By Henry J. Schumacher / Special to the BusinessMirror
Conclusion
THE Association of Southeast Asian Nations, at 50 in 2017, can be proud that major strides have been taken toward its “Vision 2025.”
Big business has adapted particularly well to the regional environment with major companies from most of the Asean states having realized the advantages of the single market many years ago. For them, the Asean Vision 2025 means new opportunities and more business growth.
But in a region where the disparities among the member-countries stand out more that the commonalities, many sectors of society are struggling to come to terms with the dawning reality. Small and medium enterprises (SMEs), which make up the bulk of businesses and employers in countries across the region, are wondering what will happen when their locally made products face better or cheaper imported goods. Workers in many countries worry if they will still have jobs once better-qualified, multilingual people from the neighboring countries arrive in their country to work.
The reality is that the formation of the Asean Economic Community (AEC) on January 1, 2016, is not the goal in and of itself. The AEC integration is, rather, an ongoing work in progress requiring constant adaption and reinvention in the light of continuous and often unpredictable global change. The full implementation of key measures and the realization of benefits for stakeholders may carry through under the Vision 2025 Agenda.
As we move forward, it is also important to closely watch disruptive technologies that can affect reaching the Asean Vision 2025.
In a study, titled “Southeast Asia at the crossroads: Three path to prosperity,” McKinsey Global Institute highlights the relative low base in terms of digital infrastructure, adoption and innovation of Asean member-states, with the notable exception of Singapore. If the region, however, would put the necessary backbone infrastructure in place, it could harness the power of technology to drive productivity improvements. Asean’s low starting point implies that it has a larger opportunity for technology-driven growth than more developed regions.
Five closely related digital technologies are poised to create substantial economic growth and changes in society across sectors.
The mobile Internet can pave the way for productivity gains and more efficient delivery of vital services, provide the basis for geographical barriers and widen access to information, products and services to rural populations that have been excluded from technologies, including financial services, so far.
Big data, or the ability to analyze huge volumes of data extract insights and act on them in close real time, could be a source of advantage for the region. To better cater to consumers, companies will need to understand increasingly granular micro segments of their markets. For the Philippines, given its expertise in business-process outsourcing and knowledge-process outsourcing, can provide data analytics for third parties. This goes from providing financial institutions with sophisticated risk-management data to sharing medical records, patient data and health-care analysis.
The Internet of Things refers to networks of sensors and actuators embedded in machines and other physical objects that connect with one another and the Internet. Radio-frequency identification, for example, can track products as they move through warehouses and transportation hubs to store shelves, allowing companies to tighten their supply chain to avoid stock-outs, excess inventory and losses. Global Positioning System enabled telematics can manage fleets and distribution networks in real time.
The automation of knowledge work fosters advances in artificial intelligence, machine learning, and natural user interfaces; it can go a long way toward filling gaps or empowering workers with less training to achieve greater impact.
Cloud technology offers companies across the region access to secure storage and infrastructure services, basic software and enterprise systems at pay-as-you-go rates. Many small enterprises have limited access to IT services today, but cloud technology can give them new productivity tools without forcing them to tie up capital in IT systems. Given the fact that the Asean is made up of SMEs, this technology is extremely important. Advances in cloud computing will also reduce the costs associated with storing and analyzing big data.
These five disruptive technologies, together with several sector-specific innovations like 3D printing, infrastructure design, advanced genomics in agriculture and health care, have the potential to unleash substantial economic impact in the years to come. Within many sectors, there is large value at stake for companies that move quickly to digitize their operations and carve out competitive positions.
Disruptive technologies can accelerate the region’s growth and progress—and not only for its higher-income economies. To capture opportunity, however, policy- makers need to prioritize building the backbone infrastructure and low-cost Internet access. Additional challenges include establishing a policy framework for data sharing, data-privacy protection and cybersecurity, as well as supporting SMEs in technology adoption.
In conclusion, over the next years, the Asean will be one of the world’s fastest-growing consumer markets, with Asean members’ GDP forecast to rise more than fourfold to $10 trillion by 2030. The combined GDP of member-nations is already significantly larger than India’s economic output and, by 2018, it will exceed that of Japan, according to US industry analyst IHS Global Insight. Let’s all be part of and contribute to the Asean 2025 Vision!
Image credits: Nonie Reyes