The importance of the ASEAN region as an opportunity for Australia
The recent ASEAN-Australia Special Summit renewed the focus on ASEAN, which is undergoing a period of rapid social and economic transition. ASEAN had the world’s third largest population in 2016, and it is set to become the equivalent of the world’s fourth largest economy by 2030 with economic growth rates that outpace the global average.
Forecasting by CSIRO‘s Data61 estimates that between 2018 and 2028 ASEAN’s population will grow from 650 million to 710 million, its collective GDP will grow from $3.7 trillion to $7.3 trillion, and its average GDP per-capita will grow from $15,437 to $25,948.
The rapid change currently underway in the ASEAN region, combined with accelerating technological development, is giving rise to new industries and new sources of wealth generation. Data61‘s new Sunrise Industries report, launched at the ASEAN Summit last week, identifies seven emerging industries that are set to create growth in the ASEAN region in years to come.
The seven industries include: Artificial intelligence and autonomous systems, financial and regulatory services technology, high value nutrition, next generation energy storage and distribution, cyber-physical systems security, personal health and ageing, and digital infrastructure and connectivity.
Digital technology is a major driver of many of these industries – including, artificial intelligence and autonomous systems. This industry, made up of companies which design, construct, implement and operate automated systems, is emerging as a result of the increasing capabilities of automation and artificial intelligence to deliver benefits at lower costs.
Another technology-enabled industry is FinTech. ASEAN already has a major FinTech player in Singapore, and we see room for further development of the FinTech and RegTech sector, enabled by growing demand for innovative financial services.
In the energy sector, improvements in the affordability and capability of battery technology, as well as consumer demand for clean energy solutions, are expected to fuel the development of next-generation energy storage and distribution companies.
And as cyber-physical systems (systems with intertwined software and physical components) and IoT devices become increasingly common, including in critical infrastructure, there is a growing opportunity for an industry focused on cybersecurity in this area.
While the wider Asia-Pacific region has some of the world’s most digitally advanced nations, digital infrastructure is still lacking for many ASEAN members, creating opportunities for Australia’s digital infrastructure industry to respond to the growing connectivity demand.
Sunrise industries are also driven by social and demographic shifts. For instance, chronic disease is a growing problem within ASEAN nations. Combined with concerns about food safety and provenance, this is driving demand for healthy, traceable and trustworthy food products, giving rise to an industry focused on high value nutrition.
The emergence of these sunrise industries in the ASEAN region also presents opportunities for Australia. For example, the emerging ‘high value nutrition’ industry in ASEAN is one that Australia is well-placed to play a dominant role in.
Australian agricultural products are world-renowned for their high quality, and are increasingly in demand by consumers. By collaborating with ASEAN countries with strong food manufacturing sectors — for instance, Singapore or Vietnam — we can build a supply chain underpinned by technology to meet consumer demand for high value nutrition products and deliver benefits for both countries.
The growing demand for lithium-ion batteries in the ASEAN region and surrounds also represents an opportunity to build an integrated supply chain: Australia was the world’s top producer of lithium in 2017 and is expected to account for almost 60 percent of new lithium supply to 2022. Australia is also well-placed to provide cobalt and nickel, two other elements essential to the production of lithium-ion batteries.
As well as building supply chains for primary products, Australia has a role to play in ASEAN’s emerging knowledge-focused industries. For instance, the Australian High Commissioner to Singapore has previously pointed out the opportunities for Australia and Singapore – two nations with highly sophisticated regulatory systems, a strong focus on innovation, and an interest in the financial industry – to work together in developing a regional RegTech ecosystem to counter money laundering and terrorist financing.
In the cyber-physical systems security industry, the relatively high level of cybersecurity expertise in Australia could lead to opportunities for Australian firms to partner with ASEAN startups and/or provide products to ASEAN nations as demand for cyber-physical systems security grows within the region.
As the ASEAN region enjoys tremendous growth over the next decade, Australia is in a position to benefit as well. International collaboration with our ASEAN neighbours not only strengthens regional connections, it also facilitates economic growth. As a nation we must play to our strengths — and in the case of ASEAN, these strengths are in cybersecurity, energy, agriculture and fintech.