Originally published in Advancing ASEAN in the Digital Age Book, 14 November 2017.
Towards a Digitally-Enabled, Innovative, Inclusive and Integrated ASEAN Community
The ASEAN Community has come to face with the reality of the digital age. Business models and ways of lives the world over are being altered by the transformative and expansive power of digital technologies. The widening reach of digital technologies has overcome the constraints of physical distance, opening markets for businesses as well as expanding the choices of product and services for consumers.
To stay ahead of the game, ASEAN must embrace the digital age and the era of technologies. To an extent, such recognition has been reflected in the AEC Blueprint 2025. As ASEAN strives to transcend from a production-driven economy to a productivity-driven economy, dedicated forward-looking elements on electronic commerce and technology commercialisation can be found side by side in the Blueprint with the softer infrastructures for development, from good regulatory practice to sustainable economic development and global megatrends.
The impact of digitisation will go beyond economics, affecting different aspects of our lives from government to governance, from how education and healthcare are delivered to how workers learn and get affected by new production processes. ASEAN’s resilience depends on its agility in dealing with such changes. Critical to this is the awareness of leaders, including policymakers and thought leaders, of how the digital age is changing the way we live, shaping our future.
Electronic commerce (e-Commerce) is often the first thing that springs to mind when we discuss the digital age. Conversations often quickly go into how to ensure market actors, big and small, benefit from this new commercial platform, at the same time ensuring that the interests of buyers, sellers and regulators are safeguarded. Digitisation itself goes beyond e-Commerce, as it enables new approaches to deliver non-commercial services and organise production activities that would ultimately determine a country’s competitiveness in the global economy.
In practice, similar to previous industrial revolutions, the digital age brings about both positive economic transformation as well as polarising effects. Slower technological catch-up by the less developed economies will result in the digital divide among economies, further exacerbating the income and development gap. This is where the even-hand of informed and responsive policymaking finds its relevance. The digital transformation will leave few policy areas untouched and a holistic approach is needed to anticipate the effects of one policy area (or its lack of) on another, whether or not intended.
ASEAN, with a combined GDP of US$2.55 trillion and a total population of 630 million in 2016, is a fertile ground for a digital coming of age, albeit unevenly across membership. Nestled in the Asia-Pacific region – the world’s largest retail e-commerce market— ASEAN is well-positioned to cultivate the opportunities presented by the digital economy. It is forecasted that by 2030 digital technologies could potentially boost the region’s economy by US$220 billion to US$625 billion annually. The question is how to realise this potential as we work towards a digitally-ready ASEAN.
The recent establishment of the ASEAN Coordinating Committee on Electronic Commerce will help promote, coordinate and enhance efforts by various ASEAN sectoral bodies to promote the growth e-Commerce in ASEAN. It will also give impetus to the implementation of the ASEAN Work Programme on Electronic Commerce 2017-2025, which was adopted by the ASEAN Economic Ministers in September 2017. The Work Programme recognises the need for a holistic approach to e-Commerce in the region and covers multi-sectoral initiatives in the areas of infrastructure, education and technology competency, consumer protection, modernisation of the legal framework, security of electronic transactions, payment systems, trade facilitation, competition, logistics, and e-commerce framework.
Beyond the specific ASEAN work on e-Commerce, other relevant work is also being undertaken in parallel. For example, digital innovation is included as one of the strategies under Master Plan on Connectivity 2025, which covers key initiatives from enhancing the micro, small, and medium enterprises (MSMEs) technology platform to establishing an ASEAN open data network. Similarly, in the area of competition, work has been undertaken to build awareness and foster greater understanding of the competition and regulatory challenges arising from e-Commerce.
To address the key challenge of digital divide in the region, a series of strategic measures has been incorporated in the ASEAN ICT Masterplan 2020, including enhancing internet broadband penetration and affordability in ASEAN, raising awareness and the uptake of digital trade and use of electronic facilities such as e-payment among businesses including MSMEs, as well as educational and training strategies on ‘smart use’ of technology for consumers. ASEAN recognises that beyond delivering efficiency gains, the digital economy should be harnessed to promote inclusive growth towards a people-centered and people-oriented ASEAN. To this end, the region would benefit from appropriate policy support.
Achieving digital-ready policies requires closing the gap between “Industry 4.0” or the 4th industrial revolution, which combines the physical, digital, and biological worlds through technologies, and traditional policy making. The ‘right’ policy mix should aim at creating an enabling environment for innovators, start-ups, researchers, and businesses to incubate, develop, and commercialise their products and services in the digital age as well as manage a new dimension of digital risks. The scale of transformation can be tremendous given the differing and interrelated policy areas affected by digital transformation, from intellectual property rights, cross-border data transfer, consumer protection, customs regulations, to taxation.
The right policy mix would lead to an open, secure, and enabling digital environment, which would meet the fast changing need of the community and keep in step with international developments.
The right policy mix would lead to an open, secure, and enabling digital environment, which would meet the fast changing need of the community and keep in step with international developments. In the process, collaboration and coordination between relevant agencies and stakeholders are key. Given the fast changing nature of the digital environment, policymakers need to engage with those at the fore of the phenomenon including the private sector, industry experts and consumer or user communities. Regional platform should also be utilised for greater exchange of ideas, best practices and experiences, and be leveraged on to further deepen cooperation including through appropriate regulatory cooperation.
The digital transformation is here to stay. While the region will not transform itself over night, gradual steps to embrace the digital era need to be put in motion. A digital-ready ASEAN would therefore need to stay agile and be forward looking with its policies and processes to maintain an even footing as it rides the currents of the digital age well into its future as a deeply integrated economic region. Ultimately it is in ASEAN’s interest to embrace digital economy for the well-being of its people as well as the resilience and continued relevance of the region.
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About H.E. Dr. Lim Hong Hin