ASEAN is a future driver of global growth. Here's how to unleash it

ASEAN comprises Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Viet Nam. By 2030, that grouping of countries’ digital economy is expected to more than double to $560 billion, driving jobs and innovation in the region. But positive trendlines alone are not enough. Against the backdrop of leadership challenges and geopolitical shifts, long-term success requires a clear strategy, collaboration in the public and private sectors, and a shared vision.

Here is one such vision that we believe everyone should be able to agree on and work towards together: In this era of technological transformation and economic transition, we need to work harder than ever to ensure a deep and broad foundation for economic growth.

Scale is required for any successful venture to remain profitable and sustainable over time. Building an inclusive economy – where more people contribute their skills and connect to the benefits of growth – is how we create the scale necessary for quality jobs, cutting-edge innovation and sustainable economic success on a global level.

It is how we will ensure that growth endures and delivers gains for decades to come.

Innovation as a regional advantage

South-East Asia, with its young, entrepreneurial and dynamic population, can be the proving ground that demonstrates the power of inclusive growth. Here, leapfrogging older technologies is not unusual, allowing the region to adopt solutions built for the realities of today and tomorrow.

In Malaysia, for example, local AI company YTL AI Labs has recently developed ILMU, a large language model built on the country’s national language, Bahasa Malaysia. Fully developed, owned and operated in Malaysia, it can deliver ChatGPT-like capabilities for native Malay speakers, with potential applications across business, education and government.

At the same time, targeted investment in areas such as harmonizing regulations, reducing non-tariff barriers and boosting intra-ASEAN trade could further amplify the region’s role as a global growth engine.

One example is the proposed ASEAN Business Entity recognition for companies, as a practical and high-impact way forward to enhance regional integration and economic dynamism.

When much of the global political momentum is swinging towards greater fragmentation and disconnection, ASEAN economies stand to benefit the most from increasing cooperation and coordination around key initiatives that would benefit everyone.

Consider the impact of investing in strengthening small business development – especially micro, small and medium-sized enterprises (MSMEs). MSMEs account for more than 97% of all businesses in South-East Asia, 85% of all employment, and drive a significant chunk of the economy, including 40% of all gross domestic product in Malaysia.

MSMEs are also a significant driver of mobility and middle-class expansion. By 2035, seven of the 10 ASEAN countries are projected to be predominantly middle class, leading to a synergistic effect between MSME growth, job creation and consumer demand.

Yet most MSMEs still lack the tools to scale: financing, mentorship, network building and more. This is where the business community, working alongside ASEAN institutions and governments, can step up and make a difference.

Access to capital is critical. But without a digital identity or proven credit history, many MSMEs struggle to secure loans, with up to 60% of those in South-East Asia reporting difficulty in obtaining financing.

To meet this need, the Mastercard Impact Fund pledged US$5 million in 2024 to unlock up to US$1 billion in Asian Development Bank financing for MSMEs. This shows how relatively small commitments from the private sector can de-risk lending and spur a cycle of credit-building.