What CIOs can expect from the ASEAN digital revolution

Is ASEAN going through a digital revolution?

Cristina Lago Sep 12th 2018 A-A+

Revolution is a highly charged word frequently overused.

From the Latin ‘revolutio’, it literally means “a turn around”, a drastic change. A couple of famous examples are the industrial revolution or the Chinese revolution of 1911 - major events which shook the existing social order of the time.

Today the term is being applied to much less relevant affairs: from “revolutionary weight-loss pills” to failed gadgets that were sold to us as life-changing inventions.

Anything technological or digital is commonly associated to the R-word, probably as a result of the psychological identification with sci-fi novels and films of the like of Blade Runner, where technology is an essential feature in the new order.

But needless to say, digital does not necessarily involve a revolution (at least not every single year) and instead of paying attention to vendors’ marketing strategies, we should examine if the results of a digital event are truly revolutionary, i.e. are able to shake the foundations of a given society.

When it comes to the Association of Southeast Asian Nations (ASEAN), much buzz has been given to its digital development, some even branding it as digital revolution. But can we really talk about a revolution?

Digital revolution in ASEAN

ASEAN is made up of 10 very different countries, not just culturally and politically but also in terms of economy and development.

Like other regional organisations, such as the Southern African Development Community (SADC) or MERCOSUR, there exists significant discrepancies between the member states.

Because Singapore is often under the spotlight for its impressive technological progress, we cannot nonetheless extend that same level of development to other countries in the association which, for many socio-economic factors, are still left behind. This is an important aspect that should not be disregarded if we choose to talk about an ASEAN “digital revolution”.

However, these sober considerations should not bring discouragement. ASEAN as a bloc has a real opportunity to leapfrog to the forefront of the fast-moving global digital economy as many of the essential requisites are already in place.

ASEAN has a robust economy, generating an overall GDP of $2.5tn and growing at 6% per year. It also has a literate population of more than 600m people, with 40% under 30 years of age.

In the digital realm, it has a rapidly growing smartphone penetration, currently at around 35%, and a well-developed information and communications technology (ICT) cluster with a track record of innovation and investment in new technology.

AT Kearney also highlights a renewed sense of optimism and urgency for economic integration with the implementation of the ASEAN Economic Community in 2015, which pledges to promote free movement of goods, services, investment, skilled labour and free flow of capital.

What is the Master Plan on Connectivity 2025?

An important step for ASEAN to take towards its “digital revolution” is the implementation of the Master Plan on Connectivity (MPAC) 2025, which aims “to achieve a seamlessly and comprehensively connected and integrated ASEAN that will promote competitiveness, inclusiveness, and a greater sense of Community”.

The MPAC 2025, which succeeded the MPAC 2010, has included 52 remaining uncompleted initiatives in its preceding plan that have a clear owner (that is, those in the ASEAN sectoral work plans of the relevant ASEAN Sectoral Bodies), and that do not overlap with newly proposed initiatives or other cross-sectoral plans.

Drawing on the lessons learnt from the MPAC 2010, the formulation of MPAC 2025 has taken into consideration the implementation challenges encountered by the former. In addition, it plans to develop the ASEAN digital financial inclusion framework and establish an ASEAN digital data governance framework.

MPAC 2025 has a stronger commitment to a digital agenda and includes digital innovation as one of the five goals it seeks to achieve.

If accomplished, digital technologies in ASEAN could potentially be worth up to US$625 billion by 2030, which may be derived from increased efficiency, new products and services.

The plan observes that capturing digital innovation requires the establishment of regulatory frameworks for the delivery of new digital services; support for the sharing of best practices on open data; and equipping micro, small and medium enterprises (MSMEs) with the capabilities to access these new technologies.

During the 9th ASEAN Connectivity Symposium celebrated on 6 September in Singapore, participants exchanged views on current challenges and recommendations to mobilise resources for infrastructure development and cooperation in ASEAN, promote sustainable urbanisation in the region’s cities, and facilitate MSME participation in the digital economy.

Since the attainment of the MPAC 2025 can only be possible if all ASEAN countries progress at unison, the symposium gave special emphasis to the importance of holding more dialogue and fostering greater cooperation between stakeholders in order to deliver concrete actions that benefit the whole region.

Professor Hidetoshi Nishimura, president of the Economic Research Institute for ASEAN and East Asia (ERIA), highlighted in the meeting the need for digital connectivity and the increasing importance of digital connectivity infrastructure.

Digital technologies, along with big data and artificial intelligence (AI), he asserted, also play key roles in digital innovation.

Digital challenges in Southeast Asia 

One of the main dangers of talking of a “digital revolution” in ASEAN is assuming that this is an already accomplished process, thus ignoring the obstacles that might slow it down or even make it a failure by not taking them into account.

As noted above, the countries that form ASEAN are very different from each other and they develop and progress at a different pace.

In the digital economy front there’s a sharp contrast between the member states: whereas Malaysia and Singapore matches the performance of developed countries, Vietnam, Myanmar and Cambodia underperform their Southeast Asian peers in all of the digital economy categories except regulatory environment.

Singapore is the only country in the top 10 of the United Nations ICT Index and the top 20 of the Economist Intelligence Unit Digital Economy Ranking. It is also the only ASEAN nation that has been considered a “Stand Out Country” in the Digital Evolution Index.

Other obstacles in the digital implementation journey pointed out in an AT Kearney study are a weak business case for building out broadband, no single digital market or a limited supply of local content, primarily due to a weak local digital ecosystem.

The report also mentions the minimal policy harmonisation across different countries: Compared against the European Union, where there are large-scale pilots for EU-wide digital public services and progress is regularly tracked and measures, in ASEAN there are no regional actions, monitoring or ranking mechanism to ascertain progress in the digital public service area.

There’s also lack of coordination on the region-wide digital vision, consumer protection (privacy and cybersecurity), development of ecommerce and industry structure fields.

In a recent article published in CIO Asia, Charlotte Trueman identified a critical talent deficit that the region is set to face over the next decade.

The good news is that challenges which cannot be tackled effectively by individual members, can be overcome as part of a union and with the cooperation from neighbouring colleagues.  

What ASEAN needs is a digital reform promoted and led by its governments in coordinated agreement. Revolutions are spontaneous and nothing would be more detrimental than any kind of ad-libbed development.

On the contrary, as official representatives said in last week’s symposium, it needs careful planning and strong collaboration between the state members. Only that way will ensure that every single citizen in the 10 Southeast Asian bloc can benefit from a so-called "digital revolution" and improve their lives.