In 2018, Industry 4.0 related initiatives at both the regional and national levels continued to move to the forefront of ASEAN’s leaders and policymakers as an economic growth priority and as a strategic building block of an inclusive, innovative and sustainably growing AEC. In August, the Joint Media Statement from the 50th ASEAN Economic Ministers (AEM) meeting in Singapore stated: “The Ministers welcomed the completion of the Assessment of ASEAN Readiness for the Fourth Industrial Revolution (Industry 4.0) conducted by the ASEAN Secretariat, including the recommendations therein. While acknowledging their individual efforts to prepare for Industry 4.0, the Ministers noted the diversity in the levels of readiness amongst the ASEAN Member States. To this end, the Ministers underscored the value of leveraging on regional platforms to build the region’s collective readiness as well as country-level readiness, including through sharing experiences and best practices.”
ASEAN is already home to several of the world’s leading manufacturing nations. ASEAN is the fifth largest regional manufacturing economy in the world and accounts for 5 percent of the world’s global manufacturing activity. Sixty percent of all manufacturing activity in is in five sectors: beverages & food; chemical and chemical products; electronics, autos, rubber and plastic products. Three ASEAN nations are considered globally competitive in advanced manufacturing: Singapore, Malaysia and Thailand (Source: Global Risks Report 2018, WEF & Straights Times). Building on this foundation represents a strategic imperative for sustaining ASEAN’s global economic competitiveness. Several regional studies about Industry 4.0 related challenges and opportunities in ASEAN have been published McKinsey & Company and ATKearney and various nations have announced national Industry 4.0 initiatives: Malaysia; Singapore; and Vietnam.
Given that a number of Council members are involved in manufacturing activities in ASEAN across a wide range of industry sectors, the Council polled its membership and received positive responses to the idea of forming a Manufacturing Committee. The primary goal of the Manufacturing Committee is to serve as a multi discipline-based platform for members to engage private sector leaders and public-sector policy makers and regulators at both the regional and national levels to advocate for:
- Open, transparent and competitive ecosystems shaping the processes of disruption and revolution of manufacturing industries in ASEAN.
- Highlighting the current and future roles of the US private sector in building block activities which make up 21st century manufacturing in ASEAN.
- Offer an additional cross cutting platform for Council members to advocate for the types of rules, regulations, laws and standards necessary to strengthen domestic ecosystems for attracting investment into 21st century manufacturing activities.
- The members of the Manufacturing Committee will have a lead role in formulating the Council’s priorities for obtaining information, identifying stakeholders to develop relationships with and formulating advocacy positions on policy, regulatory and legal environments which best support the trade and investment interests of members with manufacturing production and related activities in ASEAN.
Industrial manufacturing 4.0 has the potential to support the evolution of production processes from resource use intensive based growth to innovation and productivity driven growth. If appropriate ecosystems are developed, ASEAN policymakers will be better able to meet the public policy challenges associated with changes in the future of work, the need for more efficient and sustainable utilization of natural resources and addressing criticisms from some stakeholder groups that innovation led growth has the potential to exacerbate existing levels of inequality and worsen development gaps within societies and between ASEAN nations. The committee supports the efforts of ASEAN and its members to strengthen the region's Industry 4.0 related frameworks, national digital policy and regulatory frameworks and national manufacturing master plans. Through public-private partnerships, consultative meetings and programs involving U.S. and regional government officials, the US-ASEAN Business Council’s Manufacturing Committee is dedicated to supporting the efforts of our members, as investors and employers, to expand their business activities in ASEAN and act as “thought leaders” in supporting the Industry 4.0 development in ASEAN and in individual ASEAN countries.
The Council considers the following themes as potential influencing platforms and advocacy areas of focus, information gathering priorities, and relationship building targets:
- Identifying key variables (tax policies, investment incentives, ease of imports, which MNC’s include in their investment decision analyses to evaluate a given ASEAN jurisdiction as an FDI manufacturing destination).
- Advocating for best principles and practices for policies, regulations and standards nationally and regional cooperation in strengthening ecosystems for Industry 4.0 led transformation (Automation, Chemicals, Big Data, IOT, etc.) of manufacturing sectors.
- Exploring the impacts of ongoing regional integration and new preferential trade frameworks on national manufacturing activities which are part of global and regional manufacturing sector value and supply chains.
- Key national and regional issues related to human capital, skills, labor policies, and future of work challenges associated with 21st century manufacturing.
- Key trends and best practices in environmentally sustainable green manufacturing.
Regular Engagements with ASEAN Industry and Trade Officials
The Manufacturing Committee will facilitate regular engagement with ASEAN government officials and regulatory bodies. Engagements vary in size and scope according to the communicated goals of members and government officials, from briefings, roundtable discussions to business missions. In 2019, the Manufacturing Committee members will be able to provide thought leadership and participate in business missions to priority markets and the regional ASEAN Economic Ministers (AEM) meeting. In addition, the Manufacturing Committee will conduct manufacturing focused business mission to priority markets starting with Thailand, the current Chairman of ASEAN and a leader in policy & regulatory best practices in several manufacturing industries.
ASEAN 21st Century Manufacturing Ecosystems
The Manufacturing Committee will leverage engagement opportunities to advocate for the national adoption and or regional harmonization of international best practices in policy, standards and regulatory frameworks in areas such as: preferential trade agreements, attracting foreign direct investment in manufacturing activities, enabling the adoption of digital technology applications to manufacturing activities and incentivizing environmentally sustainable manufacturing activities. For example, the Manufacturing Committee will look to leverage the Council’s access to the ASEAN Secretariat and Thai government policymakers to support an ongoing regional industrial regulatory cooperation project led by the ASEAN Chemicals Industries Council (ACIC) to develop an ASEAN chemical management regulatory framework as additional building block of the ASEAN Economic Community (AEC).