By Naina, 28th May 2026

A profound economic transformation is reshaping the developing world, and its principal engine is digital. For most of the modern history of economic development, the pathway from low-income to middle-income and ultimately to high-income status followed a recognisable sequence: agricultural modernisation, industrialisation, the build-out of physical infrastructure and the progressive development of services. The economies that are rising most rapidly across Asia and Africa in 2026 are following a different trajectory, one in which digital infrastructure has become the foundation on which economic development is being built, in which financial inclusion has been achieved through mobile technology rather than physical banking infrastructure, and in which entire categories of economic activity have leapfrogged the developmental stages that earlier generations of economies passed through. Southeast Asia's digital economy surpassed 300 billion US dollars in gross merchandise value in 2025, representing 7.4 times GMV growth and 11.2 times revenue growth over a decade, with revenues reaching approximately 135 billion dollars. Africa's mobile money transactions have exceeded 900 billion US dollars annually, underlining the continent's leadership in digital financial services. Nigeria's digital economy alone is projected to reach 18.3 billion US dollars by 2026, nearly doubling from 9.97 billion in 2021. India's digital public infrastructure has become a global export model, with over twenty-four countries having signed cooperation agreements.

What sits beneath these aggregate figures is a deeper transformation in how economic development occurs. The combination of mobile-first connectivity, the rise of digital public infrastructure, the explosive growth of fintech and financial inclusion, the expansion of e-commerce and digital services, the integration of artificial intelligence into developing-economy contexts and the broader demographic dynamics of the world's youngest populations has produced a model of economic development that earlier generations of development economics did not anticipate. The decisions being made now, in the policy frameworks of rising digital nations, in the infrastructure investments supporting digital transformation and in the broader strategic positioning of these economies within the global digital architecture, will define the trajectory of economic development across Asia and Africa for the next generation.

The Southeast Asian Digital Surge

Southeast Asia has emerged as one of the most consequential digital economic regions globally. The region's digital economy surpassed 300 billion US dollars in gross merchandise value in 2025, exceeding the inaugural forecast made a decade earlier by 150 percent and maintaining steady growth of approximately 15 percent year-on-year. As the world's fifth-largest economy with a population of over 680 million, Southeast Asia has undergone a remarkable digital transformation over the past decade, with the number of people online doubling across its six biggest economies since 2016. The digital economy is on track to reach approximately 600 billion US dollars in gross merchandise value by 2030.

Indonesia has emerged as the dominant force in the regional digital economy. The country's internet economy surged to become the largest in the region by a wide margin, accounting for approximately 99 billion US dollars of gross merchandise value in 2025. Thailand has established itself as the second-largest regional digital economy at approximately 56 billion dollars, followed by a second tier of markets including Vietnam and Malaysia at approximately 39 billion dollars each. The e-commerce sector remains the largest contributor to the regional digital economy, with the broader Southeast Asian e-commerce market reaching approximately 159 billion US dollars and projected to expand toward 215 to 230 billion dollars in 2026.

The composition of the Southeast Asian digital economy has matured significantly. E-commerce, online travel, food and transport, online media and digital financial services have all grown into substantial categories. Online travel has continued to grow, with gross merchandise value projected to hit approximately 51 billion US dollars, fuelled by high airfares and accommodation rates and by the expansion of visa-free and e-visa schemes that have boosted regional tourism. Online media is on track to reach approximately 34 billion dollars, with advertising growth fuelled by the rise of retail media networks and the increasing maturity of video commerce and AI-powered advertising formats. The broader monetisation stack, including digital payments and platform services, has progressively deepened the economic value generated by the regional digital economy.

The artificial intelligence dimension has emerged as one of the most consequential recent developments. Southeast Asia is rapidly positioning itself at the forefront of the global AI transformation, driven by a thriving ecosystem of adopters, innovative startups and major investors. Consumer interest in AI topics across the region is three times higher than the global average. Singapore, Brunei, the Philippines, Indonesia and Malaysia already rank among the world's top twenty for interest in multimodal AI. The combination of high AI adoption among workers and startups and the rapid increase in data-centre capacity has positioned the region as a global hotspot for the broader AI transformation.

The African Digital Transformation

Africa has emerged as one of the most consequential and most rapidly transforming digital economic regions globally. The combination of a population of more than 1.4 billion people, the world's youngest workforce, rapid technological adoption, infrastructure investment and demographic growth is reshaping the continent's role in the global economy. According to the United Nations, Africa's population is expected to almost double by 2050, potentially creating one of the world's largest consumer and labour markets. The debate among analysts is no longer whether Africa will emerge as a major economic force, but how quickly that transformation will unfold, with digital technology serving as one of the continent's most powerful economic drivers.

