Tech disrupters key to regional trade

Tech disrupters key to regional trade

Asean countries must take collective rather than individual approach to digital development, summit told

Asean nations must work to establish global value chains through new technologies, while taking a regional rather than national approach to digital development, said an international economics expert on Saturday at the Asean Business and Investment Summit 2019.

"Every country in Asean has its own digital initiative similar to Thailand 4.0," said James Wood, head of Asia-Pacific regional agendas at the World Economic Forum. "But we need countries to look at this issue from a regional perspective, not a national one, to build things like a cross-border network of e-payments."

At a panel on advancing global value chains (GVCs) in Asean, Mr Woods urged nations to prepare for emerging disruptive technologies like blockchain and 3D printing and work towards incorporating them into value chains.

GVCs encompass everything that goes into making a product, not simply raw materials, but the services involved such as research and development.

"There's a perfect storm of tech disrupters to global value chains," he said.

For instance 3D printers, he says, could shorten GVCs, allowing manufacturers to move from mass production to specialised, custom products and thus move closer to their customers in end markets.

Conversely, the growth of a more service-oriented economy will lengthen GVCs as services, especially digital, can easily extend through Asean and out globally.

Gabriela Ramos, chief of staff at the Office of Economic Development (OECD), says while growth rates in Asia are moderate, the office expects growth to remain "buoyant in the medium term".

The OECD predicts an average 4.9% growth rate across Asia from 2020-2024.

However, emerging technologies have the potential to disrupt labour markets where the OECD expects half of jobs could be disrupted by automation.

"We need to make sure that these technological advancements do not only benefit the lucky few," Ms Ramos said.

Hidetoshi Nishimura, president of the Economic Research Institute of Asean and East Asia (ERIA), said due to its dynamic growth and growing interest from investors, Asean has many opportunities to benefit from disruptive technology.

"Traditional sectors and manufacturing can be modernised by the appropriate application of IT," he said. "We are going to see a further servification of the manufacturing industry."

Key to Asean's digital development will be the nation of Japan, said Nobuhiko Sasaki, chairman and CEO of the Japan External Trade Organisation (JETRO).

Japan spends the highest amount in foreign direct investment (FDI) in manufacturing in Asean, ahead of the United States and European Union. Mr Sasaki said Japanese firms can lead the way improving efficiency in manufacturing processes of factories across Asean.

"GVCs in Asean are moving in to a new stage of development," he said as trade deals like the proposed RCEP free trade agreement among Asean companies and the CPTPP are transforming the region and easing flows of trade across Asia.

Prime Minister Prayut Chan-o-cha yesterday stressed the importance of collaboration and partnership between the public and private sectors in helping the government push the Thailand 4.0 initiative.

In his keynote speech delivered at the Asean Business and Investment Summit 2019, Gen Prayut discussed how the government has engaged the private sector in pushing forward its policies as the country moves towards an innovation-based economy.

On the security front, which involves cross-cutting issues, Gen Prayut said the government has sought views and suggestions from the private sector on how to deliver human, energy and food security.

He said both the government and the private sector have obligations to respond to public demand and steer the country towards prosperity and security in a sustainable manner.

On economic matters, Gen Prayut said the government has adopted public-private partnerships in its economic and investment projects, citing four megaprojects under the Eastern Economic Corridor (EEC) flagship scheme as an example.

The four projects are the U-Tapao airport and eastern aviation city development; the high-speed railway linking the three airports of Don Mueang, Suvarnabhumi and U-Tapao; the third phase of Laem Chabang port development; and the Map Ta Phut industrial seaport development.

On the social front, he said Thailand is becoming an ageing society which has prompted the government to adopt innovations to respond to the changes of a shrinking workforce and growing elderly dependency burden.

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