Laos’ Development Into A Digital Economy
Many consider Laos one of the poorest countries in its surrounding region. However, its economy has significantly improved in the last 20 years, slowly connecting to the rest of the world digitally, especially as businesses were forced to adapt during the COVID-19 pandemic. While Laos has made progress to develop a digital economy, it is still lagging behind as accessibility, quality and affordability are currently issues for its citizens. Thankfully, the Lao Ministry of Technologies and Communications has recognized the need for Laos to develop digitally. In fact, several sectors of the Lao Government are partnering with USAID to allow businesses to access the SMART UP e-learning platform to help enhance their digital literacy.
The Larger Issue
Laos’ lag in digitalization results in a lack of transparency, increased procedural hurdles for investors, high costs for business and lacking public-service delivery for the government. Laos ranks 154 of 190 in the World Bank’s Doing Business 2020 report as well as 117 of 132 in The World Intellectual Property Organizations 2021 Global Innovation Index. Around 80% of the country works for small and medium-sized enterprises (SMEs), in which an estimated 100,000 operate informally due to “time, fees and paperwork associated with registering.”
Much of this is due to the Lao PDR’s processes being inefficient, having higher costs and disincentivizing businesses to be part of the formal economy. During the COVID-19 pandemic, approximately 78% of children in urban centers and 87.5% of children in rural areas could not access schooling. Around 48.9% of the population remained offline at the beginning of 2020. With 37.6% of the current population in urban areas and 64.2% in rural areas, Laos needs to increase its digitalization for its own development and to catch up with the rest of the world.
Efforts to Create a Digital Economy
The Lao Minister of Technologies and Communications Boveingkham Vongdara has acknowledged Laos’ need to accelerate and move into digital transformation with sustainable development. He claims the ministry is “promoting local language and creation of digital contents by developing fonts and keyboards that support the Lao language for computers and mobile devices.”
The Department of Small and Medium Enterprises Promotion, Ministry of Industry and Commerce and the Lao ICT Commerce association partnered with USAID to launch the SMART UP e-learning platform to help SMEs enhance their digital skills. SMART UP has eight modules that aim to help provide skills to businesses to enhance and promote themselves. It should help with digital literacy to help businesses become agile in the current economic environment, as well as to respond to digital development challenges so SMEs can survive as well as create new opportunities. With SMART UP helping SMEs and entrepreneurs, it will also create more jobs and opportunities for Lao citizens.
Within the first month of the launch, 373 users registered to use the SMART UP platform including 109 for Basic Accounting for SMEs, 63 in Digital Marketing for SMEs, 43 for Introduction to Data Analysis for SMEs, 35 in Full Stack Development, 34 in Multimedia for SMEs and 34 for Introduction to Digitalization. As a result, many small business owners have had a stronger foundation of knowledge in a quickly changing business environment.
While the COVID-19 pandemic presented many challenges, it also presented opportunities for the Lao PDR to participate in the digital age and develop a digital economy. With its government recognizing the necessity for a digital economy and platforms such as SMART UP allowing citizens to become more digitally literate, Laos will elevate itself and create more opportunities for economic growth.
– Jerrett Phinney