Digitalisation holds the key to achieving reduced inequality and other United Nations’ Sustainable Development Goals (UN SDGs), but what steps can we take to ensure that this digital world is both safe and inclusive? This was the topic of discussion at the Dentons Rodyk Dialogue 2022, a joint initiative by Dentons Rodyk & Davidson LLP and Singapore Management University (SMU) that aims to bring legal, business and academic leaders together to discuss pressing global issues and trends. 

Among the illustrious panel at the dialogue was Locknie Hsu, Professor of Law at SMU, who specialises in trade and investment law and digital economy trade agreements. In her presentation titled “The Digital Economy: Trade, Technology and Inclusiveness”, she described how Web 3.0 and other major developments in technology have shifted the paradigm of the digital economy. She explained the opportunities and risks that come with these changes, and shared important steps that ASEAN countries need to take to protect consumers, help businesses and create greater inclusivity for all. 
 

Here are five highlights from her presentation:  

1. Understanding the new paradigm of the 'Digital Economy'

Prof Hsu shared that traditional notions of the digital economy need to be updated. According to her, “a lot of the dialogue, trade agreements and legislation has hitherto been designed with eCommerce platforms in mind. Conversations need to shift to include broader digital developments”. She explained how Web 3.0 developments like the Metaverse and decentralised finance have led to the emergence of new business models, and expanded the range of digital goods and services available to the masses. Regulators need to understand these technologies, using a blend of light and heavy touch regulatory measures, so that online safety is achieved without stifling innovation.  

2. 3 types of fragmentation caused by disruptive technologies

Prof Hsu listed three types of fragmentation that has occurred as a result of disruptive technologies. The first is the fragmentation of laws since there is no universal understanding on how to regulate these emerging technologies and the diverse issues that come with them. The second is in relation to government agencies which continue to deal with these issues as silos. Prof Hsu explained that “the emerging digital economy traverses many types of areas, which might touch on different agencies’ purviews” and therefore coordination and collaboration will become critical. Finally, she observes that contrasting views on the technologies (e.g. cryptocurrencies) can lead to fragmented regulatory approaches even within a single region, making it difficult for businesses who wish to operate in more than one country or jurisdiction.   

3. Greater digital inclusion of SMEs is key for ASEAN

Permissioned blockchain platforms are currently being piloted in the trade arena given their  features such as the ability to record the provenance of goods and input materials from suppliers including SMEs. As shared by Prof Hsu, there are 70 million SMEs in ASEAN, of which a considerable number is run and owned by women entrepreneurs. By facilitating the inclusion of reliable SMEs in the supply chain, and helping these women entrepreneurs access these digital technologies, the benefits will flow to their families. This would multiply the impact made, and give ASEAN the boost it needs for digital transformation.  

4. Legal and practical challenges in building a digital ASEAN

Prof Hsu listed a number of legal and practical challenges that need to be addressed for ASEAN to become a robust, safe and inclusive digital environment:  

Click on the icons for more details

5. Opportunities for inclusiveness in trade and digital economy agreements

Prof Hsu shared excerpts from existing trade and digital economy agreements to illustrate how the addition of provisions can enable greater inclusion of Micro, Small and Medium Enterprises (MSMEs) and foster customer confidence. She highlighted the ASEAN agreement on E-commerce that is currently in force and includes an article on stakeholder engagement. She lauds this as an important step in bringing SMEs, women entrepreneurs, academics and other stakeholders to the dialogue, so as to create a digital economy that is inclusive and beneficial to all.