Southeast Asian Firms Overlook Digital Pact Worth USD 2 Trillion

Awareness Gap Threatens Compliance

A third of companies operating across Southeast Asia remain in the dark about a regional framework designed to generate up to USD 2 trillion in digital economy value, fresh research shows.

The Digital Economy Framework Agreement - known as Defa - represents the world's first regionwide digital economy pact. Yet according to findings presented at an economic conference in Singapore on 8 September, 35 per cent of business leaders surveyed acknowledged their organisations had no familiarity with the initiative.

The research, which canvassed 184 companies across Cambodia, Indonesia, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam, was conducted by the American Chamber of Commerce Singapore alongside Accenture and Google. It points to a disconnect between policy ambition at government level and operational readiness on the ground.

Nearly half of respondents - 49 per cent - said they knew Defa existed but had not evaluated what the framework would mean for their day-to-day operations. Only 12 per cent had completed an internal assessment of its relevance, whilst a mere 4 per cent had developed an action plan.

Bani Trehan, managing director for AI and data at Accenture and vice-chair of AmCham Singapore, described the knowledge gap as a "blind spot." She noted that whilst senior executives discuss the agreement in principle, operational teams within those same organisations often lack concrete understanding of its provisions.

Compliance Risks Mounting

The ignorance carries tangible risk. Firms that have not studied Defa's nine pillars - which cover cross-border data flows, digital trade facilitation and artificial intelligence governance - may be building technology infrastructure and compliance frameworks that will need costly revision once the agreement takes effect.

Organisations deploying AI systems that transfer data between markets, automate decision-making or engage customers across borders will face direct regulatory consequences under the new regime, the study noted. Companies making architecture decisions today without reference to the incoming rulebook may find themselves forced to retrofit systems later.

Singapore's Deputy Prime Minister Gan Kim Yong, speaking at the conference, characterised Defa as a "pathfinder" initiative that would establish mechanisms for digital economy cooperation across the ten-nation bloc. He indicated the agreement could be signed by the end of 2026 and take effect in 2027 under Singapore's rotating chairmanship of ASEAN.

Gan acknowledged the difficulty of negotiating a uniform agreement across member states with widely varying levels of digital infrastructure. Rather than settle for minimal standards that accommodate all parties, Singapore has pushed for an ambitious framework that recognises regional diversity whilst maintaining high baseline requirements.

AI Deployment Stuck in Pilot Phase

The same survey examined how companies are deploying agentic AI - autonomous systems that perform tasks with minimal human oversight. The findings reveal a pattern of stalled progress: ambitious plans and early experiments abound, but few organisations have moved beyond pilot projects to achieve measurable business impact.

Half of the surveyed firms fell into an "exploring" category, characterised by pilots and trials still under way. Another 23 per cent were classified as "scaling," meaning active deployment with trackable results. About 20 per cent remained beginners with little to no structured AI activity, whilst 7 per cent had reached advanced maturity with AI-first operations embedded across their regional footprint.

The gap between the top performers and the rest lies in their ability to adapt AI capabilities to the specific regulatory, customer and operational contexts of individual ASEAN markets, the research found.

Internal obstacles loom large. Culture and change management topped the list of barriers, cited by 27 per cent of respondents. Legacy IT systems and data readiness each accounted for 17 per cent of the concerns flagged.

Trehan highlighted the challenge of turning isolated experiments into enterprise-scale systems. Investment flows freely into AI projects, she observed, but the resulting use cases often remain siloed and difficult to adopt organisation-wide.

Singapore Charts AI Course

Singapore's approach to artificial intelligence spans workforce upskilling, specialist training and sector-specific missions in advanced manufacturing, financial services, connectivity and healthcare, Gan outlined.

The city-state aims to equip workers with baseline AI literacy to reduce fear and resistance, whilst cultivating deep expertise among specialists. It is also pursuing a technology-neutral stance, drawing on innovation from both the United States and China. Autonomous vehicle trials in the Punggol district, for instance, incorporate technology from both powers.

Gan acknowledged AI's disruptive effect on employment, but framed the government's role as preparing workers rather than preserving specific jobs. The goal, he said, is to ensure every worker retains access to relevant employment even as job functions evolve.

Implications for Cross-Border Operations

The convergence of Defa's impending rollout and the uneven state of AI adoption presents a dual challenge for regional firms. Those unprepared for the regulatory environment Defa will establish risk compliance failures and operational disruption. At the same time, companies that fail to build the organisational foundations for AI - data governance, change management processes, modernised IT - will struggle to compete as rivals move ahead.

The research underscores a broader tension in Southeast Asia's digital economy trajectory: policy frameworks are advancing faster than corporate readiness. As governments finalise agreements designed to facilitate seamless digital trade, a significant portion of the business community has yet to grasp what those agreements will require in practice.

For firms operating across multiple ASEAN markets, the cost of this blind spot could prove steep - not only in compliance penalties but in lost competitive advantage as better-prepared rivals capture the opportunities Defa is designed to unlock.