main advice to the public sector is to manage their supply chain, as many organisations don’t even know who has access to their resources. Although organisations might have perfect control of their own environment, they usually don’t know what happens with external parties.
Building Citizens’ Trust in Government Services
When talking about trust in government services, Sascha recognises there’s still a generation not used to the digital world—mobile phones, the internet, online transactions, etc. Governments can’t instantly become fully digital, as there are still those who won’t or can’t cope with these changes. The more they’re pressured, the more they’ll resist giving their personal data to governments, creating a further lack of trust from this community.
Governments need to explain to the public why they’re going digital and how it benefits citizens—all citizens. The public needs to be involved from the beginning, and they need to understand why these changes are necessary to make each citizen’s life better and easier.
Sascha spoke about a SolarWinds product designed to solve a problem for which solutions are still lacking in the market. Many technologies are available to monitor data in the data centre and the cloud separately. However, many organisations don’t monitor the connectivity between on-premises environments and the cloud. When something isn’t working, organisations have to start troubleshooting and figure out what went wrong.
SolarWinds NetPath™, a network path analysis feature included in SolarWinds Network Performance Monitor, SolarWinds Network Configuration Manager, and SolarWinds NetFlow Traffic Analyzer, warns IT professionals where a problem is located. NetPath measures the performance characteristics of each network node and link, making it easy to spot slowdowns. It monitors connectivity from the users to the services and determines what infrastructure is in the path and where traffic slowdowns are occurring. It provides additional infrastructure data only when it appears to be related to a real problem.
With NetPath, organisations can isolate network slowdowns and determine the actual person they need to contact to solve them. This tool fills the gap in the market, as Sascha points out. At the end of the day, troubleshooting is a game of responsibility.
In closing, Sascha emphasises SolarWinds has done a lot to offer excellent digital products and put various security measures in place at the same time. SolarWinds establishes trust by putting significant investment into providing excellent and secure services.
The Joint Committee Meeting (JCM) on Information and Communications Co-operation between the Government of the Republic of Singapore and the Government of Malaysia had a strong digital theme. Both countries discussed digital transformation efforts and explored areas where bilateral digital cooperation could advance post-pandemic recovery.
Both parties discussed issues relating to enabling trusted data flows between the two countries, and to better connecting the respective innovation and technology ecosystems to support businesses and start-ups. In addition, both are committed to implementing projects to demonstrate the benefits of cooperation in this rapidly developing digital domain to support the recovery of our respective economies.
In addition, the JCM also discussed how media production, distribution and consumption are being disrupted by technologies and online platforms, including growing volumes of information and the rapid spread of falsehoods.
The JCM is a platform of increasing importance, to deepen the bilateral cooperation between Singapore and Malaysia. The pandemic has driven many companies to digitally transform and seize new opportunities. Through the JCM, we have initiated meaningful digital cooperation projects to increase the adoption and interoperability of digital technologies in both countries. Our collaboration will serve as a springboard to enhance connectivity between our businesses and people and to support our recovery from the pandemic.
– Yong Ying-I, Permanent Secretary, Ministry of Communications and Information of Singapore
Malaysia continues to embrace digital technology and develop unique technologies and business models to assist the country in establishing new development engines. With the growth of the digital economy, the Fourth Industrial Revolution, and ever-evolving technology, Malaysia looks forward to exploring potential collaboration in this sector in the future. Malaysia is stepping up efforts to assist Micro, Small and Medium-Sized Enterprises (MSMEs) and business owners in adopting digital technology, and will continue to advance plans to establish an inclusive and progressive digital economy for all.
Malaysia has a sustainable and solid economic foundation, comprehensive business-ready environment and dynamic skilled workforce. As an attractive cost-competitive investment location in the region, she is fast becoming a preferred centre for shared services and leading technology industries. Singaporean companies who are looking to expand into Malaysia should pay attention to the launch of the Future 5 Strategy, and evaluate how their businesses can fit into this plan in order to anchor a foothold into the market.
The five industry sectors that have been identified as key drivers are AgTech, HealthTech, Islamic Digital Economy and FinTech, CleanTech and EduTech. These industries are based on the strategic national industries for digitalisation and have also been mapped to Malaysia’s national priority sectors.
