Digital technologies can help boost productivity in Asian countries following the economic scars induced by COVID-19 pandemic measures and luckluster productivity growth, the International Monetary Fund (IMF) said in a blog.
“Deep economic scars from the pandemic and the lackluster productivity growth that preceded it are weighing on the region’s longer-term growth prospects. But despite these challenges, we see a promising path for boosting Asia’s productivity that runs through a landscape in which it has a history of leadership: digitalization,” the blog said.
The IMF pointed out that digital technologies can increase the efficiency of the public and private sectors, expand financial inclusion and improve access to education, but also provide opportunities for opening new markets whereby companies can serve distant customers.
“During the pandemic, digitalization improved the allocation of precious resources for health and social benefits, allowing a prompt provision of relief while keeping leakages of public spending in check,” the blog said.
The IMF emphasized that a significant share of innovation has taken place in a broad range of Asian economy sectors, ranging from manufacturing automation to e-commerce platforms.
“The region accounted for 60% of patents in digital and computer technologies right before the pandemic, up from 40% two decades earlier. The manufacturing powerhouse enjoys a wide global lead in installation of industrial robots. China is the single biggest robot user, accounting for some 30% of the market,” the blog said.
However, the IMF said reforms in support of innovation and digitalization are necessary and urged governments to enhance their digital infrastructure in order to improve access to information and technology as well as provide digital literacy to meet employers’ demand.
The IMF also called on governments to facilitate adoption of new technologies by streamlining regulations in line with the evolving digital industry.
“Asia is poised to continue leading digital innovation. Facilitating equal access to technologies across firms, industries, and workers will help the region fully benefit from the economic boost that digitization offers,” the blog said.