The early tech booms in Japan and South Korea, the mammoth Chinese tech landscape and the recent emergence of Southeast Asia and India’s digital economies (both of whom are each projected to eclipse $1 trillion by 2030), all illustrate a story of Asia’s rise that is hard to disaggregate from the promise of the tech revolution. As such, regulatory developments that happen here not only have real impacts on the daily lives of over 4.5 billion people, but global ramifications on internet and technology governance.
Whilst the pandemic has accelerated the region’s digital transformation (over 40 million people in Southeast Asia came online for the first time in 2021) it has also revealed structural barriers to overcoming the digital divide, particularly for women and people living in rural areas. Governments in the region must strike a balance between capitalising on digitalisation and reconciling the social implications of technology. The policy decisions governments make and how they align with broader international policy movements will be critical to realising the transformative power of the internet. For the rest of the world, rather than balk at Asia’s technological rise, the next few years should be seen as an opportunity to spur productive competition, find new avenues for global cooperation and ensure that the benefits of the Fourth Industrial Revolution are equitably distributed.
This article outlines some key internet policy issues playing out in Asia that will see increasing debate over the next year.
Increasing geopolitical tensions around how we’re connected will have material costs
From submarine cables and a GPS alternative to NewIP (an alternative internet protocol) to semiconductor geopolitics, the past few years has seen China take an increasing active and somewhat contentious role in influencing the direction of global internet and technology governance, challenging the current model of an open internet. Through a variety of strategies seeking to proactively influence global technical standards development for various emerging technologies such as 5G/6G, artificial intelligence, internet of things, blockchain and quantum computing, China is attempting to wrestle influence away from the de facto Western telecommunications dominance of the 20th century.
As tensions between the US and China escalate, moves that seek to decouple the two economies will have a net negative impact for innovation, economies and stability. Just in the past 4 years, there has been a 96% decrease in tech-related foreign direct investment between the US and China. Ultimately, systemic solutions are needed such as those outlined in our recent Open Internet report which allow for more modern, fit-for-purpose pathways for geopolitical engagement, compromise and cooperation.
Aligning interests within trade will provide pathways for greater cooperation within data governance and privacy
The growing focus on both internal and international data governance and privacy regulation belies the importance of data as the fundamental building block for the digital economy. With many domestic data protection laws being drafted or having recently come into force, Asia moves into a second stage that will look at regional regulatory alignment, finding compromise amongst localisation requirements and adequately ensuring local enforcement capability.
This year, the Regional Comprehensive Economic Partnership (RCEP) came into force after a decade of negotiations forming the largest free trade bloc in history. RCEP makes significant contributions to global data governance, requiring domestic data protection frameworks which will see Cambodia, Laos and Myanmar drafting legislation within the next 5 years, as well as encouraging companies to publish privacy policies, commitments to cross-border data sharing, stronger consumer protections and for nations to consider evolving international standards in domestic privacy protection development. The material impacts of this agreement on privacy, and how it compares and aligns with the fragmented success of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), and the non-binding APEC Cross-Border Privacy rules have yet to be seen – but all provide a strong starting point for future developments.
Ensuring healthy information ecosystems needs greater understanding of local contexts and stronger commitments towards digital rights
Facebook’s ‘determining role’ in the Myanmar genocide, a movement to revise history as we approach an upcoming election in the Philippines, lynching and riots in Delhi coordinated on WhatsApp and the onslaught of Covid misinformation have demonstrated the region's experience with some of the most extreme impacts of misinformation and online harm.
However, as governments bring in greater restrictions to freedom of expression online, often under expansive and vaguely worded ‘cybersecurity’ legislation (in the past year nearly half of global content restrictions have been within the APAC region), many critics fear the pandemic has catalysed already rising levels of autocracy throughout South and Southeast Asia. Taken in concert with internet shutdowns and frequent attacks on journalists, greater efforts must be taken to reaffirm fundamental rights.
The region has always had a complex relationship with civic participation, political dissent and censorship, however if the Facebook Papers revealed anything, it’s that increasing contextualised understanding is needed. Policy and technology interventions that aim to engender healthy information ecosystems (especially as newer content pathways such as the metaverse emerge) must become more sophisticated, nuanced and targeted. By unpacking the underlying business model and structures that have engendered these harms, enshrining user agency and looking for opportunities for regional collaboration - a pragmatic middle pathway that can balance societal safety and the benefits of open platforms will emerge.
Ensuring cyber-resilience is framed as an opportunity not a burden
Investment in cybersecurity has not kept up with the region’s growth which is especially concerning considering an average encounter rate for malware and ransomware attacks 1.6 and 1.7 times higher than the global average respectively. Ensuring a strong cybersecurity ecosystem requires concerted effort across a wide range of domains and as such gaps in skills, infrastructure and resourcing have led to disparities (11 states still lack a national computer incident response team) across the region, especially within the Pacific and Central Asia. This leaves states with fledgling and fragile innovation systems particularly vulnerable malicious and opportunistic actors.
