Can TPP Help Bridge Asia’s ‘Digital Divide’?
June 2, 2016

Can TPP Help Bridge Asia’s ‘Digital Divide’?

How to make sure TPP helps advance the Digital Economy in Asia.

By Jim Foster

While some parts of Asia are setting the pace for the global Internet, other areas are being left far behind. For example, while Indonesia may have over 90 million people on the Internet, this number is far short of the true potential in a country with a population of over 250 million. The “digital divide” is real and it encompasses infrastructure, governance, and policy weaknesses, and the absence of local firms with regional and global reach.

These issues are challenges not just for domestic constituencies, but for global firms that wish to develop and serve these markets. The diversity within the Asia Pacific region requires service providers to engage with governments and to recognize the importance of involving all elements of the multi-stakeholder community from the start.

This is also true for the recently concluded Trans Pacific Partnership (TPP) Agreement, which was largely negotiated out of public view from necessity and past practice. The ratification and implementation of the agreement will need the support of a wider range of players. Companies that benefit from the Digital Economy in the region, most especially in Japan and the United States, have to be part of this effort.

The Internet is increasingly interwoven into the political and economic lives of Asians. User acceptance is not the issue; shortfalls in Internet growth come from the lack of adequate infrastructure and outdated government regulations. TPP cannot eliminate the “digital divide” in the region, but it can support growth by encouraging domestic and foreign investments, supporting greater regulatory certainty, and promoting a regional digital market where scale is possible.

These positive factors associated with TPP and the groundwork required to move Asia’s Digital Economy forward can be further reinforced by regional infrastructure banks, prominently the Asian Development Bank (ADB). While these institutions are only beginning to focus on the Digital Economy, investments in infrastructure can help bring in additional private capital and encourage groups outside the Digital Economy to capitalize and grow future innovations. This was a key theme at the 2016 G7 ICT Ministers meeting, which Japan hosted in Takamatsu on April 29.

Many elements of civil society in the region have been harshly critical of TPP. Their argument is that TPP cannot ignore the emerging Digital Society if it is to make a meaningful contribution to the growth of the Digital Economy. Privacy, freedom of expression, labor mobility, access to networks, and the availability of content are all important values for the future Digital Society, and these concerns do not always fit neatly into the negotiating priorities of the trade bureaucracies. The proponents of TPP will need to develop a broader narrative for the agreement now that it has entered the ratification process.

APEC can also be an important regional platform for these discussions and has already established a steering group on the Digital Economy. A key focus is how to train the three to five million people that the Asia-Pacific will need to fill new jobs associated with the Internet of Things and Big Data. At the same time, APEC is examining how to manage the “mismatch” between the new Digital Economy and the skill sets of seniors, women, and youth in the less developed parts of the region. Promoting input from civil society and the academic community in developing these policies should be an APEC priority.

Dr. Jim Foster is the Executive Director of The Asia Pacific Institute for the Digital Economy, a regional think tank based in Tokyo and associated with Keio University. The article is based on discussions at an April 11-12, 2016 conference of academic experts and business leaders convened in Tokyo by the Association of Pacific Rim Universities (APRU) as part of a multi-year program of research and exchange on “Governing the Digital Economy in the Asia Pacific Region.”

– The Diplomat