Southeast Asia’s digital growth story is unique because, unlike the US, it has always been about building in a highly fragmented market. Startups here did not have the benefit of starting in a large, fairly homogenous environment. Most started in their own respective countries, then built and adapted to the specific nuances of those countries – regulatory, cultural business practices, local markets and consumer behaviour.
Scaling across the region has never been a rinse-and-repeat exercise. It’s a process of adaptation and assimilation, grounded in local realities. This has shaped a generation of founders and investors who know how to localise deeply while still thinking regionally. As the region’s digital economy matures, it has become a hard-won advantage.
From access to participation
If there’s one word that captures what digitalisation has done for everyday lives in the region, it’s access. Access to e-commerce, financial products, telehealth, and media has democratised services once reserved for the urban middle class.
Take GCash, for example. Its user base now exceeds the total number of bank account holders in the Philippines, radically expanding financial inclusion. Or Ruralnet, which has brought critical micro-insurance to communities that traditional insurers could never reach. Access enables participation, and participation fuels growth.
After two years of a tech winter and a number of headline-grabbing issues, the region’s startup ecosystem is experiencing a recalibration. Investors are shifting away from “growth at all costs” to “growth that lasts.”
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That means looking beyond vanity metrics and focusing on businesses with sound margins, transparent governance, and a commitment to ecosystem partnerships. The real opportunity now lies in sustainable, inclusive growth.
Building equity and inclusion into AI
AI holds enormous potential for Southeast Asia, but access remains uneven. Two barriers stand out: infrastructure and skills.
In terms of infrastructure, many countries still face limited storage, outdated hardware, low bandwidth, and high adoption costs for data centres and training. Without foundational digital systems, AI will remain the privilege of a few.
The second barrier is the skills gap. From basic data understanding to advanced model development, AI literacy is concentrated among a small segment of the population. Even though interest is high, there are too few structured pathways for reskilling.
Public and private institutions must treat AI education as essential infrastructure, investing not only in tools, but in people who can use and adapt them.
AI’s defining role in the next wave of transformation
Yet, even with these gaps, AI is no longer a distant promise; it’s already being integrated into everyday work. Employees are using large language models (LLMs) such as ChatGPT, Perplexity and Gemini for research and reporting. Banks and financial institutions are deploying AI for risk analysis and fraud detection. Logistics companies use data analytics to improve route efficiency.
We’re witnessing a shift from automation to augmentation, where AI doesn’t just replace tasks but enhances human capability to allow people to focus on higher-value, creative work.
Nowhere is this transformation clearer than in the Philippines’ business process outsourcing (BPO) and shared services sector. Once defined by workforce volume and personal interaction, these businesses are evolving fast. Today, your first point of contact might be an AI assistant or an AI-augmented agent.
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The challenge, and opportunity, is to rethink workforce strategy. As AI takes on routine tasks, it raises the bar for human capability. The future BPO agents aren’t being replaced; they’re becoming AI co-pilots trained to interpret, validate, and refine machine output.
Companies that proactively invest in this upskilling (including in data literacy, digital fluency, and human-machine collaboration) will not only protect jobs, but they’ll also create new categories of value creation.
Riding the AI wave with purpose
AI brings both disruption and opportunity. For investors, the goal should be to ensure innovation scales with people, not without them.
That means backing companies that value transparency, inclusion, and long-term sustainability over short-term hype. It means championing a future where automation complements human ingenuity. The next generation of Southeast Asian innovation will be defined not just by what we build, but by who we build it for.
Jecky Pelaez is a partner for Investments, Legal & Compliance at Kickstart Ventures
