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ADB and World Economic Forum call for improved collaboration among ASEAN nations to deal with challenges of the Fourth Industrial Revolution

ADB and World Economic Forum call for improved collaboration among ASEAN nations to deal with challenges of the Fourth Industrial Revolution

The Asian Development Bank (ADB) and the World Economic
Forum have released
a report calling for the member
states of the Association of Southeast Asian Nations
(ASEAN) to improve
their collaboration in order to successfully deal with the challenges of the
Fourth Industrial Revolution.

The report, ‘ASEAN
4.0: What Does the Fourth Industrial Revolution Mean for Regional Economic
’, was commissioned by the World Economic Forum’s ASEAN–RSG
made up of 26 ASEAN chief executive officers, government ministers and
academics – and written by ADB and the World Economic Forum. The RSG presented
the study to the 10 ASEAN heads of state during the 31st ASEAN Summit in

The report analyses how emerging technologies will reshape
Southeast Asia, and identifies actions for ASEAN leaders to prepare for the
deep transformations that lie ahead. The report acknowledges the many existing
national strategies for the Fourth Industrial Revolution, such as Thailand
or Singapore’s Smart
Nation initiative
. But it argues that ASEAN must think at the regional
level, not the national level.

Key opportunities of the Fourth Industrial Revolution are
noted. Disruptive technologies could enable much more inclusive forms of
economic growth and empower SMEs, connecting them to giant regional markets
rather than just local customers. They could provide opportunities for
leapfrogging, connect the unconnected in archipelagic nations such as
Philippines and Indonesia, improve environmental management, facilitate customised
healthcare and upgrade disaster preparedness.

However, there are challenges also, such as job loss,
reduced competitiveness of low-cost and low-skilled labour, concentration of
market power by global giants and increased vulnerability to cyberattacks.

The treatment of cross-border data flows, is one of the
pressing issues highlighted by the report. If data is prevented from flowing
seamlessly across borders, as happens currently, new technologies such as
telemedicine or the Internet-of-Things (IoT) will be limited in their

The report offers seven recommendations for ASEAN leaders to
rethink their approach to regional interaction under the ASEAN Secretariat to
deal with the coming challenges:

  1. The ASEAN
    has to become a “platform
    that allows for the integration of input from
    multistakeholder groups of experts. The Secretariat would design and run the
    “operating system for regional integration”. Third parties – multistakeholder
    groups of experts – would do the work of designing and formulating new
    standards, policies and regulations for integration. The role of the
    Secretariat would be to ensure that all the various integration projects
    running on its “operating system” were well governed and were conducted in the
    right manner.
  2. The secretariat should delegate more activities to affiliated functional third-party
    groups. This would allow ASEAN to maintain oversight while also benefiting from
    a larger ecosystem of institutions, which will be critical in managing the
    sheer scale of engagement and implementation that will be required.
  3. Long-term blueprints
    should be replaced with 3-year rolling plans
    . In view of the speed of the
    Fourth Industrial Revolution, most forecasts will quickly be outdated. ASEAN
    must be agile and allow for course correction.
  4. Ask the people:
    Democratise and decentralise policy formulation. As internet and smartphone
    penetration deepens across ASEAN, there is substantial opportunity to make
    ASEAN policy formulation more inclusive This will make the ASEAN policy-making
    process more inclusive, and make ASEAN an organisation truly owned and managed
    by the people for their benefit.
  5. The report recommends the establishment of pan-ASEAN test beds for new approaches
    to regulation as a way to nurture multi-country experiments in shaping new
  6. Hire staff capable of running a platform model
    . The staff must be well versed in managing the new Fourth
    Industrial Revolution tools and have a strong record in this regard. The report
    says that ASEAN leaders could consider a new approach to the recruitment of
    staff, with workers hired for their skills on a permanent basis, rather than
    through “appointment”, based on rotation among ASEAN nations.
  7. Adopt a new funding model to provide more funding for the
    ASEAN Secretariat’s operation. ADB estimates that, by 2030, the ASEAN
    Secretariat will need an annual budget of $220 million (current annual funding
    is around $20 million) to manage the ASEAN Community effectively. One possible
    model might be that used by the United Nations, with contributions linked to
    the economic size of countries.

“Today, the technologies of the Fourth Industrial Revolution
appear to be contributing to rising inequality around the world. But this need
not be the case,” said ADB Vice-President Stephen Groff. “With prudent fiscal
management and appropriate policy, opportunities for lifelong learning and
incentives for skills training can be created. And this is especially true for
ASEAN. ADB considers the potential impact of Fourth Industrial Revolution
technologies on jobs in ASEAN a critical area for exploration to support
inclusive growth in years ahead.”

“The Fourth Industrial Revolution is unfolding at tremendous
speed. Indeed, the pace of change is accelerating. All over the world,
governments are struggling to keep up. The traditional ways of shaping policy,
writing regulations and setting standards are too slow, too top-down and too
backward-looking. What is needed is an approach that is much faster, more
agile, more experimental, and more iterative,” said Justin Wood, Head of Asia
Pacific and Member of the Executive Committee at the World Economic Forum.

Nazir Razak, Chairman, CIMB Group Holdings, Malaysia, and
Chair of the ASEAN Regional Strategy Group (RSG) said,“This revolution will
transform everything, from economic structures to social systems. Many aspects
of our lives will improve. But there will also be many worrying challenges,
such as how automation and artificial intelligence are replacing jobs. We have
to understand these issues and have appropriate policies to address them.”

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