The Economic Research Institute for ASEAN and East Asia (ERIA) has officially launched its inaugural One ASEAN Start-up White Paper from the ERIA Digital Innovation and Sustainable Economy Centre (E-DISC) during the ASEAN Business and Investment Summit (ABIS) 2024. Titled ‘Towards an ASEAN Innovation Ecosystem: Start-up Creation for Inclusive and Sustainable Economic Development,’ the report focuses on the critical role of innovation and start-ups in driving sustainable economic growth and societal progress across ASEAN.
The report emphasizes the importance of fostering inclusive growth and maintaining ASEAN's global competitiveness as 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 essential services like healthcare. However, the report highlights challenges remain, such as a shortage of skilled professionals, particularly in deep tech, and barriers to investment. Limited funding and research in technology also hinder the growth and retention of IT and AI professionals.
“Innovation and entrepreneurship are the cornerstones of sustainable development and competitiveness in today’s digital economy. ERIA is proud to contribute to ASEAN’s growth by providing research that helps shape the policy environment necessary for these key drivers of success,” said Tetsuya Watanabe, President of ERIA, highlighting the importance of innovation for ASEAN's future.
The report emphasizes how start-ups can play a significant role in promoting sustainable development in line with the United Nations Sustainable Development Goals (SDGs). Through a comprehensive analysis of current challenges and opportunities, it offers actionable recommendations to strengthen the start-up ecosystem across ASEAN, which is essential for boosting productivity, creating jobs, and addressing societal issues.
Dr Giulia Ajmone Marsan, Head of E-DISC’s Startups and Inclusion Programmes and the main author of the One ASEAN Start-up White Paper, underlined the urgency of transitioning 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 continue to remain a driver of innovation and start-up creation over the next decade, policymakers need to seize the opportunity to transition towards a knowledge-based economy now, without any delay and by placing innovation and entrepreneurship at the top of the regional economic integration agenda.”
“For ASEAN, start-ups represent the greatest opportunity to leapfrog the economic and social development of each country. However, achieving this requires a comprehensive approach with close collaboration between the public and private sectors. Furthermore, there is not much time available to seize 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 move forward,” said, Hiroshi Ishikawa, Special Advisor to the ERIA President on Digital Innovation.
ERIA’s E-DISC was established in 2023 to foster collaboration and evidence-based policymaking. The report calls on ASEAN leaders to act on the recommendations provided, unlocking the full potential of their digital economies and creating a thriving start-up ecosystem that will drive economic prosperity and innovation. The ultimate goal is to build a more inclusive future for the region’s citizens.
Key findings from the report highlight the urgency of prioritising the transition towards a knowledge-based economy. Developing high-growth firms, particularly start-ups, is seen as crucial for overcoming the 'middle-income trap' faced by many ASEAN countries. Indonesia, despite its strong domestic market, remains below its ASEAN neighbours in research and development spending and scientific performance, reflecting a key area of opportunity. Improving these indicators will be essential for the country’s continued economic growth.
The report also emphasises the importance of context-specific innovation policies, given the diverse economic conditions across ASEAN Member States. For example, innovations in sectors such as halal agri-tech in Indonesia showcase how the region’s cultural diversity can act as a powerful catalyst for innovation. ASEAN must leverage this diversity as a strategic asset, encouraging linkages and cooperation between innovation hubs across various sectors.
Amongst the report’s key recommendations is a call for a holistic approach to developing the start-up ecosystem. This includes enhancing access to capital, particularly in less developed countries such as Cambodia and Lao PDR, and ensuring that funding is not overly concentrated in major cities like Jakarta. Better market access through ASEAN's economic integration is also essential to scale start-ups. The report further calls for policies supporting talent development and retention, which are crucial for innovation and entrepreneurship.
Through these concerted efforts, ASEAN can create an enabling environment for innovation, economic growth, and social inclusion, ensuring prosperity for all its citizens.
