Countries that make up the Association of Southeast Asian Nations will be a wellspring of opportunity for the United States because of growth in the region’s digital economy and its young population, researchers say.
Those combined forces will “create a much more dynamic [economy] … over the coming decades,” said Satu Limaye, head of the Washington office of the East-West Center, which has conducted research on major trends in Southeast Asia. “You have a young population, very adept at technology, adaptive to innovation, so … they are going to be moving up the supply chain in terms of their comfort with technology-based innovation.”
ASEAN is the world’s fastest-growing internet market, with nearly 4 million Southeast Asians coming online every month, according to data from ASEAN Matters for America/America Matters for ASEAN, which was released in May.
The report projected that by 2020, up to 480 million Southeast Asians would be online, compared with 260 million in 2016, driven largely by the adoption of smartphones. This young and tech-savvy population, with a growing middle-class base, is projected to help the digital economy grow by 500 percent to around $200 billion by 2025.
The report marking ASEAN’s 50th anniversary was published in collaboration with the U.S.-ASEAN Business Council (USABC) and the Singapore-based ISEAS-Yusof Ishak Institute, formerly known as the Institute of Southeast Asian Studies.
Alexander Feldman, chairman and chief executive of USABC, said ASEAN’s digital dynamism means Southeast Asia-based companies will become global players, and the United States should play a key role in ensuring that this digital growth will help narrow economic inequality.
“Technology is a great leveler and it is something that ASEAN has been focusing on,” Feldman told VOA Khmer. “How do we ensure the prosperity is shared throughout the economy and that you have equal growth in ASEAN? I think the digital economy is a key, and American companies are the key to the digital economy.”
Feldman, who attended the World Economic Forum on ASEAN, a three-day event in Phnom Penh that focused on youth and digital technology, said the host country, Cambodia, sees big potential in its nascent technology sector in addition to its traditional agriculture sector, where growth appears more promising because of technology.
In both sectors, Feldman sees room for U.S. companies working in logistics, a key component of e-commerce, which is just getting started in Cambodia and its neighbors.
ASEAN ambassadors who attended the launch of the report in Washington in May agreed that the digital economy presents new opportunities for boosting their economies, while strengthening their relationships with the U.S. They agreed that U.S. digital engagement in helping less-developed ASEAN countries like Cambodia will help kick-start their digital economies.
Accent on technology
Chum Bunrong, Cambodia’s ambassador to the U.S., said his government has now made technology a priority for development. He said the U.S. has been particularly helpful in investment and tech-related education through exchange programs.
Singapore’s ambassador to the U.S., Ashok Kumar Mirpuri, said many young Southeast Asians look to the U.S. as they hope to launch their startups in California’s Silicon Valley. Singapore is home to the regional offices of Facebook and Google and has taken advantage of the U.S. tech sector. For example, two years ago, Singapore expanded its famed “Block71” tech ecosystem to Silicon Valley.
Increased connectivity among ASEAN economies and emerging country-based technologies like fintech (financial technology) will only increase the region’s two-way digital trade with the U.S., according to Mirpuri.
The biggest challenges ASEAN nations now face are protecting data and digital transactions to increase consumer confidence in cybersecurity, said Feldman, who is working with U.S. companies to help build a common data security framework for ASEAN’s diverse economies.
“We hope that there will be harmonization of regulations, especially around data in the ASEAN Economic Community,” he said, “and we hope that that harmonization will allow for free flow of data.”
U.S. exit from pact
Feldman added that the recent withdrawal of the U.S. from the Trans-Pacific Partnership (TPP) would affect “digital trade” with ASEAN.
“We fully understand that in America, some will benefit more than others and some that will not benefit at all” from the TPP, he said. “I think it’s silly for America to solely focus on industries of the past. We definitely need to focus on the industries we are strong on currently and in the future. And technology and the digital economy are certainly areas where America is strong.”
This report originated on VOA Khmer.