Across Southeast Asia, a unique form of entrepreneurship is unfolding in night markets, back alleys and live streaming booths. The enormous numbers of successful entrepreneurs in these places are not waiting for full-service digital infrastructure. Instead, they are blending hardware and software with QR codes taped to banana leaves, creating social media streams from makeshift stalls and entering mobile messaging orders scribbled into cash ledgers. These entrepreneurial activities are physical and digital. It is phygital entrepreneurship: the fusion of digital and physical practices in everyday entrepreneurial activities.
This form of enterprise does not fit neatly into dominant models of digital entrepreneurship. Rather than prioritize scalability, formal infrastructure or platform-native innovation, performance is defined in terms of transaction speed, improvisation, relational trust and cultural familiarity. Phygital entrepreneurship does not lag in terms of digital transformation but reimagines it.
Phygital entrepreneurship is especially intense in Southeast Asia. It fosters entrepreneurial ecosystems that reveal new approaches to entrepreneurship. It defies the assumption that progress requires full immersion in platform economies. Rather, it heralds an alternative paradigm in which technology is domesticated, reinterpreted and made more meaningful in the context of local rhythms, trends and human activities.
Improvisation as strategy
Much of the discourse around entrepreneurship in emerging economies is still coloured by a deficit mindset. When rural vendors mix cash payments with mobile messaging apps and avoid full e-commerce integration, it is framed as deficient adoption. Yet, it is often a deliberate and strategic response to infrastructural inconsistency, low digital literacy or customer preferences.
In many towns and cities, entrepreneurs use mobile messaging platforms to coordinate sales while still relying on handwritten ledgers and personal delivery networks. It is more like pragmatic bricolage than inefficiency. The entrepreneurs are using what is available, adapting quickly, but remaining embedded in a values-laden local system.
In settings such as religious festivals or night markets, QR codes appear not through top-down digitalization programs but through peer-led experimentation. Vendors borrow smartphones to test mobile payments, learn informally from neighbours and adapt based on trial and error. These kinds of micro-innovations are usually unrecorded, and they form an infrastructure of trust that promotes scalability and broader participation.
Trust-anchored innovation
Digital innovation does not grow in isolation. It benefits from a kind of trust not found in user interfaces, privacy policies or service agreements. Relationships, shared routines and the steady presence of leadership promote its impact on entrepreneurship.
For entrepreneurs in phygital ecosystems, digital tool adoption usually begins with a recommendation from a relative, an endorsement by a respected elder or the natural fit of a tool into daily life. During Ramadan bazaars, mobile payment promotional campaigns might not be announced by email but instead through the familiar voice of a mosque loudspeaker. Local signals give the technology legitimacy that digital marketing cannot achieve.
In this way, informal trust is a vital form of infrastructure. The entrepreneurs are not rejecting digital platforms. Rather, they engage with them in ways that protect relationships and preserve values. This kind of intentional usage and application is a powerful act of agency and a way of navigating risk, managing visibility, transforming resources and curating value.
Gendered gateways and proxy use
Phygital entrepreneurship also reveals the layered ways in which access to technology is mediated by gender, religion and family structures. In many conservative settings, women run the day-to-day operations of businesses but rely on male relatives to manage digital tools. They do not control mobile wallets or online storefronts, but they are the operational foundation. This phenomenon reframes traditional approaches to digital inclusion. Empowerment is not individual ownership of devices or accounts but involves informal negotiations, silent labour and shared control.
On these grounds, some ecosystems include women-only digital cooperatives, safe tech spaces and peer-led ICT training embedded within cultural and religious contexts. These initiatives acknowledge that inclusion requires more than access; it requires transforming the full diversity of the social architecture around technology into entrepreneurial performance.
Designed for local culture
Phygital entrepreneurship reveals how digital inclusion intertwines with gender roles, religious norms and family dynamics. In many conservative communities, women are the heart of daily business operations. They manage workflows, engage with customers and maintain operations. The businesses would not perform well without the contributions of women. When it comes to digital tools, the involvement of male relatives also becomes necessary. The mobile wallets, online storefronts and login credentials are often in the hands of fathers, husbands or brothers.
This kind of proxy entrepreneurship does not fit the typical image of digital empowerment. There is no true personal ownership or independence. Instead, there is negotiation and collaboration. There is more equality in the control of the business, although recognition is uneven. Over time, this balance is beginning to shift in some ecosystems, where women are creating their own digital cooperatives and peer-to-peer learning circles. Meanwhile, community-based technology training is becoming more popular in familiar cultural and religious contexts. These efforts reflect a human approach to phygital entrepreneurship, where digital tools are woven gently into communities. The tools are introduced in familiar places and shaped by shared values and lived traditions. In this sense, inclusion is not simply about owning a digital device or using it independently. It entails the social fabric in which technology is embedded as a means to make room for more diverse ways of belonging.
A new approach to entrepreneurship
Phygital entrepreneurship in Southeast Asia offers a way to rethink how we understand innovation and business. It does not merely disrupt or pursue riches. Instead, it shows how innovation can unfold more quietly, shaped by daily life and the cultures of real communities. Creativity can take root in practices that blend tradition with change, physical with digital and personal with practical.
Rather than enduring the pressure to scale higher, many of these entrepreneurs build on trust, flexibility and a sense of place in order to scale more deeply. Performance is defined in terms of the ability to endure, to serve others and participate in a community. Success does not entail leaving or reforming their environment but weaving business into it.
This kind of entrepreneurship challenges scholars to ask: what counts as innovation? It invites policymakers to work more closely with local creators. It calls on development agencies to support what is meaningful.
Toward phygital policymaking
Supporting this form of entrepreneurship calls for a spirit of humility, willingness to adapt and deep awareness of the local environment. Policy approaches work best when they are grounded in the everyday lives of people. Instead of pouring resources into sweeping digital campaigns, governments can focus on spaces that communities already trust and gather in, such as festivals, markets and places of worship. These are the living centres of innovation and entrepreneurial energy. Simple initiatives like pop-up Wi-Fi zones, training booths for QR code usage or peer-led mentoring circles can build upon existing community infrastructure, helping entrepreneurs grow through familiar tools and valued relationships.
For some women entrepreneurs, receiving tools like smartphones is only part of the equation. Access and use are often shaped by household power dynamics, community expectations and informal rules. These factors can influence whether such tools lead to tangible opportunities.
Most importantly, policy must recognize that many people are already running businesses that contribute to society but are not formally registered. Governments can meet them where they are in order to make policy that protects without stifling, opens more doors to microfinance and helps keep digital spaces safe.
Reimagining the entrepreneur
Phygital entrepreneurship offers a new way to conceptualize entrepreneurship, alongside the many other forms of entrepreneurship that make up the field. It entails weaving together the past and present in ways that harmonize with the everyday lives of entrepreneurs. This approach reveals how innovation can emerge from lived experience as well as disruption. It shows how communities adapt, take risks and create value by transforming the resources at hand. These practices are vital threads in the broader fabric of entrepreneurship and have the potential to inform many kinds of entrepreneurs.