As reported by OpenGov Asia, Singapore and the Republic of Korea (ROK) have also launched negotiations on a new Korea-Singapore Digital Partnership Agreement (KSDPA) last year. The agreement seeks to deepen bilateral cooperation in new emerging digital areas, such as in personal data protection and cross-border data flows, digital identities, fintech, as well as Artificial Intelligence (AI) governance frameworks. It also aims to support and foster greater collaboration between both countries’ SME communities in the digital economy.
Recently, Singapore and ROK have concluded negotiations on the Korea-Singapore Digital Partnership Agreement (KSDPA). The KSDPA will be Singapore’s fourth Digital Economy Agreement (DEA), and the first with an Asian country. The agreement will deepen bilateral cooperation in the digital economy between both countries, by establishing forward-looking digital trade rules and norms to promote interoperability between digital systems. This will enable more seamless cross-border data flows and build a trusted and secure digital environment for our businesses and consumers.
The KSDPA is part of a series of DEAs that Singapore has embarked upon. These agreements are an inter-agency effort led by the Ministry of Trade and Industry, Ministry of Communications and Information, and the Infocomm Media Development Authority, to advance collaboration in the digital economy and enhance digital connectivity.
Cross-border e-commerce has become an important driving force for stabilising China’s foreign trade and played a positive role in helping small and medium-sized enterprises hedge against the negative impact of the COVID-19 pandemic.
The import and export volume of China’s cross-border e-commerce totalled Yuan 1.98 trillion (US$ 311.5 billion) in 2021, up 15% year-on-year. E-commerce exports stood at Yuan 1.44 trillion, an increase of 24.5% on a yearly basis. As a new form of foreign trade, cross-border e-commerce has witnessed rapid growth in China by making full use of its advantages in online trading and contactless delivery since the pandemic outbreak.
Digital transformation has emerged as a key pathway to mitigate the impact of the pandemic on traditional trade. More enterprises have attached great importance to cross-border e-commerce as it becomes a vital channel for foreign trade enterprises to open up new markets. Cross-border e-commerce breaks time and geographical barriers and enhances the digital management capacities of enterprises.
Digital tools and digital transformation are the key factors for global micro, small and medium-sized enterprises or MSMEs to survive and thrive in the unpredictable COVID-19 era. Relying on the resiliency of China’s supply chain, a leading Chinese cross-border B2B e-commerce platform has empowered global MSMEs with some capabilities like more data flow, a deeper understanding of customer demand as well as a more tailor-made product portfolio to help them succeed in the challenging business environment.
Relying on the resiliency of China’s supply chain, the platform has empowered global MSMEs with some capabilities like more data flow, a deeper understanding of customer demand as well as a more tailor-made product portfolio to help them succeed in the challenging business environment.
Cross-border e-commerce has become an important channel for China’s foreign trade during the pandemic period and accelerated the innovative development of foreign trade. The outbreak has posed a challenge to logistics and distribution. China’s cross-border e-commerce logistics companies have made efforts to ensure the timely delivery of commodities through charter flights and overseas warehouses.
Shopping via overseas live streaming services could offer detailed information about products to domestic consumers. Such services have gained wide popularity among the younger generation. There is an inevitable trend that more cross-border online retailers will cooperate with live streaming platforms.
New business forms and models, especially cross-border e-commerce, have become a vibrant force driving China’s foreign trade. They also represent an important trend in the development of international trade. China’s cross-border e-commerce has grown by nearly 10 times over the past five years. By both exports and imports, cross-border e-commerce has been expanding much faster than overall foreign trade, and its share in overall foreign trade has gone up significantly.
As reported by OpenGov Asia, Chinese President Xi Jinping pledged to support the development of key technologies while strengthening the regulation of the country’s tech giants as part of his strategy to expand the digital economy. The country needs to boost innovation in core technologies and step up research capabilities to achieve self-sufficiency as soon as possible. China also called for an acceleration in the development of high-speed, secure smart infrastructure that can connect all aspects of the online economy as well as for breakthroughs in key software technologies.
