ASEAN Economic Integration Forum

2017: 50 Years and Beyond: Forging and

Inclusive ASEAN

Roundtable 4: Impact of Industrial

Revolution 4.0 on ASEAN’s Future

United Nations Conference Centre, Bangkok

14-15 September 2017

The views expressed here are his own and do not necessarily

reflect those of the PECC nor its members.

Eduardo Pedrosa

Secretary General

Pacific Economic Cooperation Council

Current Context: 4th

Industrial Revolution

Economic Context

Asia-Pacific Economic Growth

Trade as a driver of growth?

Shifts in Global Value Chains?

Is Onshoring Happening?

Source: UNCTAD World Investment Report (various years)

Drivers of growth over the next

5-10 years

Source: PECC State of the Region

Where are ASEAN economies

here?

A history of technological change:

per capita income levels

Speed of Change Accelerating

Which technologies will have the biggest

impact over the next 5 years?

Source: PECC State of the Region Survey 2017

Uncertainty on impact

Opportunities of the 4th

Industrial Revolution for

ASEAN

Cross Border E-Commerce

Source: Cross Border e‐Commerce, Empowering SMEs to Access Global Markets

APEC Informal Senior Officials Meeting, Ms. Diane Wang, ABAC China

Opportunity for MSMEs to

Compete in Global Market

Source: Cross Border e‐Commerce, Empowering SMEs to Access Global Markets

APEC Informal Senior Officials Meeting, Ms. Diane Wang, ABAC China

Opportunities for more

inclusive growth

AUS

KHM

CANHKG

IDN

JPN

MYS

MMR

NZL

PHL

SGP

THA

USA

VNM

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20

40

60

80

100

120

0 5 10 15 20 25 30 35 40

Ac

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t at

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ina

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ial in

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tuti

on

(%

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e 1

5+)

Commercial bank branches (per 100,000 adults)

It’s a Mobile World

Many solutions likely toCome from this!

Mobile Solutions

• Leading Online-to-Offline

(O2O) platform.

• Enables digital

entrepreneurs to become

the gateway for unbanked

• Agent network across 500+

cities in remote towns and

rural areas of Indonesia

enables customers to

transact online

• Mixes traditional channels

• Allows online whilst still

making payments through

cash.

ASEAN: Large Increasingly

Middle Class Region

Traffic: Lost Productivity

Source: https://blog.waze.com/2015/09/global-driver-satisfaction-index.html

Manila: productivity loss of at least P2.4 billion (U$$50) million a day, could more than double by 2030

Technological innovation:

Solving Urban Problems

• Just a taxi booking service?

– OpenTraffic smart data platform

provides

– free-of-cost GPS information for

better analysis of travel speeds

and journey times in Metro Manila

and Cebu City

– identifying road incident

blackspots and improving

emergency response.

The “Disruptor” - who’s getting

disrupted?

Challenges of the 4th

Industrial Revolution for

ASEAN

Data: The New Driving Force

Source: http://www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-insights/the-global-forces-

inspiring-a-new-narrative-of-progress

Who’s Ready for the Data

Economy?

Jobs at risk?

Source: PECC State of the Region Survey 2017

Sample of Projected Job

Changes in the US

Source: US BLS

But beware the reality…

Wage Growth in the 4th

Industrial Revolution

% Labor Force with Tertiary

Education

Question:How many more people do you need to provide tertiary education to in ASEAN to reach US standard?

Answer:For today’s population – 46 million

Problem is part of the solution

New business models: EdTech?

What determines export

performance?

Air Passengers per capita

High value low volume to low

value high volume

Source: Global Megatrends: Implications for the ASEAN Economic Community

Supply Side Constraints a Concern for

Developing Economies

Supply Side Constraint

This too….

38

4th Industrial Revolution:

Opportunities and Challenges for ASEAN

• MSME to engage in global economy

• More inclusive delivery of services • mobile banking• education• transportation

• Large middle class – opportunity to onshore in ASEAN

• Producer of solutions

• Disappearing jobs

• Speed of change & slow pace of reform

• Supply side constraints

• Lower returns to labor – higher inequality – social cohesion issues

ASEAN economies to accelerate pace of reform to capture benefits of IR4.0: especially services and labor markets