The New ASEAN Talent Equation

Across Southeast Asia, a silent crisis is unfolding not of unemployment, but of job mismatch. While many countries aim to digitize their economies and build robust AI ecosystems, they face a looming shortage: nearly 9 million ICT professionals will be needed by 2030. In some places, over 75% of employers say fresh graduates are not job-ready. According to Mahusin and Priliadi (2024), while digital transformation is spurring growth across ASEAN, it also exposes severe gaps in the availability of skilled talent. For example, Thailand’s digital services sector grew by 37% between 2010 and 2020, yet its digital workforce grew by just 26% in the same period. Similarly, Indonesia's digital economy will need 9 million additional ICT professionals by 2030 a target complicated by foundational educational limitations and fragmented technical training.

Meanwhile, many professionals in healthcare, engineering, and education are migrating abroad, leaving domestic gaps that are increasingly difficult to fill.At the heart of this issue lies a paradox: more youth are graduating, but fewer are being trained for the jobs that actually exist. Education systems reward credentials rather than competencies. Labour markets demand adaptability, yet often encounter rigid qualifications. Added to this is the rise of remote work, reshaping the very concept of "mobility." Cities like Chiang Mai and Bali are now home to thriving digital nomad hubs. These professionals differ from traditional migrant workers they bring their work with them and expect stable internet, flexible visa options, and access to essential services. Some governments are responding with digital nomad visas, but regional harmonization remains limited.

While challenges in talent mobility persist (Graphic 1), new dynamics are also emerging particularly the rise of digital nomads across Southeast Asia. According to 2019 data from ASEAN Post and Nomad List, cities like Bali (4,069 digital nomads) and Chiang Mai (1,660) have become major hubs for remote professionals, far surpassing traditional capitals like Bangkok (521), Kuala Lumpur (114), and Jakarta (19). This shift underscores a change in how and where talent chooses to live and work, driven more by lifestyle flexibility and digital infrastructure than by conventional employment pathways.

* Assumptions and Notes:

A 15% annual growth rate was chosen as a moderate estimate, reflecting the impact of digital nomad visas
(in Malaysia, Thailand, and Indonesia since 2022), and the global surge in remote work trends.

This is a linear projection and should be recalibrated if real-world data (e.g., from surveys between 2021–2024) becomes available.

The CAGR can be adjusted according to specific national or city-level policy changes.

Source: Statista, modified by The Economist team, 2025

Southeast Asia has rapidly become a magnet for digital nomads and the numbers speak for themselves. According to 2019 data from ASEAN Post and Nomad List, cities like Bali (4,069 digital nomads) and Chiang Mai (1,660) have become major hubs for remote professionals, far surpassing capitals like Bangkok (521), Kuala Lumpur (114), and Jakarta (19). By 2025, Bali alone is projected to host over 9,000 digital nomads, more than double its 2019 figure.  This projected 15% annual growth is driven by the introduction of digital nomad visas in Indonesia, Thailand, and Malaysia, alongside the global rise of remote work. The 15% CAGR represents a moderate estimate, balancing optimism with policy reality across ASEAN cities. It reflects both regulatory momentum and the growing appeal of Southeast Asia as a flexible, affordable base for global talent. While the projections are linear, actual trends may vary depending on local policies and infrastructure. Cities that move early to support mobile professionals stand to become Southeast Asia’s next talent hubs.

This trend also suggests that regional mobility is expanding beyond formal Mutual Recognition Arrangements (MRAs), which currently benefit only around 1.5% of ASEAN’s labour force. Digital nomadism, while operating outside traditional frameworks, reveals the potential for borderless economic participation especially in creative, tech, and service industries. 

Without expanding talent mobility mechanisms and aligning education with industry needs, smaller ASEAN economies risk being left behind even as flexible talent flows like digital nomadism continue to grow. A more inclusive and adaptive strategy for regional talent development is therefore essential to support both traditional professionals and the emerging remote workforce. 

Structural and Legal Barriers

Beyond talent shortages, ASEAN’s mobility efforts are hampered by fragmented legal systems and uneven regulatory capacity. Despite the establishment of the ASEAN Economic Community (AEC) in 2015, the region still lacks a harmonized legal framework to enable seamless professional movement. 

Gaffar and Al Brashdi (2025) highlight the limits of the “ASEAN Way,” which emphasizes national sovereignty and voluntary compliance. This has led to inconsistent application of regional commitments such as MRAs, with wide variations in legal standards and enforcement.

Singapore demonstrates relatively high compliance, but countries like Indonesia, Malaysia, and Thailand face administrative hurdles, overlapping regulations, and weak enforcement. Restrictive visa regimes such as Thailand’s Alien Employment Act or Malaysia’s layered immigration process further complicate skilled labour mobility.

These barriers are even steeper for migrant workers in low-skilled or undocumented roles, who often face wage theft, exploitation, and exclusion from legal protections due to weak governance and corruption. Without stronger, binding frameworks, ASEAN’s labour market will remain fragmented and vulnerable.

Brain Drain: Losing the Best

Another major challenge is the continued outflow of ASEAN’s most skilled professionals to more developed economies, especially within the OECD. Ho et al. (2024) describe this as "positive selection" where the best-educated and most-skilled individuals leave, undermining domestic human capital.

While these professionals may send back remittances and share experiences, their departure deprives home countries of crucial talent in sectors like health, education, and technology.

