OECD Southeast Asia Regional Forum: Opportunities and Policy Challenges of Digital Transformation in SEA


Thursday 24 August 2017, Bangkok, Thailand

Opening Remarks by Angel Gurría, OECD Secretary-General

(As prepared for delivery)


Minister Virasakdi FUTRAKUL, Minister Pichet DURONGKAVEROJ, State Minister Kazuyuki NAKANE, Ambassadors, Ladies and Gentlemen,

I am delighted to welcome you to the 2017 OECD Southeast Asia Regional Forum on “Opportunities and Policy Challenges of Digital Transformation in Southeast Asia”. I’d like to begin by thanking the Government of the Kingdom of Thailand for hosting this event. I’d also like to congratulate the ASEAN on its 50th anniversary year.

This Forum reflects the deepening engagement between the OECD and Southeast Asia. We have been working together to share best practices and promote regional integration for over two decades. In 2014, with the support of Japan, we launched the OECD Southeast Asia Regional Programme, and since then our level of co-operation has intensified even further.


Southeast Asia is a key driver of global growth

Southeast Asia is of strategic priority to the OECD and its 35 Members. Combined GDP makes the region the sixth-largest economy in the world, and it is estimated that it will be the fourth-largest economy by 2050. The OECD projects the ten ASEAN countries to experience annual average growth of around 5% over 2017-21, compared to the 4% OECD average.

This progress is transforming the lives of Southeast Asia’s 600 million inhabitants, by raising income, reducing poverty, and integrating with the world economy. As a whole, the ASEAN region is second only to China in employment of workers participating in Global Value Chains (GVCs). When you look at services, ASEAN’s exports grew from 113.8 billion US dollars in 2005 to 305.8 billion in 2014, nearly tripling in ten years.

To keep the momentum, many countries in the region are investing in people, with impressive results. Access to education has expanded and most Southeast Asian countries outperform those with a similar GDP on our Programme for International Student Assessment (PISA), which measures the knowledge and skills of 15-year-old students.

In the latest PISA results, Singapore performed better than all other PISA-participating countries and in Viet Nam, even the most disadvantaged students outperformed their advantaged peers in about 20 other countries. Furthermore, Indonesia saw science performance rise by 21 points between 2012 and 2015 alone.

So the region is well placed to reap the benefits of the digital economy. The focus of this year’s Forum could not be more timely.


Southeast Asia can reap the benefits of digital transformation

Fully benefitting from the opportunities linked to digitalisation will require that all individuals, businesses and governments have reliable and affordable access to digital networks and services. This requires effective telecommunications policies, based on sound competition, that reflect the need for a wide diffusion of digital networks, and targeted measures for disadvantaged people, firms and regions.

But mere access to digital networks does not ensure effective use. Policy will also need to help equip workers and citizens with appropriate skills to use the technology; enable complementary investments in organisational change and process innovation; and foster competition and sound firm dynamics.

Investment in R & D is key. There has been good progress in some economies in the region, however, R&D investment remains very low in several countries in the region, with the exception of Singapore.

The digital transformation will provide new job opportunities for many but raises challenges for others, with the risk of growing inequalities in access to jobs. Sound labour, skills and social policies can make it easier for workers to grasp the new opportunities.

The digital transformation can not only support productivity growth and the integration of firms into global value chains, but also help economies tackle tough issues, such as meeting future energy needs with low emissions and improving delivery of health services.

The rapid adoption of new technologies in the region shows the potential for leap-frogging. From essentially zero uptakes in the early 2000s, today fixed broadband subscriptions are heading towards 10% penetration in Malaysia, Thailand and Viet Nam, although this is still too low. In comparison, the OECD average is 30%. The ASEAN average is only 5%, although mobile broadband subscriptions are considerably higher at 63%. In OECD countries, mobile broadband subscriptions are over 99%.

More than 80% of adults are now connected to the Internet in Singapore and over 75% in Malaysia and Brunei. These are in line with the OECD average at almost 84%. However, in Cambodia and the Lao People’s Democratic Republic internet usage remains low at around 25% and 20% respectively.

Digital divides also exist between urban and rural areas. In Viet Nam, for instance, firms’ use of the Internet is almost at 100% in Ho Chi Minh City, compared to a little over 70% in the more mountainous North-East.

Fixed broadband subscription costs are relatively high in several countries – representing over 8% of per capita gross national income in the Philippines, and over 12% in Cambodia, compared to well less than 2% in Japan, Korea, Australia and New Zealand.

In addition, the potential benefits of the digital transformation go hand-in-hand with challenges to jobs and skills, to privacy and security, and to public institutions. Southeast Asia specifically faces concerns about the possible reshoring of manufacturing activities to advanced economies, enabled by automation.

Bridging these gaps and addressing these challenges will require governments in Southeast Asia to forge coherent and comprehensive policy approaches.


The OECD is supporting digital transformation in Southeast Asia

The OECD welcomes the chance to partner with you on this journey.

We work with all 10 ASEAN countries through the Southeast Asia Regional Programme; more specifically, through the Regional Policy Networks on Sustainable Infrastructure, Education and Skills Development, and Small and Medium-Sized Enterprises (SME). For example, the OECD is currently working on a report on “Maximising the benefits of the digital economy in support of SME productivity in the Southeast Asia region”, with the interim report coming out next year. The Regional Programme also helps leverage the “Going Digital” project that supports countries to seize the benefits of digitalisation for inclusive growth.

In addition to this, nine Southeast Asian countries have joined the OECD Daejeon Declaration on Science, Technology, and Innovation Policies for the Global and Digital Age, which sets out common guidelines and commitments to support science, technology and innovation to foster sustainable economic growth, job creation and enhanced wellbeing.


The OECD’s broader activities as part of the SEA Regional Programme

Our Southeast Asia Regional Programme also carries out a broad range of activities relevant to the challenge of digital transformation with its Regional Policy Networks on good regulatory practice, investment, education and skills, SMEs, tax policies and sustainable infrastructure, as well as with concrete regional initiatives on trade, innovation and gender.

On a country-specific level, we have a Joint Programme of Work with our Key Partner, Indonesia. Moreover, Indonesia, Thailand and Viet Nam are members of the OECD’s Development Centre. And Ladies and gentlemen,

There is a saying now in the business community: “There is no digital strategy anymore. Just strategy in a digital world”. We need to absorb this truth in the policy community – there is no digital policy anymore, just policy in a digital world. Adapting soft and hard infrastructure; labour markets; social safety nets; regulatory frameworks and laws to our digital age is one of the defining challenges of our day.

I am delighted that the OECD and Southeast Asia are collaborating in this essential area, and I look forward to hearing the fruits of your discussions. You can count on the OECD to help you design, develop and deliver better digital policies for better lives in Southeast Asia.

Thank you.


Documents connexes