Tech groups must address the digital divide in south-east Asia

South-east Asia, a diverse and dynamic region with a young and energetic population, is gearing up for its third economic transformation since the second world war. After racing to become self-sufficient, then shifting towards export-driven manufacturing growth between the 1960s and 90s, the area is now on the cusp of another change powered by technology.

This third wave brings tremendous opportunities but also risks, deepening the divide between “haves” and “have-nots”. Not everyone has access to the digital skills to benefit from a digital economy. Cisco and Oxford Economics estimate that technological changes will displace 28m workers in the Association of Southeast Asian Nations.

Governments in Indonesia, Singapore and Malaysia are starting to respond with efforts to build up their digital economies, improve skills and harness technology. But this will not be enough. The private sector, including technology companies, must actively drive social and economic inclusion of the 14 per cent of Asean’s population that still lives below the international poverty line.

They can do this by taking action in three areas. First, technology companies should focus on empowering small and medium-sized enterprises. These SMEs form the backbone of the regional economy, employing between 52 and 97 per cent of the total Asean workforce. We at Grab are already trying to do that. More than 9m micro-entrepreneurs — one out of every 70 people in south-east Asia — have earned an income through the Grab platform. More than 20 per cent of our drivers did not work prior to joining Grab, and we have helped 1.7m people open their first bank accounts.

We hope to achieve more through GrabKios, a platform in Indonesia aimed at warungs — traditional retailers who are an essential part of daily life. More than 2.6 million warung agents are using the platform to grow new revenue streams via technology. Grab technology allows customers to deliver ecommerce packages and enables consumers to buy sharia-compliant gold savings plans and microinsurance at warungs.

Second, companies should work to reduce the widening digital gap, especially in communities which are already marginalised. Although Singapore ranked second in the 2019 Inclusive Internet Index’s measure of digital inclusion, Vietnam was only 44th. Grab uses partnerships to do our share, including our “Break the Silence” initiative to implement inclusive technology to support the deaf and hearing-impaired; it also launched a bid for Singapore’s first digital banking license to help SMEs access microloans.

Finally, Asean companies should develop technology talent and train their local workforce. While the region is building its pipeline and attracts foreign talent, more than 6.6m workers will need new skills by 2028 and about 41 per cent of them lack relevant IT skills. We have joined forces with Microsoft to make digital skills education and training more accessible. Under this initiative, we are working with a non-profit to create a pathway for interested Grab drivers to pursue technology careers.

The story of former construction worker Pak Rudianto in Indonesia illustrates the broader message. Previously, he had to scavenge on the streets to supplement his erratic income and had never had the chance to own a smartphone. As a GrabBike driver, he quickly earned his first $1,000 through the app and Grab helped him sign up for a first bank account. Today, Rudi earns double what he made as a construction worker, enough to send his child to school. After saving enough to build a house, he is now saving to own a chicken farm.

Grab contributed $5.8bn to south-east Asia’s economy in the 12 months to March 2019, but that is just the beginning. Helping economic inclusion will be part of the way we measure our future success. We invite investors and other businesses to join us.