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The Asian digital economy has reached a watershed moment in the wake of the COVID-19 pandemic. From major retailers to startup entrepreneurs, the Internet is now the primary tool for businesses to understand their markets and to sell their goods and services.

It is no secret that lockdowns caused an irreversible step change in the digitalization of commerce. But there is a growing danger that policymakers will miss the window to exploit the economic growth potential this shift represents because they have such a poor grasp of what is going on in the digital economy.

More than half of the world’s consumers have increased their online shopping because of the pandemic—and particularly in emerging markets. This was true for 80% of Chinese and 50% of South Korean consumers, according to a recent survey by the United Nations. As professor Erik Brynjolfsson of Stanford University recently described it: “The pandemic has compressed a decade’s worth of digital innovation…into less than a year.”

The digital transformation of the past 18 months is striking because the digital laggards are finally getting on board. Organizations that were reluctant to adopt digital solutions, from small family businesses to big banks, realized they could no longer postpone the inevitable. From museums to restaurants, businesses have fought to survive by investing in digital technologies and transforming business operations to bring their product offerings online.

This acceleration in e-commerce matters because it is the gateway to a host of productivity enhancing digital spillovers. Studies show it leads to improvements in digital infrastructure, financial inclusion, ICT skills, and business regulation. At the same time, e-commerce fuels a virtuous cycle of innovation, as “big data” feeds new ideas and applications in artificial intelligence.

Yet Asian governments risk missing these benefits. As the crisis landed in 2020, Asian governments correctly prioritized short-term responses to the pandemic. Now, as they look to the future, it is more challenging to address the longer-term strategic requirements for a sustainable post-COVID recovery.

There is a grave lack of understanding of the scale of e-commerce activity and the operations of the digital economy. In fact, there is no consensus in the region on what the digital economy is, and no one quite understands how large it has grown. As the late management consultant Peter Drucker is reputed to have said: “If you can’t measure it you can’t manage it.”

Official statistics are designed to account for the more traditional aspects of the digital economy: hardware and telecom equipment manufacturing and the information and services sectors. But they paint a woefully inadequate picture of the more dynamic, fast-growing trends, such as digital intermediary platforms, cloud-based digital service providers, and digital content providers. These are the technological innovations that are disrupting old business models, expanding market frontiers and making workforces more productive—but they require a conducive policy environment to flourish in.

When policymakers are blind to the value generation and jobs growth in these dynamic sectors, it limits their ability to support digital entrepreneurs and tech startups and ultimately leads to a loss of competitiveness for local businesses. R&D investment strategies are ill-informed, regulators cannot track their effectiveness, and digital entrepreneurs and tech startups are not given the space and support that would help get them off the ground.

If governments are serious about leveraging the digital economy to fuel economic growth, they need to upgrade their understanding of what is taking place within it. This is no mean feat, but it starts with quite simple changes to the questionnaires in established statistics collection instruments, such as annual business surveys, labor force surveys, and household surveys.

The modern digital economy brings new questions about ICT capital expenditure, the money businesses are spending on digital services, the share of sales via digital platforms, and the skills composition of the workforce. This would lead to valuable insights into the scale and trajectory of the digital economy.

The U.S. Bureau of Economic Analysis has constructed a digital satellite account to measure the U.S. digital economy, including robust statistics on e-commerce activity, digital infrastructure, and the provision of digital services. In August 2021, the digital ministers of the G20 reaffirmed their pledge to harness the potential of “digitalization for a resilient, strong, sustainable, and inclusive recovery.” There is a path forward, but these words are scarcely—or only extremely slowly—translated into action.

Asian businesses are riding the wave of digitalization, propelled by an acceleration in e-commerce in the past 18 months. The longer-term economic recovery will depend on successfully leveraging the power of the digital economy. If Asian economies cannot build the statistical foundation to do that, they will fall behind the economies that can.

James Lambert is director of economic consulting in Asia for Oxford Economics. Anh Tran is an Oxford Economics economist.