China has identified the digital economy as a key driver for growth over the next few decades and made achieving tech self-sufficiency a top national priority. To support that growth, Beijing has doubled down on funding for strategically important industries such as semiconductors and AI, while rolling out new legislation covering everything from data security to fair competition as part of efforts to bring the country’s once free-wheeling internet giants in line with the national agenda.
When it comes to digital democracy, democracy is the main idea, and digital is just an objective to assist democracy. Around the world, there is the other way of ideas that somehow democracy must give way to the public health measures, to counter disinformation measures. However, technology needs to adapt to the people’s will and the people’s norms, and people’s co-creation and real needs.
In authoritarian uses of technology, the main difficulty would be because of the lack of symmetrical communication. The real-time feedback of what is really going on is hampered. For example, if you can only download, it is more like television. If you can only download but there’s no way to upload, then emerging issues do not tend to get notified in time.
– Audrey Tang, Digital Minister of Taiwan
In Taiwan, the system has been successful in hearing younger people. A lot of the most impactful ideas came from very young people. To shorten the time that a genuinely good idea gets thought by a teenager or young people, and the time that it is understood by the senior people and implemented, is key to moving democracy forward. The younger people, because they are digital natives, they do not think that once every four years is sufficient to upload bandwidth, the latency is too high, they prefer to collaborate on a day-to-day basis.
When the coronavirus began spreading, Taiwan quickly established a mask map system that let people know if they could obtain masks if they went to certain pharmacies. The mask availability map was an idea from the civic technologists, not the government’s idea.
First, they already have a lot of experience building maps of this kind. All sorts of disaster response experiences, including earthquakes, typhoons, gas explosions, occupying of departments, various disasters, were met with this kind of real-time, map-based response by the civic tech people. The second reason is that people are very much willing to participate, because in Taiwan broadband is a human right. So, participating online does not cost any extra connectivity, money, for people.
In Taiwan, when people check-in the public venues, everyone chooses either to scan the QR code and send an SMS to 1922 (Taiwan’s 24-hour communicable disease reporting hotline), which is stored in their telecommunications carrier. But the venue owner learns nothing about their phone number. And the telecom carrier learns nothing about the venue code. de-centralized storage makes sure that nobody’s privacy gets compromised because the telecoms do not know what those digits mean.
There are two main reasons why Taiwan has changed from a very conservative to a democratic society. One is that the public service is really committed to working with the civil society leaders when it comes to gender mainstreaming in the gender equality committee to build the impact assessment, evidence-based projects together. And the civil society leaders always have one more vote than the ministers in the Gender Equality Committee.
The second reason is that the statistics, the dashboard, the gender impact dashboard just keep running. So even after the budgeted project runs its course, the gender impact it created is still being monitored for more than a decade for some projects now. Civil society is not just demonstrating against or protesting against something, it is demonstrating for something, demonstrating something works, and working with the people.
As reported by OpenGov Asia, Taiwan encouraged other nations to consider Taiwan’s example of open digital development and privacy safeguards in countering digital authoritarianism and affirming democratic values. To elaborate on the tools Taiwan has used to foster transparency and public trust, the key is to work not only for the people but with the people.
The digital economy is expected to play a bigger role in bolstering China’s high-quality development and accelerating digital transformation and upgrading traditional industries. Innovative digital technologies like big data, cloud computing and Artificial Intelligence are increasingly being integrated into all other sectors of economic and social development. This trend is injecting new impetus into global economic recovery as well.
By 2025, China will establish a market system for data elements and see the digital transformation of industries reach a new level. Moreover, digital public services will become more inclusive and a sound governance system for the digital economy will be established.
Facilitating the growth of the digital economy is of vital importance to cultivate new driving forces, boost high-quality and innovation-driven development and effectively address the unbalanced development in society. Technologies like big data, cloud computing, AI and the internet of things are evolving fast and finding a wide range of applications across industries and other economic sectors, speeding up their integration with the real economy
– Long Haibo, Senior Researcher, Development Research Center, State Council
China also needs more efforts to make breakthroughs in core and basic technologies, expand the industrial application scenarios of leading technologies as well as strengthen the protection of data security and personal information. China’s digital economy was worth nearly $5.4 trillion in 2020, up 9.6% year-on-year, ranking second in the world.
