Asia is home to more than half of the global population. In recent years, the region has experienced a significant increase in the adoption of technology and digital transformation, along with some of the fastest-growing digital economies.
The incorporation of state-of-the-art technologies has transformed industries and accelerated economic expansion, thereby enhancing efficiency and improving the quality of life.
Over the next ten years, Asia is expected to account for almost 60% of the worldwide increase in Gross Domestic Product (GDP), primarily due to the extensive adoption of technology. Investments in research and development (R&D) throughout the region are promoting technical progress, which not only stimulates economic growth and efficiency but also results in significant breakthroughs in technology.
“Big Tech” Investments in Asia
Worldwide economic decline has also been evident in the Asian market. Data shows that the venture capital investment in Asian startups dropped by 38% in 2023, reaching its lowest point since 2015. The amount raised was USD 78.1 billion, which is lower than the USD 125.2 billion raised in 2022 and an even more substantial decline from the peak of USD 187.4 billion in 2021.
However, just this year, major tech companies from around the world have made significant investments in the Asian market. Particularly, Southeast Asia is starting to get recognized as one of the fastest-growing online markets with the recent influx of new internet users daily. This has made the region attractive to foreign tech investors.
Last April, Apple CEO, Tim Cook, visited Vietnam, Indonesia, and Singapore, wherein he unveiled a USD 250 million investment to expand the company's Singapore campus, primarily focusing on advancing artificial intelligence (AI) technologies. Apple's investment in Singapore indicates its goal to establish the city-state as a hub for AI initiatives.
Meanwhile, Microsoft CEO, Satya Nadella, went to Indonesia, Malaysia, and Thailand earlier this year to pledge significant investments in ASEAN countries such as the 4-year investment in Jakarta worth USD 1.7 billion, which will be used to develop cloud and AI infrastructure in Indonesia. The investment is said to be the largest in Microsoft's 29-year history in the country and highlights the company's dedication to promoting digital transformation in Indonesia. Microsoft aims to strengthen Indonesia's expanding digital economy and promote innovation in multiple industries by improving its cloud and AI capabilities.
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Additionally, Nadella unveiled Microsoft's plans to build a new data center region upon his visit to Thailand, as part of a more comprehensive deal with the Thai government to provide strong cloud and AI infrastructure. The establishment of the data center is expected to enhance Thailand's digital infrastructure and stimulate increased tech investments and talent influx to the country.
Nadella made his last stop in Malaysia, where he revealed Microsoft’s intention to invest USD 2.2 billion in the development of cloud computing and AI infrastructure within the next four years, aiming to improve Malaysia's digital capabilities and assist the government's initiatives focused on strengthening cybersecurity in the country. As part of its partnership with the Malaysian government, Microsoft has pledged to offer AI training to 200,000 individuals, which can prepare the workforce with the necessary skills to succeed in the digital technology age.
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Telco and Tech Converge to Empower Asia’s Digital Economy
In the burgeoning digital economy of Asia, telecommunications companies, and in some cases, techcos, are making significant tech-focused investments to accelerate regional development.
Indonesia, for instance, has seen the launch of Bitera’s Data Center, which aims to bolster the country’s digital economy by providing robust data storage and processing capabilities. Complementing this, EDGE DC, a Digital Edge company, is setting new standards in sustainable data center design with its low-latency connectivity services in Southeast Asia, further supporting the region's digital growth.
BDx Indonesia has also made strides with the groundbreaking of its greenfield data center, CGK3A, in South Jakarta. This USD 150 million facility, with a capacity of 15 MW, is designed to offer world-class data center services to companies and hyperscalers in Indonesia. These developments signify a substantial enhancement in the digital infrastructure, providing a solid foundation for the growth of the digital economy in the region.
In Thailand, Alibaba's pledge to build a digital economy highlights the international efforts being employed to support Asia's digital transformation. This partnership aims to integrate advanced technologies and digital solutions to foster economic growth and innovation.
In Malaysia, the combined efforts of CelcomDigi, SoftBank, and SC-NEX aim to accelerate the country’s digitalization. These collaborations focus on enhancing digital infrastructure, which is crucial for supporting the digital economy's expansion and ensuring sustainable growth.
The partnership between Nokia and True Group is another pivotal investment aimed at empowering the region's digital economy and lifestyle. By integrating cutting-edge technologies and digital solutions, they aim to enhance connectivity and foster economic development across the region.
Indosat's partnership with ITU and key stakeholders in Indonesia is geared towards driving the country's digital transformation. This collaboration focuses on developing digital infrastructure and promoting digital literacy, which are essential for a thriving digital economy.
AIS, another key player, has invested in the 700 MHz frequency band to expand digital infrastructure in Thailand. Additionally, AIS’ partnership with IPIfication aims to provide secure digital services, enhancing the overall digital ecosystem.
These investments by telcos and transformed techcos are not only advancing their technological capabilities but also significantly contributing to the acceleration of Asia's digital economy. By developing robust digital infrastructures, promoting sustainable practices, and fostering international collaborations, these companies are paving the way for a digitally empowered and economically vibrant future in the region.
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Future Outlook
Governments in the region have also been scaling their investments, creating a favorable climate for technology investments. China's “Digital Silk Road” plan aims to improve internet access and facilitate digital commerce throughout Asia and other regions. The country has been making significant investments in AI, cloud computing, and 5G technologies, accompanied by regulations that promote innovation and attract foreign investment.
Meanwhile, India's “Digital India” program seeks to transform the country into a digitally empowered society and a knowledge-based economy. India seeks to establish a strong digital ecosystem that fosters economic growth by enhancing internet accessibility, advocating for digital transactions, and supporting the integration of technology in governance.
Asia’s emergence as a technological powerhouse reflects a transformation in the worldwide technology industry. With the ongoing influx of investments from top global IT companies, the region is poised to play a key role in shaping the future of various technologies including AI, cloud computing, and digital infrastructure.
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