The African fintech revolution has been the most consequential dimension of the continent's digital transformation. Africa has become one of the fastest-growing fintech markets in the world, with mobile money transactions exceeding 900 billion US dollars annually. In many countries, mobile finance has expanded far more rapidly than traditional banking infrastructure, producing financial inclusion outcomes that earlier generations of development policy could not achieve. M-Pesa, the pioneering Kenyan mobile money platform, continues to demonstrate how mobile transaction data can reshape national financial systems. The broader African fintech ecosystem includes more than 150 platforms and services across the continent, including Airtel Money, MTN Mobile Money, Orange Money, Paga, TerraPay, CinetPay and a long list of additional providers.

The African fintech leadership has produced credible global companies. Companies such as Flutterwave and Chipper Cash are building digital ecosystems that support payments, lending, insurance and cross-border transactions. Nigeria has emerged as the continent's startup leader, hosting five unicorns including Interswitch, Flutterwave, OPay, Andela and Moniepoint, reflecting strong private-sector innovation driving digital transformation. Nigeria's internet penetration reached approximately 107 million users in early 2025, driven largely by mobile-first connectivity which accounts for over 90 percent of internet access nationwide. The telecommunications sector contributed approximately 9.2 percent to Nigeria's real GDP in the second quarter of 2025.

The African digital infrastructure has expanded rapidly. Major subsea cable systems including Equiano and 2Africa have increased broadband capacity across the continent. Nigeria's eight submarine cables deliver over 40 terabits per second of capacity, enabling data-intensive applications and cloud-service adoption. The e-commerce sector, anchored on platforms including Jumia and Takealot, is projected to exceed 75 billion US dollars by 2028. The broader expansion of digital infrastructure, combined with the continent's demographic dynamics and the rising integration of digital technology into African economic activity, has produced a transformation that is reshaping how African economies grow, trade, govern and compete globally.

The policy dimension of the African digital transformation has been progressively maturing. A new report from research and policy organisation DigitA suggests that 2026 could mark a turning point for the continent's digital economy, as governments begin operationalising frameworks for Digital Public Infrastructure. The African Union's Digital Transformation Strategy for 2020 to 2030 has provided the broader framework within which African nations are translating digital ambition into practical reforms. More than fifteen African nations have published or launched national strategies, roadmaps or policies to govern AI development. The Smart Africa Alliance, now joined by thirty-two countries, is working to standardise AI systems, while the African Union has developed a Continental AI Strategy for 2025 to 2030. Both initiatives aim to build African self-reliance in AI and avoid data colonialism, in which Africa would become dependent on AI systems developed elsewhere.

The Indian Digital Public Infrastructure Model

India has emerged as the global reference point for digital-public-infrastructure-led development, and its model has become one of the most consequential exports to the rising digital nations of Asia and Africa. The combination of the Aadhaar biometric identity system, the Unified Payments Interface real-time payment infrastructure, the Account Aggregator framework for consent-based data sharing, the broader JAM Trinity of Jan Dhan financial inclusion, Aadhaar identity and Mobile connectivity, and the Open Network for Digital Commerce has produced the most comprehensive digital public infrastructure of any major economy. The Indian model has demonstrated that population-scale digital infrastructure can be built as a public good rather than as proprietary private infrastructure, with significant implications for the broader development of digital economies globally.

The export of the Indian digital-public-infrastructure model has become a meaningful element of Indian economic diplomacy and a consequential influence on the rising digital nations of Asia and Africa. Over twenty-four countries have signed memoranda of understanding with India on digital-public-infrastructure cooperation. The Indian model has been adopted or adapted by countries across Africa, Southeast Asia, the Middle East and Latin America seeking to replicate the financial inclusion, the digital payment efficiency and the broader economic benefits that the Indian system has produced. The strategic significance of this influence extends well beyond the immediate technical cooperation, positioning India as one of the principal architects of the digital infrastructure that will support economic development across the broader developing world.

The Indian experience has provided a powerful demonstration of digital-led development. The Unified Payments Interface, processing over 21 billion transactions monthly and serving more than 500 million users, has demonstrated the transformative potential of population-scale digital payment infrastructure. The broader Indian digital economy, including the expansion of digital financial services, e-commerce, digital government services and the rising integration of artificial intelligence into Indian economic activity, has provided a comprehensive model for how digital infrastructure can drive broad-based economic development. The lessons that the Indian experience provides have direct relevance for the rising digital nations of Asia and Africa seeking to replicate the development outcomes that the Indian model has produced.

The Leapfrogging Phenomenon

The most consequential economic characteristic of the rising digital nations is the leapfrogging phenomenon, in which developing economies have bypassed the developmental stages that earlier generations of economies passed through. The most visible example has been in financial services, where mobile money and digital payment infrastructure have provided financial inclusion to populations that never had access to traditional banking infrastructure. The progression from no financial access to sophisticated digital financial services, without passing through the intermediate stage of physical banking infrastructure, represents one of the most consequential examples of developmental leapfrogging in modern economic history.

