“Emerging markets” is a term that refers to an economy that experiences considerable economic growth and possesses some, but not all, characteristics of a developed economy. Emerging markets are countries that are transitioning from the “developing” phase to the “developed” phase.

The Morgan Stanley Capital International Emerging Market Index lists 26 countries. They are Argentina, Brazil, Chile, China, Colombia, Czech Republic, Egypt, Greece, Hungary, India, Indonesia, Korea, Malaysia, Mexico, Pakistan, Peru, Philippines, Poland, Qatar, Russia, Saudi Arabia, South Africa, Taiwan, Thailand, Turkey, and United Arab Emirates.

Emerging Asia showed a robust economic performance with an average growth of 5.8% in 2019, supported by a fast-growing urban population, strong FDI inflows and rapid digital transformation. However, the outbreak of the Coronavirus pandemic, combined with persistent trade tensions and slowing demand from China are hampering economic prospects. Growth in 2020-24 in Emerging Asia was expected at 5.7% on average, according to the Economic Outlook for Southeast Asia, China and India 2020, but growth projections have been slashed to just over 2% for 2020.

Smart cities initiatives and smart technologies have catalysed private investment in recent years, particularly by technology firms, telecommunications, utilities and transport companies, and real estate developers, amongst others. Companies have increasingly contributed to this trend by investing, together with governments, in upgrading ICT infrastructure and providing innovative solutions to address urban policy challenges. Collaborative ecosystems that promote public-private partnerships and co-operation between national and sub-national governments are essential to adopt smart technologies, promote data sharing and encourage more private investment. For example, through Smart Cities Mission, the Indian government leveraged private-sector expertise to meet infrastructure demand through joint-ventures with multinational companies such as Mahindra and Infosys. Similarly, the Master Plan on ASEAN Connectivity 2025 allowed the private sector to plays an important role in funding and data sharing in Southeast Asia. 

Sound policy frameworks that promote innovation and competition are equally important. Open government data holds the potential to boost innovation for firms and the public sector alike. Agile regulation and regulatory “sandboxes” can further promote innovation while protecting consumers. However, several barriers to private investment in smart cities remain. For example, businesses are facing a shortage of highly skilled workers, particularly in Cambodia, Indonesia and Thailand, while fixed broadband speeds in the majority of ASEAN countries are well below the global average.