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SCIENCE & TECH
Nov 16, 2017 / 10:28

Industrial Revolution 4.0: Key for Vietnam and ASEAN development

Nguyen Tung

The Fourth Industrial Revolution refers to a set of highly disruptive technologies, such as artificial intelligence (AI), robotics, block chain and 3D printing, that are transforming social, economic and political systems and putting huge pressure on leaders and policy-makers to respond.

Over the past 50 years, ASEAN has notched up many notable achievements. The ASEAN peace dividend, combined with trade and other reforms within the bloc, has stimulated strong economic growth. In the past decade, regional GDP has doubled from 1.3 trillion USD (2007) to 2.6 trillion USD (2016). The incidence of poverty has fallen dramatically and prosperity looks set to keep rising: the population with an income of more than 5,000 USD a year is estimated to grow from 300 million in 2015 to 400 million in 2020, making ASEAN one of the world’s most important emerging consumer markets.
 
The era of the Fourth Industrial Revolution is changing the landscape in significant ways.
The era of the Fourth Industrial Revolution is changing the landscape in significant ways.
But the era of the Fourth Industrial Revolution is changing the landscape in significant ways. It is increasingly apparent that the ASEAN organization should consider a new approach to regional policy and governance. The current model, loosely described as “the ASEAN Way”, has proven itself to be highly effective. It is a commitment to the protection of national sovereignty, to non-interference in the domestic matters of fellow countries, to making decisions based on consensus building, and to an operating style between leaders that is informal. Alongside the ASEAN Way, member nations have also pursued a policy of “open regionalism” that has served as a catalyst for wider cohesion across the Asia Pacific.

 The core principles of this approach to regional relations must remain. But, alongside the ASEAN Way, the region needs a new operating system. In addition to many successes, ASEAN faces considerable challenges, from rising inequality to rapid urbanization and climate change. Arguably the most momentous challenges will come from the spread of the Fourth Industrial Revolution.
 
Equally, 4.0 Industrial revolution will bring tremendous challenges, and some members of ASEAN, such as Vietnam will be more affected than others.
Equally, 4.0 Industrial revolution will bring tremendous challenges, and some members of ASEAN, such as Vietnam will be more affected than others.
With its nature, the fourth industrial revolution will bring huge benefits, such as empowering SMEs and creating new ways to connect citizens to healthcare. The increased productivity from “disruptive technologies” could unleash an additional 220 billion USD - 625 billion USD in annual economic impact in ASEAN by 2030. It will also provide huge value for individuals not captured by traditional measures. One hundred years ago, not even the richest person in the world could buy a TV, an air ticket, contact lenses, or antibiotics. Today, these things are within the reach of ever more people. The Fourth Industrial Revolution will massively expand consumer choice, lower costs and raise quality.

Fourth Industrial Revolution technologies will create new ways for citizens to connect to each other, to trade with each other, and to access services that are currently not available. In Viet Nam, the Philippines and Myanmar, a third or less of the population have a bank account. Under the Fourth Industrial Revolution, citizens will gain access to new sources of information, (for example, news and market prices), new forms of education (such as online courses and virtual classrooms), new healthcare (for example, telemedicine powered by smartphones linked to diagnostic pills) and new financial services. The result could be much more inclusive forms of economic growth.

Equally, it will bring tremendous challenges, such as deep disruption to jobs as AI and advanced robotics undermine both manufacturing and services jobs, and some members of ASEAN will be more affected than others. Other challenges may pose to ASEAN are inequality and political instability; concentration of market power by global giants; more exposure and vulnerability to cyber attacks. 

The Fourth Industrial Revolution also calls for a new way of formulating policy and regulation. The speed of change under the revolution is accelerating, and the old ways of crafting policy, especially cross-border policy, are too slow, too backward-looking and too rigid. Instead, governance and regulation need to become more agile, faster, more iterative and experimental.

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