VIENTIANE -- For consumer-focused U.S. companies such as Uber, Airbnb and Facebook that are keen to expand in Southeast Asia, the key to success is gathering data on potential customers. But their Asian hosts, concerned about privacy and security, are often reluctant to let such data flow freely.
"Good access to data is crucial to all businesses, but there is a move towards data localization -- a desire [among governments] to keep data from moving across borders," said Alexander Feldman, president and CEO of the US-ASEAN Business Council on the sidelines of the ASEAN Business and Investment Summit on Wednesday.
The head of the association of 150 major U.S. companies operating in the region said: "If [members] had to set up eight data centers across ASEAN, it would be a financial burden and make no economic sense. E-commerce is the engine of growth and the great equalizer for small and medium-sized companies that enables them to serve the world."
If such obstacles are removed, Feldman said there will be great interest among U.S. companies in expanding their operations in Southeast Asia. Membership in the council, which was formed in 1948 to represent American business interests, has increased 75% in the last seven years. "ASEAN survived the financial crisis much better than anywhere else. They continue to grow 5-6%" a year, he said.
With Southeast Asia as a whole possibly becoming the world's fourth-largest economy by 2030, that interest looks set to grow. "They are one of the youngest regions in the world. As ASEAN harmonizes its regulations and makes it easier to do business across the 10 countries, it really creates a scale to the economy that would enable companies to tap the 625 million consumers that live in this region," Feldman said.