As ASEAN celebrates 50 years of its establishment this year, one of its key achievements has been the formation of the ASEAN Economic Community (AEC) – a platform that enables the economic integration of its 10 member states.
It is already making an impact on the economy of the region, which would be far greater in the years to come.
The potential for ASEAN is huge: with its 630 million people (with more than half of it under 30) and US$1.5 trillion consumer market, it is going to be the shining star of foreign investors.
Southeast Asia is the fourth largest exporting region in the world, accounting for 7 per cent of global exports. As a single economic entity, ASEAN would be the world’s seventh largest economy.
The region is said to have seen economic growth average a healthy 4-5 per cent per annum since its formation.
Member countries in ASEAN are fully cognizant of this huge potential, and their goals of accelerating the economic growth, social progress and cultural development in the region through joint endeavors and promoting regional peace and stability underline that.
The ASEAN goals are aligned with the United Nation’s Sustainable Development Goals — to end poverty, protect the planet, and ensure prosperity for all as part of a new sustainable development agenda.
From a development and governance point of view, it also includes goals such as sustainable cities and communities, and responsible production and consumption.
However, in a fast-changing and volatile world, where digital transformation is impacting businesses, governments and even individual lives, ASEAN faces some key challenges that will test the resilience of governments: business and tech life cycles are moving at a faster pace; the rise of the disruptive platforms and their impact on services; use of data analytics to engage citizens; the rise of technologies such as Artificial Intelligence (AI), Machine Learning (ML) and Robotics and how they have upped the ante for governments; and the constant threats of cyber-security.
The larger impact of these challenges faced by ASEAN nations today have implications for the economic conditions of their citizens, loss and automation of jobs, and the overall quality of life. These problems will only grow in complexity in the coming years.
Solving society’s problems through digitization
While digitisation has been a disrupter, it also has the potential to solve some of ASEAN’s key problems. It will touch upon businesses, people and governments to bring growth, jobs and service delivery.
For this to happen, governments in ASEAN should go for smart, connected, ubiquitous, and disruptive ‘intelligentisation’.
The World Bank recommends that digitisation must be ‘a whole of government agenda’ and cannot just be done in siloes.
Digitisation can accelerate growth for countries as it enables organisations to reach new markets, improves service delivery for citizens and strengthens institutions.
In the space of service delivery to citizens, digitisation increases the capacity to resolve complaints quickly and creates transparency in e-government systems.
Similarly, digitisation strengthens institutions through population registers, payment platforms, and information delivery mechanisms.
To increase the pace of digitization, ASEAN governments will have to invest in making the Internet more affordable, and sorting out the legal and regulatory issues to make digitisation ubiquitous.
The move towards smart nations and cities
The best way governments can deal with the challenge of digital transformation is to endeavour to convert the whole nation into a smart nation, composed of numerous smart cities.
All major countries in ASEAN – Malaysia included – are focusing on building their model smart cities.
In its neighbourhood, countries like India, Japan and Korea are pushing for smart cities in a big way. India has announced an ambitious project to build 100 smart cities.
Smart cities and smart nations are built on data, engagement and collaboration, and by meshing up these three principles/approaches, governments can serve the citizens in a 360-degree way.
While connectivity is still a big issue for ASEAN countries and skills gaps remain to be tackled, clearly, Big data, analytics and AI are going to be the biggest game-changers for ASEAN economies.
By bringing together both transactional processes and analytical intelligence – and combining all agency knowledge sources in one platform – organisations can turn data into actionable information.
That will allow decisions based on facts and provides predictive insights.
As issues arise, agencies can be more agile and responsive, incrementally adding connected solutions to address new problems – without disrupting operations.
- Claus Andresen is President and Managing Director for SAP Southeast Asia (SEA)