ASEAN, a collaboration of 10 Southeast Asian nations, is one of the fastest growing regions in Asia. Digitalization, automation in manufacturing, and major integration efforts by the Greater Mekong sub-region and ASEAN Economic Community (AEC) are driving economic and social transformation.
Once AEC is fully implemented, economic growth will be boosted by removing trade barriers and enabling the free flow of goods, talent and capital among the ASEAN nations. This will unify the region and encourage the emergence of a global superpower. Stakeholders must develop business strategies that align with current developments in order to remain successful in a dynamic and evolving ecosystem.
The region's strategic location between the emerging markets of China and India places it in a favorable position for investors and manufacturers looking to pursue growth strategies through geographic expansion,” said Frost & Sullivan Industry Analyst Anees Noor.
As discussed in Future of ASEAN, a new analysis from Frost & Sullivan’s Visionary Innovation (Mega Trends) Growth Partnership Service program, the ASEAN initiative could be hindered by:
- Inequality of growth among the different ASEAN nations, causing competitiveness among ASEAN countries
- Lagging digitalization in certain ASEAN countries due to poor infrastructure
- Ineffective utilization of different drivers in each country for optimization
- Lack of consistency in implementation rates across the ASEAN nations
Such challenges could prevent ASEAN, a region that is expected to achieve a GDP of US$5.2 trillion in 2025, from achieving complete AEC integration.
However, infrastructure development to boost digitization, designing a supply chain to distribute processes across geographies in accordance with suitability, and a move toward transparency in ASEAN governments creates innovative growth opportunities for investors and businesses.
“The integration of ASEAN nations is expected to accelerate the wave of digitalization in the region, led by the increasing number of ASEAN netizens and automation in the manufacturing industry,” states Noor.
“The full implementation of the ASEAN Economic Community will create an integrated single market, boosting the already high rate of economic growth in the region.”