To the hundreds of millions of people in Asia with access to the web, online platforms have emerged as valuable tools for navigating this connected world. In sectors as diverse as finance, logistics, cross-border trade, talent acquisition, household services, and the traditional buying and selling of goods, online platforms are reshaping the way people interact and businesses operate. By 2020, over a billion people in the Asia-Pacific alone will be served by platforms.
Online platforms—or over-the-top providers, as they are also known in technology circles—are far more dynamic than these uninspiring names imply. And they can significantly support development goals.
Online platforms link people together in new ways and facilitate transactions between groups via the web. They can help customers buy, sell, and deliver commercial goods and products, and typically bring together large networks of people who wish to conduct transactions with one another. Platforms often orchestrate commercial activities but can also address a range of social, cultural, and environmental issues. An example of a successful platform business is the ride-sharing platform GO-JEK, Indonesia’s first startup with a valuation of over US$1 billion. What sets GO-JEK apart from traditional taxi services is its approach to linking buyers and sellers. Rather than purchasing ride services directly from the company, independent drivers and riders use the GO-JEK platform to connect with one another online. So, a rider in Jakarta can use the GO-JEK mobile app to locate and hail a nearby driver, set the destination, and pay for the service all via low cost transactions performed on the GO-JEK platform.
Online platforms have now reached such a level of adoption and influence that they are serving as powerful new tools in the fight to end poverty and promote social inclusion throughout Asia. Asia’s women micro-entrepreneurs are now using the same platform-based business tools as well-capitalized entrepreneurs in Silicon Valley. Through a local education platform, a gifted student who lives hundreds of kilometers from a high quality college can access accredited university courses taught by instructors in the United States.
In addition, platforms are bringing flexible and sustainable new solutions to challenges that have historically impeded or blocked growth-oriented reforms. Where institutions are constrained, private sector platforms can complement state efforts to provide services to populations in need. For countries where lingering conflicts, limited infrastructure, or cultural barriers are a factor, platforms are driving a range of interventions that overcome many ‘last mile’ challenges.
During periods of economic uncertainty and tightening aid budgets, platforms help address long standing development challenges in ways that are efficient, low-cost, and scalable across countries, regions, and income levels. A recent paper produced by The Asia Foundation identifies six specific ways that platforms contribute to inclusive growth and the global sustainable development agenda:
Growing micro, small, and medium enterprises (MSMEs): MSMEs have a significant impact on the livelihoods of the approximately 1.2 billion people in Asia and the Pacific who are living below the poverty line of $3.10 a day. Platforms are helping grow these small businesses by linking them to global value chains, finance, and low-cost, cloud-based business management tools while also helping women-owned businesses succeed.
Enabling Financial Inclusion: In Southeast Asia alone, roughly 400 million people do not have access to formal financial institutions, and in Central and West Asia, only 26% of adults have a bank account. Platforms are connecting – often for the first time – unbanked households, farmers, women, and persons with disabilities to formal financial institutions and alternative savings, payment, and credit mechanisms.
Supporting Small Farms: The latest data suggest that 1 in 7 people in Asia and the Pacific today are still undernourished. Platforms are helping maintain essential food security standards, and providing farmers with best-in-class services that help them introduce greater production efficiencies and grow their income.
Building Human Capital: Budget data from several economies in the region suggest low levels of investment in education and healthcare. Platforms are delivering advanced education and health services directly to men and women in their local communities that they otherwise could not access.
Engaging Women: Women have traditionally faced greater challenges in terms of access to information, capital, and the ability to earn income. By lowering barriers to access, platforms make it easier for women to develop skills, start businesses and find new ways to earn a living.
Promoting Green Growth: In 15 of the region’s economies, the proportion of the population with access to electricity is below 75%. Asia must develop new energy solutions to address this problem, and do this in a more environmentally sustainable way. Platforms hold great promise for a range of large-scale green initiatives that can help policymakers develop solutions that fit community needs.
The Asia Foundation is partnering with Google on a year-long initiative to explore the contribution of online platforms to development. This will include information sharing via our own website (popsdev.org), analysis and the facilitation of advice to policy decision-makers, development assistance experts and other innovators focused on delivering social impact.
The POPS Blog will feature routine information as well as event notices concerning online platforms for development. Contact us if you have information to share.