Without Regional Collaboration, Southeast Asia Will Struggle in the Fourth Industrial Revolution | Asian Development Bank

Without Regional Collaboration, Southeast Asia Will Struggle in the Fourth Industrial Revolution

News Release | 14 November 2017

MANILA, PHILIPPINES (14 November 2017) — To successfully deal with the profound challenges of the Fourth Industrial Revolution, member states of the Association of Southeast Asian Nations (ASEAN) need to improve their collaboration. This is the conclusion of a new joint report launched today by the Asian Development Bank (ADB) and the World Economic Forum.

The report, ASEAN 4.0: What Does the Fourth Industrial Revolution Mean for Regional Economic Integration?, analyses how emerging technologies will reshape Southeast Asia, and identifies actions for ASEAN leaders to prepare for the deep transformations that lie ahead. The report acknowledges the many existing national strategies for the Fourth Industrial Revolution, such as Thailand 4.0 or Singapore’s Smart Nation initiative. But it argues that ASEAN must think at the regional level, not the national level.

The treatment of cross-border data flows, for example, is one of the pressing issues highlighted by the report. As data currently are prevented from flowing seamlessly across borders, new technologies such as telemedicine or the internet of things will be limited in their potential.

The report offers seven recommendations for ASEAN leaders to prepare their institutions for the coming challenges associated with the Fourth Industrial Revolution:

1. The ASEAN Secretariat has to become a “platform organization” that allows for the integration of input from multistakeholder groups of experts.

2. The secretariat should delegate more activities to affiliated functional bodies.

3. Long-term blueprints should be replaced with 3-year rolling plans. Considering the speed of the Fourth Industrial Revolution, most forecasts will quickly be outdated. ASEAN must be agile and allow for course correction.

4. Ask the people: Democratize and decentralize policy formulation. This will make the ASEAN policy-making process more inclusive, and make ASEAN an organization truly owned and managed by the people for their benefit.

5. Establish pan-ASEAN test beds for new approaches to regulation as a way to nurture multi-country experiments in shaping new technologies.

6. Hire staff capable of running a platform model effectively. The staff must be well versed in managing the new Fourth Industrial Revolution tools and have a strong record in this regard.

7. Adopt a new funding model to provide more funding for the ASEAN Secretariat’s operation.

“Today, the technologies of the Fourth Industrial Revolution appear to be contributing to rising inequality around the world. But this need not be the case,” said ADB Vice-President Stephen Groff. “With prudent fiscal management and appropriate policy, opportunities for lifelong learning and incentives for skills training can be created. And this is especially true for ASEAN. ADB considers the potential impact of Fourth Industrial Revolution technologies on jobs in ASEAN a critical area for exploration to support inclusive growth in years ahead.”

“The Fourth Industrial Revolution is unfolding at tremendous speed. Indeed, the pace of change is accelerating. All over the world, governments are struggling to keep up,” said Justin Wood, Head of Asia Pacific and Member of the Executive Committee at the World Economic Forum. “The traditional ways of shaping policy, writing regulations and setting standards are too slow, too top-down and too backward-looking. What is needed is an approach that is much faster, more agile, more experimental, and more iterative.”

“While there is a lot to celebrate on the 50th anniversary of ASEAN, we mustn’t rest on past achievements,” said Nazir Razak, Chairman, CIMB Group Holdings, Malaysia, and Chair of the ASEAN Regional Strategy Group (RSG). “This revolution will transform everything, from economic structures to social systems. Many aspects of our lives will improve. But there will also be many worrying challenges, such as how automation and artificial intelligence are replacing jobs. We have to understand these issues and have appropriate policies to address them.”

The report was commissioned by the World Economic Forum’s ASEAN–RSG made up of 26 ASEAN chief executive officers, government ministers and academics – and written by ADB and the World Economic Forum. The RSG presented the study to the 10 ASEAN heads of state during the 31st ASEAN Summit in Manila.

ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration. Established in 1966, ADB is celebrating 50 years of development partnership in the region. It is owned by 67 members—48 from the region. In 2016, ADB assistance totaled $31.7 billion, including $14 billion in cofinancing.