Interview Giulia Ajmone Marsan, Director, Strategy and Partnership, ERIA, Indonesia.

Keywords: Innovation, South East Asia, entrepreneurship, COVID 19, digitisation, social inclusion, environmental sustainability.

Please can you introduce your role and the work of the Economic Research Institute for ASEAN and East Asia (ERIA)?

I joined ERIA in May 2019 as the organisation's first Director for Strategy and Partnership. In this new role, I help ERIA to strengthen connections with senior policy makers in ASEAN (Association of Southeast Asian Nations) and East Asia, participate in multilateral economic fora such as the ASEAN Chairmanship process, the G20, and various initiatives of international organisations like the United Nations, the OECD or the Asian Development Bank.

I am an innovation economist by background and I had the privilege to study and research innovation and entrepreneurship ecosystems around the world: from Latin America, to Europe, North America to Africa. Now I continue this research in Asia and I am currently strengthening ERIA activities in areas such as innovation ecosystems, entrepreneurship and start-up creation. The current trends and recent developments across South East Asia, but also in a country like India, are fascinating given the dynamism and vibrancy of the domestic entrepreneurship community. Thanks to its young population (around 60% of people under the age of 35 across South East Asia alone), tech competences, and diversity, the region is very well positioned to become a leading innovation player over the coming decades.

How did Asian countries respond to the economic challenges of the COVID pandemic?

As anywhere else in the world, also across Asia the COVID-19 pandemic brought a massive shock to the economy. During the pandemic, for the first time in decades, poverty rates stopped their decline and, according to World Bank data, in 2020 32 million people failed to escape poverty because of the economic shock caused by COVID-19.  Sectors of the economy such as tourism were particularly affected and have not yet fully recovered. At the same time, the “new normal” caused by the pandemic, was a catalyst for innovation: digital services expanded significantly since 2020 and there was a very interesting entrepreneurial push in areas such as health tech or ed tech, for instance. Many of these innovations are here to stay. Overall, the region has bounced back strongly, with economic growth for South East Asia projected in the range of 4-5% in 2023. With this pace of economic growth, ASEAN is on track to become the 4^th largest economy in the world by 2030.  But the global macroeconomic framework is not as positive for start-ups and new businesses as it used to be: with high-interest rates many startups are struggling more to access capital. Having said that, I think the region remains an ideal place for investors especially as markets are not yet as mature as in North America or even China. The space for opportunity is still very big.

"A key priority is to make sure that this sustained economic growth brings benefits to as many people as possible. This is why a key priority is to maintain a strong focus on social inclusion and environmental sustainability." Giulia Ajmone Marsan

Kuala Lumpur the capital of Malaysia

Picture Credit: Pixabay

What are the future priorities for economic growth and social problem-solving in the region?

Across the region, economic growth is projected to remain strong. A key priority is to make sure that this sustained economic growth brings benefits to as many people as possible. This is why a key priority is to maintain a strong focus on social inclusion and environmental sustainability. There are many big challenges to solve and innovators and entrepreneurs have a very important role to play: from the reduction of marine plastic debris (a big challenge for the region), connectivity in rural areas, better inclusion of people from certain ethnic groups, women, people with disability, for instance. We are seeing already a number of startups active in this space: we recently completed a study on how digital technologies can be a channel for inclusion of people with disability in the economy and we talked with a number of companies actively working on this issue. Other entrepreneurs are very conscious about environmental needs and they are using plastic waste to develop construction solutions or moving towards plastic-free deliveries, a very important issue in a region where ordering a meal online has become so common and convenient!

Why is inclusiveness important and how can it be achieved? 

Policy makers and business leaders in the region are aware of the importance to combine economic growth with sustainability and inclusion. This vigorous economic growth and the technological change brought by digital transformation is generating winners but also losers. Different groups of individuals are not benefitting equally. The geographical dimension is particularly relevant for a region like ASEAN where rural areas are less connected to infrastructure (both physical and digital) and it is more difficult to become a digital entrepreneur or logistic barriers and costs are higher. Another dimension is the one about the gap between larger corporations and MSMEs (Micro, Small & Medium Enterprises), the latter with much less ability to invest in digital technology and upskilling. Finally, we also see the emergence of a digital gender divide as women do not have equal access to digital skills (like STEM skills), entrepreneurship opportunity and leadership positions in the digital economy. The transition towards inclusive digital economies must be at the center of any policy strategy and the region needs to invest massively in skills, including problem solving and entrepreneurial skills of its young (and also less young) population. Education is the best way to empower people in times of rapid economic transformation.

How do The Sustainable Development Goals feature in plans for the future?

The Sustainable Development Goals (SDGs) agenda is a very relevant framework, globally and for the region. Explicitly or implicitly SDGs feature in most development plans of countries across Asia. They figure prominently also in high level policy discussions related to the ASEAN Chairmanship process led by Indonesia or the G20 led by India this year. Interestingly, especially younger generations across South East Asia, India and East Asia are very interested in sustainability and inclusion. The great majority of young entrepreneurs we are in contact with put sustainability and inclusion at the center of their business models. I think we can say that there is increasingly widespread recognition that today - in 2023, post pandemic - the modern way to be an entrepreneur and an innovator is to develop a business that actively contributes to the Sustainable Development Goals agenda. Whether by focusing on plastic reduction in packaging and delivery, using natural fibres and colouring in the fashion industry or focusing on the inclusion of vulnerable groups in society like people with disability, women and other under-represented groups.◼️