Growth in the Asean digital economy is expected to triple to US$240 billion over the next six years thanks to an expanding middle-class population, greater internet access and changing trade models, the Asean Business and Investment Summit 2019 (Abis) was told.
Asean needs to embrace digital technology and innovation ahead of the fourth industrial revolution (4IR), said Deputy Prime Minister and Commerce Minister Jurin Laksanawisit at the opening session of Abis under the theme "Empowering Asean 4.0".
Broad data access has lead to seamless and limitless communication with Artificial Intelligence (AI) and robots replacing human workers, he told the conference.
The fast pace of technological development is affecting trade, services, patterns of consumption and manufacturing models as well as boosting online business transactions, said the minister.
He said businesses that cannot keep up will lose out.
"In Asean, the digital economy is growing consistently," he said.
In 2018, the trade volume was at $72 billion, up from $50 billion in 2017, driven by the expanding middle-class population, greater internet access as well as the shift among Asean small and medium-sized enterprises to digital platforms, according to Mr Jurin.
However, the digital economy in Asean accounts for just 7% of the region's GDP. In the United States, that figure is 35%, he added.
Nevertheless, the future of Asean's digital economy looks bright according to studies by Google, Temasek Holding and Ben & Co which forecast the value of the sector tripling to more than US$240 billion by 2025.
Mr Jurin said Asean has endorsed an agreement to facilitate cross-border e-commerce expansion, integration of Asean data security and payment systems, development of personnel skills and businesses, and establishment of guidelines to prepare for the 4IR.
The Asean Business Advisory Council (Asean-BAC) will draft the guidelines to reskill and upskill the labour force for the 4IR, while collaborations between governments and the private sector will help strengthen the overall Asean economy, he said.
In a related area, Kalin Sarasin, chairman of Thailand's Joint Standing Committee of Commerce, Industry and Banking (JSCCIB), announced yesterday the successful completion of a trial of a National Digital Trade Platform (NDTP) incorporating NTT DATA's blockchain technology.
NTT DATA, which develops digital trade solutions in Japan, collaborated with the JSCCIB in studying the feasibility and benefits of a cross-industry trade platform.
Asean's digital trade transformation plans were formally endorsed at the Asean-BAC meeting in January in an effort to make processing more cost-efficient and reduce the time transactions take by digitalising the entire processes.
It is expected that these steps will enable small and medium enterprises to participate more fully in both Asean and international markets.
The project also aims to curb double financing and fraud.
Kobsak Pootrakool, deputy secretary-general to the prime minister on political affairs, said the NDTP project is a private-sector initiative led by the JSCCIB adopt a region-wide business-to-business platform for international trade.
Hironari Tomioka, President and CEO of NTT DATA Thailand, said the benefits of using electronic documents for international trade were examined by 47 trial participants from 24 cross-industry companies including Thai banks, forwarders, exporters, insurers and certificate of origin providers and Japanese importer.
Trade documents such as purchase orders, invoices, shipping instructions, sea waybills, certificates of origin, export permits, insurance policies and trade finance documents were used in mock business scenarios during the trial.
"Production costs will be reduced by around 60% through time saved in document processing and other efficiencies from going paperless," he said.
Information sharing via trade platforms using blockchain technology can also prevent the illegal practice of double financing or receiving redundant financing from multiple financial institutions, he added.
The company plans to introduce its trade platform in the Asean region in cooperation with local government agencies and service providers.
In 2017, NTT DATA developed the platform in Japan in collaboration with a cross-industry consortium including representatives from banks, insurance companies, cargo owners and carrier/logistics companies which shared a mutual interest in paperless international trade.