State of Digital Economy in Asia-Pacific Region: Delineating the Role of Digital Skill

Introduction

Today, we are living in a knowledge economy and in such economy, knowledge is considered to be the prime driver of growth and development. In the context of the present knowledge economy, the role of Information, Communication and Technology (ICT) in fostering the digital economy can never be undermined (Sharma et al., 2016). The presence of ICT can be felt everywhere in different forms and it has become a prerequisite of human progress (Lee et al., 2017). In fact, digital economy has altered the economic processes, systems, industries, consumer behaviour, business interactions and business models in the present scenario (Bukht & Heeks, 2017). To many, digital economy is also known as ‘new economy’, ‘internet economy’ or ‘information economy’ (L'Hoest, 2001). By whatever name it may be called, it is truly representing a wide idea as it includes e-commerce, e-governance, e-payment system, e-banking, e-knowledge processing, internet banking, mobile banking, payment wallets etc. (Quah, 2003; Chakravorti et al, 2016). Digital economy through its spill-over effect promotes economic growth and it also has the ability of lowering non-accelerant inflation rate of unemployment¹ (L'Hoest, 2001; Kamel, 2005). In addition to these, digital economy equilibrates inflation and unemployment in short run, introduces innovative as well as quality products and services, dampens the business cycle (which allows the economy to operate at full capacity), allows the control of corruption and generates employment directly and indirectly (Atkinson & McKay, 2007; Howard et al., 2010; Saxena, 2018). As a matter of fact World Bank (2016) in its ‘World Development Report on Digital Dividends’ unequivocally reiterates the role that the digital technology can play in promoting growth and development through inclusion, efficiency and innovation. Owing to its tremendous potential, the digital economy is growing at a very rapid pace across the globe and it is even growing at a faster rate (15-25 percentage) in the developing countries (Bukht & Heeks, 2017).

However, the transformation into the digital economy is to a great extent conditioned upon the state of the digital skill in an economy (Servon & Kaestner, 2008; Aikins, 2019) as it is very much true that the benefits of digital economy can only be harnessed by economies with strong fundamentals (World Bank, 2016). The importance of digital skill can be understood from its linkage with Sustainable Development Goal 4² in general and its linkage with SDG Target 4.4³ alongside Target Indicator 4.4.1⁴ in particular (World Bank, 2016). In fact, the ability to use ICT is regarded as the essential life skill to be acquired by everyone (Montoya, 2018⁵). Like reading and writing, digital literacy has also emerged as one of the most important generic skills in modern life (World Bank, 2016). The global pandemic of COVID-19 (Corona Virus) has further reiterated the importance of digital economy and digital skill in our lives at a time when majority of the countries in the world are under lock down⁶. The changed socio-economic order due to the outbreak of COVID-19 and subsequently lock down has also altered human behaviour towards digital technology towards great extent. A large number of people who used to consider the use of technology and internet a remote possibility are also increasingly using the digital mediums to carry out normal day to day functions (Guitton, 2020). However, digital inequality can act as a potential threat in exploiting the advantages of digital economy. Mitigation strategies are to be developed to overcome digital inequalities to enable the people in combating COVID-19 crisis by leveraging the power of digital economy (Beaunoyer et al., 2020).