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 Eduardo Pedrosa Secretary General Pacific Economic Cooperation Council The views expressed here are his own and do not necessarily reflect those of the PECC nor its members.
Current Context: 4 th Industrial Revolution
Economic Context Asia-Pacific Economic Growth
Trade as a driver of growth?
Source: UNCTAD World Investment Report (various years) Shifts in Global Value Chains? Is Onshoring Happening?
Source: PECC State of the Region Drivers of growth over the next 5-10 years
Where are ASEAN economies here?
A history of technological change: per capita income levels
Speed of Change Accelerating
Source: PECC State of the Region Survey 2017 Which technologies will have the biggest impact over the next 5 years?
Uncertainty on impact
Opportunities of the 4 th 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 120 Account at a financial institution (% age 15+) 100 80 60 40 20 VNM MMR KHM SGP MYS THA PHL IDN CAN HKG NZL AUS JPN USA 0 0 5 10 15 20 25 30 35 40 Commercial bank branches (per 100,000 adults)
It s a Mobile World Many solutions likely to Come from this!
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. Mobile Solutions
ASEAN: Large Increasingly Middle Class Region
Traffic: Lost Productivity Manila: productivity loss of at least P2.4 billion (U$$50) million a day, could more than double by 2030 Source: https://blog.waze.com/2015/09/global-driver-satisfaction-index.html
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 4 th Industrial Revolution for ASEAN
Data: The New Driving Force Source: http://www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-insights/the-global-forcesinspiring-a-new-narrative-of-progress
Who s Ready for the Data Economy?
Source: PECC State of the Region Survey 2017 Jobs at risk?
Source: US BLS Sample of Projected Job Changes in the US
But beware the reality
Wage Growth in the 4 th 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.
4 th 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 38