Originally published in Advancing ASEAN in the Digital Age Book, 14 November 2017.
How ASEAN Can Realize Its Digital Dream
I looked at ASEAN at 50 [in 2017], at its current stage of its development and its likely future after five decades of existence. I look at it with the eyes of a businessman and a stakeholder. I like what I see.
ASEAN is by no means perfect. It is true that it makes progress incrementally. But the fact remains that for half a century it has been a decisive force for peace and prosperity not only in Southeast Asia but also in the greater Asia-Pacific region. Warts and all, ASEAN remains the best thing that has ever happened to Southeast Asia.
For ASEAN itself, the best is yet to be. In the years ahead, as the cyber-driven fourth industrial revolution unfurls, ASEAN has a tremendous chance to build on its strong fundamentals and to redeem itself from its limitations.
For ASEAN itself, the best is yet to be. In the years ahead, as the cyber-driven fourth industrial revolution unfurls, ASEAN has a tremendous chance to build on its strong fundamentals and to redeem itself from its limitations. It helps that ASEAN has integrated itself into an Economic Community that is committed to function as a single economic unit where goods, services, skilled labor and capital investment flow freely. As such, it is the sixth largest economy in the world today, with a GDP of US$2.55 trillion and an average GDP growth of five to six percent annually.
It has a vast population—one of every nine human beings today is a citizen of ASEAN. Over 50 percent of that population is under 30, almost all of whom are literate. Most are “digitally engaged,” with a rapidly growing spending power.
Several ASEAN countries have been implementing longstanding programs to build digital infrastructures and employ cutting edge cyber technology in a bid to become globally competitive. Two remarkable examples are Singapore and Indonesia.
With more than 80 percent of its population already benefiting from access to the Internet, Singapore is now focused on innovation and harnessing new technologies such as artificial intelligence and data science, cyber security, virtual and augmented reality technologies, and the Internet of things (IoT). Indonesia, on the other hand, is gearing its Palapa Ring fiber-optic network to provide the whole country with Internet access by 2019. In 2017, the government spent US$1.5 billion to deliver connectivity to areas not yet served by broadband. The government has a standing Indonesia Broadband Plan (IBP) that mandates it to stimulate and shape markets.
In Malaysia the economy enjoys a precocious 67 percent broadband penetration. Six of ASEAN’s eight largest publicly traded Internet companies are based in Malaysia, the other two being in Singapore.
The Philippines and are also rated as potential leaders in the digital economy, considering their current pace of enhancing their cyber capabilities. The Philippines is the world leader in business process outsourcing. In recent months Viet Nam experienced a surge in the number of fiber-based broadband subscribers.
[In 2016], Thailand established a Ministry of Digital Economy and Society to guide the transformation of the country’s transformation into a more cyber oriented one. In Cambodia, as e-commerce expands into a multi-billion dollar industry, the government is crafting the necessary regulatory framework to ensure the security of this important sector.
In Myanmar, the government is intensively promoting the use of digital technology in all sectors to bring about the emergence of a digital economy. In Laos, the government is partnering with Microsoft to advance the country’s cyber technology for sustained economic development. And in Brunei Darussalam, the government has adopted a set of long-term goals called Wawasan 2035, which will all be achieved through information technology.
The world’s fastest
A study by Temasek and Google [in 2016] predicted that just six ASEAN countries would become the world’s fastest growing Internet region. The six: Indonesia, Malaysia, Philippines, Singapore, Thailand and Viet Nam, will have over 480 million Internet users in 2020 and an Internet economy of US$200 billion by 2025. However the fact that the four other ASEAN members were not mentioned in the study could mean that the Association is not yet moving forward on a sufficiently broad front in its Digital Revolution.
Nevertheless ASEAN has an ICT Master Plan designed to reduce gaps and enhance interoperability among members. What is needed now is for ASEAN to agree on regional goals in terms of broadband coverage, speed, reliability and security. The challenge is for all Member States to deal in concert with the technical and administrative complexity of running a region-wide digital ecosystem where no one is left behind.
And beyond the building of the infrastructure for speedy Internets, they must think in terms of people. Whether they are students, blue-collar workers, white-collar workers, homemakers, or senior citizens—people must gain high computer literacy to leverage the Internet. Content is also important: messages and applications that are socially and economically useful, and those that promote good governance, have to be crafted and disseminated. So there must be people who have or will acquire the skills to craft meaningful broadband content.
This calls for a massive effort at education and training. All over the ASEAN region, educational institutions, the relevant civil society organizations and government extension workers are called upon to organize and work together to see to it that the great mass of the population of the region receives the knowledge and the skills to become native to the digital economy.
That is a tall order—putting up broadband infrastructure and building a regional ecosystem while edifying all the people on how to make the Internet meaningful. It demands a huge investment of money and effort. But it will be worth it.
If the ASEAN Internet Master Plan is enhanced and becomes the blueprint of a Digital Revolution, it is projected that the region will be among the world’s top five digital economies by 2025. This means that through digital integration, ASEAN countries will have leap-frogged over the normal stages of development. They will have become pioneers in the generation of new digital services, including e-commerce and mobile financial services, and in the application of the Internet of things (IoT) so that the production of goods in the region is customized according to the precise needs and desires of consumers.
ASEAN economies will be firmly linked with supply chains. Job opportunities will abound. Access to public services will be so efficient that it can create a new wave of political enlightenment. Urban sprawls will tend to morph into smart cities, where information technology is the main infrastructure and all economic activities are sustainable.
The Internet will empower very senior citizens to become more independent and take better care of their health. The young will grow in creativity as they gain free and wide access to the wisdom stored in the great universities of the world. Inclusive growth will bring about near universal participation in new ways of producing wealth and new ways of using that wealth. In absolute terms, according to the World Economic Forum, the Digital Revolution will add US$1 trillion to ASEAN’s GDP in ten years.
That may sound like a dream. But it is actually the way to go. It is the future economy. The ASEAN countries need only to fine-tune the ASEAN Internet Master Plan, meet its investment requirements, implement it robustly and empower their peoples through cyber literacy—and they will reap the immense rewards of the Digital Revolution.
About Dr. James Riady
Dr. James Riady is the Chief Executive Officer of Lippo Group, a Pan-Asian group based in Jakarta. The group has interests in property, department stores, food retailing, malls, IT services, hotels and other businesses. He is also the Founder and Chairman of Pelita Harapan Educational Foundation, or the Educational Foundation of Hope and Light, a group of co-educational K1-Year 12 private, international Christian schools in Indonesia.