The Digital Divide Amongst MSMEs in ASEAN

Edited by Keita OikawaFusanori IwasakiYasushi UekiShujiro Urata The Digital Divide Amongst MSMEs in ASEAN Economic Research Institute for ASEAN and East Asia (ERIA)Sentral Senain II 6thFloorJalan Asia Afrika No. 8, Gelora Bung KarnoSenayan, Jakarta Pusat 10270Indonesia © Economic Research Institute for ASEAN and East Asia,2024ERIA Research Project FY2024 No. 20Published in September 2024 All rights reserved. No part of this publication may be reproduced, stored in a retrievalsystem, or transmitted in any form by any means electronic or mechanical without priorwritten notice to and permission from ERIA. The findings, interpretations, conclusions, and views expressed in their respectivechapters are entirely those of the author/s and do not reflect the views and policies of theEconomic Research Institute for ASEAN and East Asia, its Governing Board, AcademicAdvisory Council or the institutions and governments they represent. Any error in contentor citation in the respective chapters is the sole responsibility of the authors. Materialin this publication may be freely quoted or reprinted with properacknowledgement. List of Project Members Keita Oikawa, Economist, Economic Research Institute for ASEAN and East Asia (ERIA)Fusanori Iwasaki, Director for Policy Research and Senior Research Associate, ERIAYasushi Ueki, Senior Researcher, Institute of Development Economies, Japan ExternalTrade Organization (IDE-JETRO); and Research Fellow, ERIAShujiro Urata, Professor Emeritus, Waseda University; and Senior Adviser, ERIAGen Arai, Executive Director, Strategy and Business Design, Deloitte Consulting SoutheastAsiaKoYoshida,Senior Manager,Strategy and Business Design,Deloitte ConsultingSoutheast AsiaYuki Mitome, Senior Consultant, Strategy and Business Design, Deloitte ConsultingSoutheast AsiaCarissa Cruz, Consultant, Strategy and Business Design, Deloitte Consulting SoutheastAsiaThiKim Chi Tran,Consultant,Strategy and Business Design,Deloitte ConsultingSoutheast AsiaDemas Mulyantara, Consultant, Core Business Operation, Deloitte Consulting SoutheastAsiaKasyfi Alif Kamaruzaman, Consultant, Core Business Operation, Deloitte ConsultingSoutheast AsiaKensei Fujita, Consultant, Core Business Operation, Deloitte Consulting Southeast AsiaYujiKato, Principal, Service and Infrastructure Group, NRI Consulting & Solutions(Thailand)Punnaroj Punsua, Manager, Service and Infrastructure Group, NRI Consulting & Solutions(Thailand)PimpadchaKerdkokaew,Manager,Senior Service and Infrastructure Group,NRIConsulting & Solutions (Thailand)Achiraya Chinaroj, Consultant, Service and Infrastructure Group, NRI Consulting &Solutions (Thailand)Dollaporn Khositphumiveth, Senior Business Analyst, Service and Infrastructure Group,NRI Consulting & Solutions (Thailand) Table of Contents List of Project MembersiiiList of FiguresvList of TablesxivList of AbbreviationsxxiiChapter 1Introduction1Chapter 2Methodology18Chapter 3Questionnaire Methodology23Chapter 4Web Survey Results33Chapter 5Phone Survey Result150Chapter 6General Analysis of the Digital Divide in ASEAN228Chapter 7Analysis of Internal Factors of Micro, Small, and Medium-Sized Enterprises Causing the Digital Divide285Chapter 8Analysis of External Factors of Micro, Small, and Medium-Sized Enterprises Causing the Digital Divide349Chapter 9Digital Divide in Industry404Chapter 10Analysis of Current Activities within ASEAN456Chapter 11Various MSME Digitalisation Activities in Other Regionsand Countries490Chapter 12Policy Recommendations531Appendix 1Digital Tool Implementation570Appendix 2Questionnaire Item577 List of Figures Figure 4.1Stageof Consideration for Implementing Intra-CompanyManagement Tools61Figure 4.2Stageof Consideration for Implementing Each of the Intra-Company Management Tools by Country62Figure 4.3Stage of Consideration for Implementing the Procurement Tools64Figure 4.4Stage of Consideration for Implementing Each of the ProcurementTools by Country65Figure 4.5Stage of Consideration for Implementing the Logistic Tools66Figure 4.6Stage of Consideration for Implementing the Logistic Tools byCountry67Figure 4.7Stage of Consideration for Implementing the Sales and MarketingTools68Figure 4.8Stage of Consideration for Implementing the Sales and MarketingTools by Country69Figure 4.9Stage of Consideration for Implementing the Overall CompanyOperation Tools71Figure 4.10Stage of Consideration for Implementing the Overall CompanyOperation Tools by Country72Figure 4.11Stage of Consideration for Implementing Other Advanced Tools73Figure 4.12Stage of Consideration for Implementing Other Advanced Tools byCountry74Figure 4.13Breakdown of Major Objectives of Digital Tool Adoption77Figure 4.14Breakdown of Digital Tools’ Success in Meeting ImplementationObjectives and Generating Benefits80Figure 4.15Breakdown of Digital Tools’ Success in Meeting ImplementationObjectives and Generating Benefits by Country81Figure 4.16Breakdownof the Causes of Difficulties in the InformationGathering Phase98Fi