Advancing ASEAN’s digital economy in Asia
ASEAN member states should also establish clear regulations for cross-border transactions, especially for digital financial services, to encourage an integrated digital economy. According to one estimate, digital integration could generate a US$1 trillion increase in ASEAN GDP by 2025.
An AEC pillar on the digital economy would make ASEAN more responsive to trends in disruptive technologies, which could benefit other economic sectors. For example, the Internet of Things (IoT) is expected to provide significant opportunities for semiconductor companies, as this technology will increase demand for memory and sensors. It could also ramp up the annual revenue of the manufacturing industry by producing innovative products like IoT-integrated consumer devices.
Digital technology also helps businesses in the region access a bigger market for their products and services. E-commerce platforms such as Lazada and Shopee have become popular platforms for regional consumers who enjoy accessing a wide range of products at a single click.
Developing a harmonised approach to the digital economy would help ASEAN harness the opportunities of the Fourth Industrial Revolution (or Industry 4.0). ASEAN is expected to capture productivity gains from Industry 4.0 worth US$216–627 billion.
It is imperative for ASEAN to include the digital economy as a new AEC pillar to make the most of the opportunities available. This effort would help to enrich the region’s digital experience and improve economic activities that contribute to inclusive growth.
Phidel Vineles is a Senior Analyst at the S Rajaratnam School of International Studies (RSIS), Nanyang Technological University. The views and opinions expressed in this article are those of the author, and do not reflect the position of any company.