Moreover, the plan details key tasks in eight areas, including optimising and upgrading digital infrastructure, pushing forward the digital shift of enterprises and expanding international cooperation on the digital economy. It stresses enhancing innovation of key technologies in strategic and forward-looking fields like quantum information, network communications, integrated circuits, key software, big data, Artificial Intelligence (AI), blockchain and new materials, as well as fostering new business forms and models.
The emerging digital technologies represented by 5G, big data and AI have played a critical role in enhancing operational efficiency, cutting costs and improving the core competitiveness of traditional industries amid economic downward pressure. China’s intensified efforts to develop the digital economy will inject fresh impetus into the country’s economic growth and speed up digital and intelligent upgrades in enterprises. The in-depth integration of digital technologies with the real economy will further reinforce China’s advantages in global supply chains.
The digital economy has become a major driver of economic recovery amid the COVID-19 pandemic and network security provides a good foundation for boosting the digital economy. internet-driven companies should collaborate with traditional industries, and leverage their advantages in technologies, talent and capital to support the latter’s digital transformation.
As reported by OpenGov Asia, China will further promote the development of a digital economy during the 14th Five-Year Plan (2021-25) period, according to a circular issued by the General Office of the State Council. By 2025, the digital economy should be in full expansion mode, with the added value of core industries in the digital economy accounting for 10% of GDP.
According to the plan, efforts will be made to accelerate the construction of the information network infrastructure, and a national-level integrated big data centre system coordinating computing power, algorithms, data, and application resources. High-quality data elements will be provided.
The plan also emphasised industrial digital transformation. To accelerate digital transformation and upgrading in enterprises, qualified large-scale enterprises will be encouraged to build integrated digital platforms. Efforts will also be made to deepen comprehensive digital transformation in key industries, including the all-around and full-chain digital transformation of traditional industries and higher digitisation level in the agricultural industry.
While data is an important factor in the digital economy, more effort should be made to bridge the digital divide to benefit more user groups. To be specific, we need to improve infrastructure construction and the sharing of computing power from leading companies to smaller ones
Vietnam Airline officially launched two e-commerce platforms VNAMAZING, VNAMALL as well as its Vietnam Airlines Gift Card. The services were unveiled on 7 January and are the first of their kind in the domestic aviation sector. VNAMAZING offers online tourism services including tour and accommodation bookings. VNAMALL provides a wide range of aviation and non-aviation goods and services. As these are the first e-commerce platforms run by an airline in Vietnam, they have significant advantages for the carrier’s air logistics and partner networks worldwide.
According to a report, the Vietnam Airlines Gift Card is a product available on VNAMALL, which can be used to exchange airline tickets or avail of business class upgrade benefits on flights operated by Vietnam Airlines, Pacific Airlines, and VASCO. The General Director of Vietnam Airlines, Le Hong Ha, noted that as the carrier aims to become a digital airline, it considers e-commerce development one of its top priorities.
Vietnam’s digital economy has been growing at the fastest pace in ASEAN, about 38% annually compared to the region’s average of 33% since 2015. The country expects the digital economy will make up 20% of its GDP and at least 10% in each sector. Recently, the Deputy Minister of Industry and Trade, Nguyen Sinh Nhat Tan, informed that local e-commerce has been thriving, playing an important role in economic development. E-commerce development is an inevitable trend in the country, and the COVID-19 pandemic has catalysed it.
As per the Vietnam E-commerce White Book, e-commerce expanded by 18% in 2020, reaching US$11.8 billion, making the country the only one in Southeast Asia to post a double-digit growth rate in this regard. Estimates by some major businesses indicate that the digital economy of Vietnam is likely to top US$52 billion, which would place the country third in ASEAN by 2025.
