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ASEAN 4.0: What does it mean for regional economic integration?

The Fourth Industrial Revolution refers to a set of highly disruptive technologies, such as artificial intelligence (AI), robotics, blockchain and 3D printing

The region will need a new approach to policy and governance to help it navigate these technologies, which do not recognize national borders.

The Fourth Industrial Revolution refers to a set of highly disruptive technologies, such as artificial intelligence (AI), robotics, blockchain and 3D printing, that are transforming social, economic and political systems and placing pressure on leaders and policy-makers to respond.

The paper discusses the huge benefits these technologies will bring, such as empowering SMEs and creating new ways to connect citizens to healthcare. Equally, it will bring tremendous challenges, such as deep disruption to jobs as AI and advanced robotics undermine both manufacturing and services jobs.

The region will need a new approach to policy and governance to help it navigate these technologies, which do not recognize national borders.

This research report was suggested by the World Economic Forum’s ASEAN Regional Strategy Group. The report was written and researched jointly by the World Economic Forum and the Asian Development Bank (ADB).

The ASEAN peace dividend, combined with trade and other reforms within the bloc, has stimulated strong economic growth.

In the past decade, regional GDP has doubled from $1.3 trillion (2007) to $2.6 trillion (2016). The incidence of poverty has fallen dramatically and prosperity looks set to keep rising: the population with an income of more than $5,000 a year is estimated to grow from 300 million in 2015 to 400 million in 2020, making ASEAN one of the world’s most important emerging consumer markets.

ASEAN faces considerable challenges

The success of ASEAN has allowed the organization to evolve and expand its mandate beyond regional security. In 2015, ASEAN established the ASEAN Economic Community (AEC), which ushered in a bold agenda for enhanced economic integration.

But alongside its many successes, ASEAN faces considerable challenges, from rising inequality to rapid urbanization and climate change.

Arguably the most momentous challenges will come from the spread of the Fourth Industrial Revolution. A set of highly disruptive technologies, such as artificial intelligence (AI), robotics, blockchain and 3D printing, is transforming social, economic and political systems in often unpredictable ways, putting huge pressure on leaders and policy-makers to respond.

Earlier this year, Jack Ma, founder and chairman of Alibaba, a Chinese e-commerce giant, noted that the Fourth Industrial Revolution “will see much more pain than happiness in the next 30 years” .

The transformative impact of this revolution will demand that countries think deeply about their policies and priorities at a national scale. Many ASEAN governments are well aware of this need and have launched national responses, such as Thailand 4.0 and Singapore’s Smart Nation initiative.

Importantly, however, some of the greatest impacts of the Fourth Industrial Revolution will play out not at a national scale but at the regional scale. The nature of cross-border relations and economic interaction will be revolutionized.

It will not be enough to think only about a national response. In the years ahead, regional organizations like ASEAN will be called upon ever more heavily to help steer and shape these historic transformations.

And yet, given the accelerating speed and breadth of technological change, shaping regional policy is growing ever harder. It means that ASEAN and organizations like it will need to reimagine and redesign the way they manage regional governance.

ASEAN 4.0: What does the Fourth Industrial Revolution mean for regional economic integration? | Asian Development Bank

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