ASEAN's digital transformation is at risk as local talent falls short, forcing countries to rely on foreign innovators. Can specialized visas aim to bridge the talent gap and the potential fallout of this strategy on economic inequality and domestic workers?
ASEAN is scouting global talent to strengthen its digital transformation. While countries like Singapore and Vietnam are climbing global education rankings, others in the region continue to lag behind. To accelerate the transition to knowledge-based economies, some ASEAN countries are introducing specialised visa programs targeting technological innovators and start-ups.
This strategy aims to enhance technology and creative industries, ensuring the sustainable development of knowledge-based economies. But the potential negative consequences of a foreign talent influx, such as economic inequality, need to be addressed to make sure domestic workers are not left in the lurch.
ASEAN countries are starting to recognize the need to enhance their efforts to attract and retain top talent. The region, known for its rapid digital transformation, is projected to have a digital economy worth US$1 trillion by 2030. ASEAN countries must tap into the global talent pool while balancing the urgent need to improve domestic education and skills development, especially in technology and creative industries.
High-quality education and skills development remain significant challenges for ASEAN, as evidenced by key international metrics. The 2022 Programme for International Student Assessment reflects notable disparities across ASEAN countries. Singapore continues to emerge as a top performer and Vietnam is well positioned in the upper half of the ranking, placing 28th in mathematics, 31st in reading and 32nd in science out of 73 countries. But the majority of ASEAN countries continue to lag behind, with Brunei, Malaysia, Thailand, Indonesia, the Philippines and Cambodia positioned much lower.
Higher education rankings, such as the Times Higher Education World University Ranking 2024, show the dominance of European and North American universities. Only two ASEAN universities are in top positions, both from Singapore, ranked 19th and 32nd globally. While emerging ASEAN economies like Vietnam and Thailand are increasing their educational expenditure and emphasising technology and innovation in higher education, concerns about graduate employment and skill mismatch persist in the region.
Barriers to innovation, entrepreneurship, and digital skills persist and are reflected in the digital divide across socioeconomic groups. Unequal access to digital technologies, internet connectivity and digital literacy remains a concern, particularly in rural areas and among marginalised groups. Despite emerging entrepreneurial communities in sectors like health technology and e-commerce, limitations in measuring innovative entrepreneurial behaviours hamper the region’s understanding of its innovation landscape.
To address these issues and accelerate the transition towards knowledge-based economies, ASEAN countries are beginning to explore measures such as talent attraction and retention schemes, especially after the COVID-19 pandemic. These schemes vary considerably from country to country, reflecting the diverse stages of digitalisation and technology talent development across the region. Some countries are focusing on visas to attract startup founders and innovators, such as the Startup Visa programs of the Philippines and Vietnam.
Singapore, the most mature innovation ecosystem in ASEAN, has benefitted tremendously from foreign talent for its economic development. It offers various visa schemes targeting entrepreneurs, technology professionals in strategic areas such as artificial intelligence, fintech and cybersecurity, and other highly skilled workers.
Indonesia introduced the Golden Visa in 2023. Thailand introduced the Long-Term Resident visa in 2022 and the Destination Thailand Visa in 2024. Both countries are exploring specific visa programs to attract high-skilled professionals and tech talents. Malaysia created the DE Rantau visa program in 2022, opting for the development of an integrated ecosystem to attract both local and foreign skilled digital nomads and promoting digital professional mobility through a one-year visa scheme.
Talent circulation, attraction and retention are key to innovation. Inflows of talented digital nomads present an opportunity for ASEAN to enhance its global competitiveness, particularly in technology-based industries. But for these communities to flourish, a supportive ecosystem is essential. Key components include robust digital infrastructure, clear legal and regulatory frameworks, schemes to promote entrepreneurship and innovation and investment in digital skills development. While pursuing these policies,
ASEAN policymakers should anticipate and address potential negative consequences. These include higher rents due to increased housing demand, increased food prices and generally higher service costs. Another potential problem is the lack of meaningful integration and interaction between foreign talents and local communities, as well as the lack of visible and tangible benefits for domestic communities not directly linked to the local innovation and entrepreneurship ecosystem.
As the landscape of remote work and mobile skilled individuals evolves, the visa policies and approaches of ASEAN countries need to adapt to emerging trends and meet the demands of ASEAN’s fast-growing digital economy. Fostering a supportive ecosystem for talent attraction and retention is essential to encourage innovation-driven growth and maximise positive impacts on host countries and local communities.
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