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COMMENTARY

Why Google supports a strong Asean Community

CK LIM knows how important it is for a small business to have a global presence. His company, Ascent Solutions, specialises in cargo security - keeping goods safe as they are shipped across the world. But Mr Lim found that it was hard to find new customers in distant and unfamiliar countries. So Ascent Solutions started a digital advertising campaign and today, business in Latin America and Africa is an important driver of growth.

Like many entrepreneurs, Mr Lim found a new solution to an old problem by leveraging the Internet revolution taking place across South-east Asia. South-east Asians spend more time using the mobile Internet than any other region in the world. Their incredible level of engagement translates to a significant economic opportunity for every South-east Asian country. Research by Google and Temasek finds that Singapore's Internet economy grew from US$6.8 billion to US$8.7 billion between 2015 and 2017.

That same revolution is unfolding throughout South-east Asia - an incredibly diverse region of over 630 million people that have come together as one increasingly prosperous community. The Association of Southeast Asian Nations (Asean) celebrated its 50th anniversary last year. In the last half century, Asean has overseen a miraculous transformation touching the lives of all its people. Between 1990 and 2015, over 100 million South-east Asians - a population larger than Germany's - were lifted out of poverty by the region's economic growth.

The region's prosperity was engineered by design, not accident. The leaders of the region set out to achieve peace and encourage trade. Today, they are building the Asean Community, a single market and production base that will be the fourth largest economy in the world by 2030. Asean's accomplishments show that we achieve more by working together.

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Asean should apply this lesson as it navigates the Fourth Industrial Revolution. China and India have adopted digital-first policies and are outpacing Asean's overall growth. Cities such as Bangalore and Beijing are emerging as Asia's leading hubs for technological innovation and talent. To maintain its competitiveness, Asean must develop a robust digital strategy.

GROWTH ENGINE

Firstly, the region needs to recognise that the digital sector is an important growth engine. In a joint report, Google and Temasek forecast that South-east Asia could have a US$200 billion Internet economy by 2025. With an annual growth rate of 27 per cent, Asean's Internet economy is expanding five times faster than the overall economy.

South-east Asian countries should also approach the digital economy as one community, rather than 10 separate countries. If Asean's digital market remains fragmented, it will lose out to larger competitors. A more digitally connected Asean, on the other hand, benefits every South-east Asian country, by improving local businesses' access to regional customers, technology and ecosystems.

South-east Asian governments have a vital role in supporting the emergence of more success stories like Ascent Solutions. There would be so much to gain by removing barriers to the free flow of information within the region. They affect the economy in the same way as tariffs strangling trade in goods. By harmonising differences in national regulations and streamlining complicated reporting requirements, governments could also lower business costs and increase Asean's appeal to investors. Small local enterprises stand to benefit the most from such changes.

Growth in South-east Asia's digital economy should be inclusive. Small enterprises are the backbone of South-east Asia and a digital ecosystem cannot thrive without them. That's why Google supports greater digital literacy for everyone in the region. In collaboration with Enterprise Singapore, we launched Go Global, an initiative that trains Singapore SMEs on how to export their goods and services using the Internet. Go Global has already helped more than 1,000 SMEs, and we aim to get 2,500 SMEs digital- and export-ready by 2019.

Asean has delivered incredible improvements in its people's standard of living in the last 50 years. To continue doing so for the next 50 years, the region just needs to apply the same formula for success, approaching new opportunities like the digital economy as one community. We are ready to support the development of a more digitally connected and strong Asean.

  • The writer is president, Google Asia-Pacific operations