Empowering the transition to the formal economy was a 2024 APEC priority under Peru's Presidency.
Informality is a longstanding challenge, representing 13.4% of APEC's overall GDP, varying significantly from 8.5% in the United States to 59% in Peru, where it poses a particularly difficult challenge.
"Informality limits economic potential and holds back better opportunities for millions," said ABAC Chair Julia Torreblanca on Tuesday.
"This report offers a fresh look at practical digital solutions that are having an impact," she added.
Over the next decade, as digital platforms drive 70% of new global value, the potential for micro-, small, and medium-sized businesses (MSMEs) in the formal digital economy has never been clearer.
"We wanted to take stock of whether rapid acceleration of digitalization could help informal workers and businesses transition to the formal economy," said Jan De Silva, ABAC Canada member and Chair of ABAC’s Digital Innovation Task Force.
"Our findings show that digital tools are showing promise in facilitating a transition to formality," De Silva added.
This first-of-its kind report highlights how digital tools are simplifying bureaucratic processes, increasing access to financing, and expanding MSMEs' market reach through e-government procurement, e-payments, e-commerce platforms, and platform economy applications.
It includes a comprehensive analysis of the state of informality and digitalization in each APEC economy, offering promising digital practices and policy actions to empower MSMEs in this transition.
"By addressing the challenges of informal economy with digital solutions, APEC has a powerful opportunity to promote inclusive growth across the region. We are pleased to deliver this work as a guide," Torreblanca concluded.
21 leading economies
APEC is made up of:
Australia, Brunei Darussalam, Canada, Chile, People's Republic of China, Hong Kong, Indonesia, Japan, Republic of Korea, Malaysia, Mexico, New Zealand, Papua New Guinea, Peru, the Philippines, the Russian Federation, Singapore, Chinese Taipei, Thailand, the United States, and Viet Nam.
Together, they account for 62% of world's GDP, 48% of global trade in goods and services, plus 38% of the planet's population.
Editor's note: Information provided by the APEC Business Advisory Council (ABAC).
(END) NDP/MVB