Digital regulations and the startup ecosystem in Asia

Oxford Economics was commissioned by Digital Prosperity Asia to examine how digital regulations influence growth and innovation in startup ecosystems across Asia.

Digital technologies are reshaping economies across Asia—driving new business models, accelerating innovation, and redefining how firms scale across borders. At the same time, governments are expanding digital regulatory frameworks to safeguard data, strengthen cybersecurity, and govern emerging technologies such as artificial intelligence (AI).

These twin trends are converging. Digital regulation is no longer a background condition—it is a defining feature of the startup operating environment. How these regulations are designed will play a critical role in shaping the trajectory of Asia’s startup ecosystems.

New research by Oxford Economics finds that 74% of startups across India, Malaysia, and South Korea, report that digital regulations increase compliance-related costs. Further, 66% say resources are being diverted away from innovation to compliance. The study also estimates that a shift to more restrictive regulatory approach could reduce startup formation and venture capital investments over the next decade.

The full report, along with deeper insights—including findings from a survey of 1,550 ecosystem participants, expert interviews, and novel quantitative modelling—can be accessed at Digital Prosperity Asia’s website here.