The leapfrogging phenomenon extends well beyond financial services. The expansion of mobile-first internet access has provided connectivity to populations that never had access to fixed-line telephone or broadband infrastructure. The development of digital government services has provided citizen services to populations that never had access to efficient physical government infrastructure. The expansion of e-commerce has provided market access to producers and consumers that never had access to sophisticated physical retail infrastructure. The integration of digital health, digital education and the broader range of digital services has provided access to services that earlier generations of development could not deliver at scale.

The economic implications of leapfrogging are significant. The developing economies that have leapfrogged through digital infrastructure have, in many cases, achieved development outcomes more rapidly and at lower cost than the sequential development model would have produced. The combination of lower infrastructure cost, faster deployment and the broader network effects of digital infrastructure has compressed the timeline of economic development in ways that earlier generations of development economics did not anticipate. The strategic question for the rising digital nations is whether the leapfrogging model can be sustained and extended across the broader range of economic activities, or whether the structural constraints that have historically limited developing-economy growth will reassert themselves.

The Investment and Capital Dimension

The investment dimension of the rising digital nations has been one of the most consequential aspects of the broader transformation. Global investment in the digital economy has surged, although it remains unevenly distributed. The concentration of digital investment in a small number of leading economies has been a persistent feature, with approximately 70 percent of digital investment in Africa directed toward the continent's five most digitally advanced countries. In 2024, Africa saw only eighteen fintech projects compared to 206 in developing countries in Asia and attracted just 3 percent of total data-centre investment. The market dominance of a few firms, mostly headquartered in the United States and China, has raised concerns about competition and the crowding out of local players.

The Southeast Asian investment environment has matured significantly. The increase in late-stage investments, the largest since the second half of 2023, has been driven by both private equity activity and corporate investments. While early-stage funding has continued to contract, growth-stage deployment has stabilised, with the average deal size of growth-stage investments increasing, reflecting greater discipline and concentration of capital into higher-quality businesses. A majority of investors expect funding to increase in Singapore, Vietnam and Malaysia, with particular emphasis on software and services as well as AI and deep tech. The broader investment environment has been underpinned by realistic entry valuations, proven monetisation models and clearer paths to profitability for established digital businesses.

The challenge of investment concentration remains significant. By 2024, most developing countries had national digital strategies, with 86 percent overall and 80 percent of least-developed countries having such strategies, up from under half in 2017. The policy frameworks have progressively matured, but the investment required to translate these frameworks into operational digital infrastructure has been unevenly distributed. The continued development of the rising digital nations will depend significantly on whether the investment required to build comprehensive digital infrastructure can be mobilised across the broader range of developing economies, rather than concentrated in the small number of leading markets.

The Governance and Regulatory Dimension

The governance and regulatory dimension has emerged as one of the most consequential aspects of the rising digital nations. The use of digital technology by businesses and individuals has outpaced governments' development of regulatory frameworks across both Asia and Africa. As regulation catches up with digital expansion, regulated sectors are likely to experience stronger and more sustainable growth. This pattern has already been visible in fintech, where the development of clear regulatory frameworks has supported the sustainable expansion of digital financial services. The African nations with the most sophisticated data-regulation regimes, including Kenya, Mauritius and South Africa, have become the continent's digital-data hubs, illustrating the broader relationship between regulatory sophistication and digital economic development.

The data-governance dimension has been particularly consequential. The rising digital nations have increasingly recognised that data has become one of their most valuable strategic assets, and that the governance of data infrastructure is central to capturing the economic value of digital transformation. The shift from being passive users of data originating elsewhere toward the active governance of digital infrastructure has become one of the central strategic priorities of the rising digital nations. The broader concern about data colonialism, in which developing economies would become dependent on digital systems developed elsewhere, has shaped the regulatory approach of many rising digital nations, with significant implications for the broader architecture of the global digital economy.

The artificial intelligence governance dimension has emerged as the newest frontier of digital regulation. The rising digital nations have increasingly developed national AI strategies, with AI development being directed at specific economic sectors including agriculture, education, healthcare, public services and security. Egypt's National Artificial Intelligence Strategy, introduced in 2021, Ghana's National Artificial Intelligence Strategy for 2023 to 2033 with its slogan AI Ready Ghana, and the broader range of national AI strategies across both Asia and Africa have reflected the rising recognition that AI capability will be central to the next phase of digital economic development. The continued evolution of AI governance across the rising digital nations will significantly shape the trajectory of digital economic development through the rest of the decade.