To reverse this, ASEAN must improve institutional quality, expand access to world-class education, and create stronger intra-regional career pathways. Promoting regional talent circulation rather than one-way outflows can mitigate brain drain and strengthen regional resilience.

Strategic Initiative: ASEAN Talent Development and Mobility

The ASEAN Talent Development and Mobility initiative aims to enhance both the quality and mobility of the region’s workforce especially highly skilled individuals with tertiary education.

At its core is a harmonized visa suite designed to reduce legal bottlenecks and support regional labour integration. Key instruments include:

• ASEAN Business Entity (ABE) Visa
  Short and long-term visas that enable revenue and non-revenue business mobility across ASEAN for professionals linked to registered entities.

• ASEAN Digital Nomad Visa
  A 1–2 year visa for remote workers and freelancers from ASEAN countries, enabling location-independent work within the region without requiring local employer sponsorship.

• ASEAN Graduate Work Visa (AGWV)
  Allows recent ASEAN graduates to stay or move within the region for up to two years post-graduation, supporting early-career transitions.

• ASEAN Student Visa
  Standardizes student visa processing and work entitlements, facilitating academic mobility and skills development.

These mechanisms aim to address job mismatches, ease legal and administrative burdens, and stem brain drain. More broadly, they help build a cohesive, competitive regional labour market fit for the digital economy.

Country Spotlights

Vietnam & Cambodia 🇻🇳🇰🇭

The Skills We Lack: Education Isn’t Enough
The problem is not youth willingness but rather skills alignment. In some areas, fewer than half of vocational graduates work in their trained field. Technical education is underfunded, and industry-school collaboration is minimal. 

As the economy shifts toward services, technology, and green industries, large-scale retraining, curriculum modernization, and employer-driven apprenticeships are critical. Promising models, like rural digital bootcamps and hybrid high school programs, are emerging but remain small in scale. The private sector's role remains too limited to drive widespread reform.

Malaysia 🇲🇾

A Testbed for Regional Talent Mobility
Malaysia is quietly positioning itself as a launchpad for ASEAN’s digital mobility ambitions. Its DE Rantau Nomad Pass is already operational, offering a preview of what regionally harmonized talent visas could look like.

Existing initiatives include:

• A Digital Nomad Visa for remote professionals

• A Graduate Work Pathway for transitioning students into local employment

• A Business Entity Visa for entrepreneurs and tech founders

• A streamlined Student Visa infrastructure

Malaysia’s relatively inclusive criteria, solid digital infrastructure, and affordable living costs make it an ideal pilot ground for wider ASEAN integration. Its early openness to harmonizing with regional standards makes it a live prototype adaptive, affordable, and already underway.

References:
Fulcrum. (2024, December 21). Everyone, everywhere, all at once: The rise of digital nomads in Southeast Asia. ISEAS – Yusof Ishak Institute. https://fulcrum.sg/aseanfocus/everyone-everywhere-all-at-once-the-rise-of-digital-nomads-in-southeast-asia

Gaffar, H., & Al Brashdi, S. (2025). Legal frameworks for workforce mobility and employment regulations in ASEAN: Challenges and efforts in aligning domestic labour laws with regional standards. Labor History, 1–29. https://doi.org/10.1080/0023656X.2025.2507010

Ho, N. H. P., Ho, H. A., & Ho, Q. T. (2024). The relationship between education, internet access and ASEAN migration – a micro-founded gravity approach. The International Conference on Economics, Law and Government (ELG 2024). The Netherlands Programme and University of Economics Ho Chi Minh City.

Izzati, F. F., Larasati, R. S., Laksana, B. K. C., Apinino, R., & Azali, K. (2021). Kertas kebijakan pekerja industri kreatif Indonesia di bawah flexploitation: Pentingnya perlindungan negara terhadap pekerja dan penyatuan kekuatan pekerja sebagai sebuah kelas sosial. SINDIKASI x FNV Mondiaal.

Kok, M. (2025, March 25). Nomads in paradise: How Southeast Asia became a hub for remote workers. The Edge Malaysia. https://theedgemalaysia.com/node/729893

Litania, A., & Marsan, G. A. (2023). Attracting global talents: Bringing digital nomads and the highly skilled into ASEAN (Policy Brief No. 2023-11). Economic Research Institute for ASEAN and East Asia (ERIA). https://www.eria.org/research/attracting-global-talents-bringing-digital-nomads-and-the-highly-skilled-into-asean

Mahusin, M., & Prilliadi, H. (2024). Enhancing ASEAN's competitiveness: Strategies for talent mobility and cooperation in the digital economy (No. PB-2024-12).

Modern Diplomacy. (2025, April 22). Can Southeast Asia’s digital boom leave no one behind?https://moderndiplomacy.eu/2025/04/22/can-southeast-asias-digital-boom-leave-no-one-behind

Sao, C., & Mathul, K. (2025). ASEAN’s free mobility of professional labor: Benefits and challenges for Cambodia. Journal of Mathematics Instruction Social Research and Opinion, 4(2), 305–318. https://journal-gehu.com/index.php/misro/article/view/397

Singapore Global Network. (n.d.). https://singaporeglobalnetwork.gov.sg/

World Economic Forum. (2025). Future of jobs report 2025. https://www.weforum.org/reports/future-of-jobs-report-2025/

Yayasan Biji Biji. (n.d.). https://www.biji-biji.com/

Appendix:

Formula Estimation Calculation