Singapore has been able to see the payoff of a holistic and deliberate strategy to bolster cyber resilience. An initial focus on establishing strong legislative frameworks followed by dedicated investment to ensure ongoing growth in capabilities has proven extremely effective. The recent release of their second cybersecurity strategy which looks beyond critical information infrastructures to making cybersecurity convenient for day-to-day users has established the city-state as a global leader. These efforts have resulted in strong growth in the local cybersecurity market (15% CAGR in 2021) as well as a 66% increase in cybersecurity professionals in the previous year. As Singapore takes the Chair the UN Open Ended Working Group on ICT security this year, after a successful tenure setting up regional cooperation initiatives within ASEAN, there is a clear runway for digitally mature states to lead the way for more nascent states to build their innovation ecosystems on secure foundations. Closing the digital maturity-security gap will help ensure the whole region is able to reap the benefits of safe digital environments.
Asia is primed to adopt and scale
Asia is set to become a global leader in artificial intelligence, spurred by strong private sector investment, supportive policy environments and the bittersweet conquering of a 2500-year-old board game. Even though many states in the region are still within early stages of adoption, working at unpacking key barriers such as robust data infrastructure, talent cultivation and appropriately understanding business needs, the appetite for the potential upside (most clearly demonstrated in China’s progress) is reflected in government strategies across the region.
China as one of the first states in the world to publish a national AI plan is aiming towards becoming a global leader following a strategy comprised of championing private sector actors that will spearhead innovation in various domains, incentivising local government implementation and strategic research investments. Other countries in the region are not being left behind, with the AI market in India and South East Asia both projected to become massive contributors to their respective economies, although common challenges around talent development, data governance and cloud integration still are present.
The publication of distinct AI ethical principles, such as China’s recent publication of their ‘Ethical Norms for the New Generation Artificial Intelligence’ and calls for an ASEAN regional policy and guidance at the Digital Ministers meeting this year show a commitment towards responsible development. At a high level, there is much common ground to be found, but seeing how these play out in the deployment and scale of these systems will be a key ongoing issue.
China’s Tech Crackdown fallout and what about Web3?
It would be impossible to talk about internet policy issues and not talk about the recent Chinese tech regulatory agenda that began with the cancellation of Ant Financials’ IPO late 2020 and has grown under President’s Xi’s encompassing ‘Common Prosperity’ banner to include antitrust actions, fines for privacy breaches and even curbs on the amount of time children can play video games and access social media. With signs of more activity in 2022, understanding whether these restrictions will ‘kill entrepreneurial drive and destroy jobs’ as some pundits believe or serve as a blueprint for potential regulatory action in the West will become one of the key internet policy debates of this decade.
Finally, the pandemic cryptocurrency boom buoyed by intensifying VC interest has propelled interest in Web 3.0 across the world – and there are strong signs that Asia is set to capitalise on these developments. Bullish signals such as Vietnam’s Axie Infinity leading the way in GameFi (play-to-earn games using decentralised finance) and countries such as the Philippines, Malaysia and Thailand having the highest proportions of NFT ownership globally, should be tempered with concerted efforts to understand and mitigate potential risks (such as a consumer protections and the facilitation of online harms) whilst balancing excessive heavy-handed actions that might stifle the cultivation of this new ecosystem.
Asia’s rise is not a zero-sum game. If anything, the tech revolution inextricably links the economies, societies and citizens of the region to the rest of the world. As such, finding consensus and compromise amongst these internet policy debates must be prioritised, in particular avoiding geopolitical pitfalls that will fragment an open internet.
It’s time for more adaptive international policy cooperation mechanisms
Reimagining the policy compact between businesses, people and governments will be essential to approaching the complex nature of these internet policy issues. Forging new avenues for bilateral, multilateral and multistakeholder collaboration (such as through trade agreements, mainstreaming technology issues in foreign policy and minilaterals) will see flexible, fit-for-purpose cooperation that keeps up to pace with developments.
Digitally mature nations should lead the way in emphasising the opportunities, not the burdens of investment in cybersecurity and cyber resilience.
Mature digital economies require open and interoperable networks that are trusted, safe and secure. Digitally developing economies that can leverage best practices and lessons to build a holistic cyber policies that protects their innovation ecosystems, will see greater opportunities for growth, investment and development. Leaders must provide sustained support to those more vulnerable as it strengthens networks across the entire region.
Enabling a diverse investment ecosystem will be the tool to ensuring an open internet
Building a competitive environment for public investments in infrastructure, internet standards and local capacity-building must be prioritised to ensure a diverse and open internet ecosystem. Moving beyond a binary approach with China and finding opportunities to co-fund, co-train and co-build could provide an unprecedented platform to close the digital divide.
Governments must reaffirm commitments to rights in the digital age, and work with private companies and civil society to ensure follow through
Regressive actions, such as censorship and internet shutdowns, must be critically re-examined post-pandemic, ensuring policies are proportionate and appropriate. Forums which facilitate regional alignment and deliberation will ensure that actions align with human rights protections whilst strengthening how local contextual considerations can better inform approaches to these key challenges.