The Risks and the Frictions

Several risks warrant clear recognition. The first is the digital-divide dimension. Despite the remarkable expansion of digital connectivity, significant gaps remain between those with reliable, high-quality internet access and those without. The concentration of digital investment in a small number of leading economies, the persistent gaps in digital infrastructure across rural and underserved areas, and the broader inequality in digital access have produced a digital divide that, if not addressed, could entrench rather than reduce broader economic inequality. The continued investment in expanding digital access, particularly to underserved populations, will be central to ensuring that the benefits of digital transformation are broadly distributed.

The second risk is the infrastructure-reliability dimension. A strong digital economy relies on stable, affordable and scalable power supply, reliable connectivity and the broader physical infrastructure that digital activity requires. Unreliable electricity remains one of the greatest obstacles to sustained digital growth across much of Africa, with frequent power outages, high electricity costs and limited grid access hindering the expansion of data centres, broadband networks and digital platforms. The continued investment in the foundational physical infrastructure that supports digital activity will be central to sustaining the digital transformation across the rising digital nations.

The third risk is the cybersecurity and trust dimension. The rapid expansion of digital activity has produced cybersecurity vulnerabilities and trust deficits that affect both the adoption of digital services and the willingness of investors to expand into emerging digital markets. The trust deficit not only slows fintech and e-commerce adoption but also discourages foreign investors and technology firms from expanding into emerging markets. The continued development of cybersecurity capability, including strong national cybersecurity laws, investment in cybersecurity talent and enhanced cross-border intelligence sharing, will be central to sustaining the digital transformation.

The fourth risk is the concentration and dependency dimension. The market dominance of a small number of firms, mostly headquartered in the United States and China, has raised concerns about competition and the crowding out of local players. The risk that the rising digital nations could become dependent on digital infrastructure, platforms and AI systems developed elsewhere, rather than building indigenous capability, has been one of the central strategic concerns of the broader digital transformation. The continued development of indigenous digital capability, supported by appropriate policy frameworks and investment, will be central to ensuring that the rising digital nations capture the economic value of their digital transformation.

The Direction of Travel

The rise of digital nations across Asia and Africa represents one of the most consequential economic transformations of the present generation. The combination of mobile-first connectivity, the rise of digital public infrastructure, the explosive growth of fintech and financial inclusion, the expansion of e-commerce and digital services, the integration of artificial intelligence and the broader demographic dynamics of the world's youngest populations has produced a model of economic development that is reshaping the broader trajectory of the developing world. The implications run through every dimension of economic development, of financial inclusion, of the broader integration of developing economies into the global digital architecture and of the changing distribution of economic activity globally.

For India specifically, the rise of digital nations across Asia and Africa represents both a strategic opportunity and a consequential responsibility. The Indian digital-public-infrastructure model has become one of the most influential exports to the rising digital nations, positioning India as one of the principal architects of the digital infrastructure supporting economic development across the broader developing world. The continued export of the Indian model, the broader engagement of Indian technology companies with the rising digital nations and the strategic positioning of India as a credible alternative to the dominant American and Chinese digital models have produced strategic positioning that earlier generations of Indian foreign economic policy could not have approached.

The longer-term implications extend beyond the immediate economic developments. The rise of digital nations across Asia and Africa is progressively reshaping the broader distribution of economic activity globally. The economies that are rising most rapidly through digital transformation will progressively become more consequential participants in the global economy, with significant implications for the broader architecture of global trade, investment and economic governance. The combination of demographic dynamics, digital transformation and the broader integration of these economies into the global digital architecture suggests that the rising digital nations of Asia and Africa will be among the most consequential drivers of global economic growth through the rest of the present decade and beyond.

The decisions being made now, in the policy frameworks of the rising digital nations, in the infrastructure investments supporting digital transformation, in the broader strategic positioning of these economies within the global digital architecture and in the international cooperation supporting digital development, will define the trajectory of economic development across Asia and Africa for the next generation. The rise of digital nations is no longer a forecast. It is the operational reality of the present moment. The transformation has begun. The structural change is real. The implications, for the rising economies themselves, for the broader global economy and for the changing distribution of economic activity globally, will continue to develop through the rest of the present decade and beyond.

The economies, the populations and the broader institutional architecture that have built the capability to participate effectively in the digital transformation will be the principal beneficiaries. The work of building that capability continues, and the next chapter of economic development across Asia and Africa is being written, in real time, in the digital infrastructure being deployed, in the fintech platforms being scaled, in the digital government services being launched and in the broader integration of digital technology into the economic activity of the rising digital nations. The economic development of 2030 will look fundamentally different from the economic development models of earlier generations. The architecture of that future is being built now, mobile connection by mobile connection, digital payment by digital payment, in one of the most consequential economic transformations of the present generation. The rise of digital nations across Asia and Africa has emerged as one of the defining economic stories of the present decade, and its continued development will reshape the broader trajectory of global economic development for the next generation.