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
0
20
40
60
80
100
120
0 5 10 15 20 25 30 35 40
Ac
co
un
t at
a f
ina
nc
ial in
sti
tuti
on
(%
ag
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