Amid the resurgence of COVID-19 in 2021, e-commerce proved to be an increasingly useful tool for enterprises. Local consumers are rapidly moving from traditional in-person shopping to online platforms. A survey by the Ministry of Industry and Trade showed that Vietnam had 49.3 million online shoppers in 2020, compared to 32.7 million in 2016. Hanoi and Ho Chi Minh City are among the largest cities in terms of digital economic development in the region. In HCM City alone, there are currently 567 e-commerce platforms, over 20,680 websites, and 134 apps. Although the lingering COVID-19 pandemic has hindered the flow of goods, many e-commerce platforms and websites still posted fast growth.
Engagement in the online export-import system and stages of transboundary e-commerce will generate opportunities for Vietnamese firms to increase product quality, improve capacity, and make Vietnamese brands popular among consumers around the world. To help boost the sale of Vietnamese goods internationally, the Vietnam E-commerce and Digital Economy Agency (iDEA) has launched the Vietnam National Pavilion, a worldwide e-commerce platform. It has several industry partners and has formulated policies related to marketing, transport, and lending interest rates to support Vietnamese manufacturers that are carrying out the programme. The Ministry of Industry and Trade has been developing and applying an array of measures such as a certified e-contract authority, guaranteed payment infrastructure for e-commerce, and a platform for managing the e-commerce product flow.
Last November, the Prime Minister approved a plan to step up the application of IT and the development of digital transformation in trade promotion. Further, to create a legal framework for protecting consumers in the e-commerce market, the government issued a decree that amended and supplemented another on e-commerce released in 2013. According to the new decree, sellers must publicise information about products as well as business licences and related certificates when doing business on e-commerce platforms.
Apart from that, business activities on major social networks were also placed under management. The ASEAN Agreement on Electronic Commerce, which was signed in Hanoi in January 2019 and took effect in December 2021, set up common principles and rules for facilitating e-commerce development in the region and enhancing the rule enforcement capacity.
The country’s central bank, the Reserve Bank of India (RBI), has set up a department to help create regulations for the financial technology sector and its upcoming central bank digital currency (CBDC). It will facilitate innovation and identify and address challenges and opportunities in the field. The bank explained that the erstwhile fintech division under the Department of Payment and Settlement Systems (DPPS) has been subsumed into it.
The agency will deal with matters related to inter-regulatory and international coordination on fintech. It will report to the RBI’s centralised administration division. Further, the department will provide a framework for research in the field that can aid policy interventions. In an internal circular, RBI said that the department will address matters related to the facilitation of constructive innovations and incubations in the fintech sector if they have wider implications for the financial sector/markets and fall under the purview of the bank. The department will be headed by Ajay Kumar Choudhary, the executive director. He will also look after the risk monitoring department and the inspection department.
RBI is working on two kinds of CBDCs, wholesale and retail. The new department will be tasked with overseeing their development. It will be administratively attached to the centralised administrative division (CAD) of the central office. A media report stated that the department is expected to address new-age challenges that arise from fintech applications, and crypto is only a part of its brief. This means that while the department will oversee cryptocurrencies and their challenges, it may not necessarily be first on its agenda.
According to a report by The Times of India, the majority of fintech start-ups had started operating as unregulated entities. In 2018, RBI created a fintech unit in the department of regulation. In 2019, RBI came out with a framework for a regulatory sandbox to provide a structured avenue for the regulator to engage with the ecosystem and to develop innovation-enabling or innovation-responsive regulations. RBI decided to push innovation primarily to bring down the cost of financial services and boost financial inclusion. As most fintech activities then were in the area of payments, the unit was transferred to the DPPS in July 2020.
Earlier this month, RBI issued a statement regarding its new Framework for Facilitating Small Value Digital Payments in Offline Mode, which allows offline digital payments up to IN₹ 200 (US$2.65) per transaction, subject to an overall limit of IN₹2,000 (US$26.9). OpenGov Asia reported that the move is an attempt to boost digital payment penetration in rural and semi-urban areas. An offline digital payment means a transaction that does not require internet or telecom connectivity.
Under the offline mode, payments can be carried out face-to-face (proximity mode) using any channel or instrument like cards, wallets, and mobile devices. These transactions will not require an additional factor of authentication (AFA). Offline transactions are expected to give a push to digital transactions in areas with poor or weak Internet or telecom connectivity, particularly in semi-urban and rural areas.