Prospects For Small Industries Within The Asean Industrial Cooperation Programme

Author : Soyoung Lim
Publisher :
ISBN 13 :
Total Pages : 0 pages
Book Rating : 4.:/5 (137 download)

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Download or read book The Conditions for Development Cooperation for the Digital Transformation in ASEAN Member States written by Soyoung Lim and published by . This book was released on 2022 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: It is recognized by governments, industry and academia that the digital transformation will dramatically change the growth paradigm around the world, but this change will not be uniform across countries and among individuals. Differences in the benefits derived from digital technologies and the conditions of their use vary considerably depending on a country's income level. So what might the digital transformation look like in developing countries? And how to respond? As the issue of global development through the digital transformation has arisen, it is necessary to find ways to cooperate that acknowledge the conditions faced by developing countries. Developing countries face conditions that are quite different from those of developed countries in realizing the digital transformation, which requires a different approach. First of all, there is still a wide gap between advanced and developing countries in terms of digital technology consumption, but developing countries can experience leapfrogging, unlike advanced countries. This occurs especially in areas where large-scale infrastructure investments are required, including the ICT or digital sectors. As a result, many developing countries are able to skip directly to mobile communications without building infrastructure for landlines. In addition, unlike advanced countries, in which digital technology markets are mature, markets in developing countries are rapidly expanding, and the prospects for digital technology utilization projects in developing countries are bright. The digital transformation is widely expected to boost economic growth and productivity in developing countries and lower transaction costs to enhance developing countries access to the global market. Specific benefits from the digital economy have been reported, including rising wages for digital workers, the formation of a market targeting digital startups in developing countries and the emergence of digital platforms that can enhance efficiency and transparency in markets and labor. In addition, digital technology promotes financial inclusion through innovative financial services. In other words, by facilitating small business' access to financial and business information, thereby enhancing access to export markets, it can contribute to achieving inclusive growth, especially in developing countries, by promoting their participation in the global value chain. In addition, it can provide women with opportunities to build their own capacities by providing information that has not been easily accessible for women and has alienated them from major economic activities. There are also challenges that need to be addressed that run contrary to the more optimistic outlook for the digital transformation described above. The most representative risk factor is the exclusion of opportunities from the digital transformation. This is largely due to a lack of digital skills and difficulties in adopting technology, wherein developing country workers are left out of the global digital labor force. There is also a high risk of unfavorable integration of developing countries into the digital economy resulting from their lack of resources, capabilities, and institutions and frequent failures of digital companies in developing countries. The greater the use of digital technology, the greater the digital gap between countries and/or individuals due to differences in economic conditions and capabilities. The digital divide tends to deepen, with infrastructure, accessibility, financial differences in whether or not digital technology is used, differences in the benefits derived from digital technology and differences in digital skill levels. The digital divide can be caused by regional differences between urban and rural areas in developing countries, and by income levels based on education and gender. The gap between the rich and the poor will intensify as automation is realized in accordance with the development of digital technology, eliminating jobs and work for lowskilled workers. Increased vulnerabilities related to digital security and the invasion of privacy, such as consumer and personal information leaks and cyber crimes, are also a side effect of the digital economy. A possible digital disadvantage in relations with developed countries is the return of production bases to developed countries (reshoring) due to the development of digital technology. Recently, as much of the production process has been automated, wages account for less and less of total production costs, but as wages in developing countries have risen, production bases in advanced countries that have moved overseas have been reshoring. This has a profound impact on the developing country's role as a manufacturing hub in the global value chain, which in turn undermines employment and growth. Although it has been empirically demonstrated that overseas relocation remains the predominant production paradigm, and not reshoring, it has been found that job losses in developing countries due to reshoring have been significant. It indicates that automation and reshoring are worsening the employment situation in developing countries. As the concentration of labor in manufacturing industries is gradually decreasing, there is a growing concern over premature deindustrialization; that manufacturing in developing countries will decline or the proportion of manufacturing industries will no longer increase. The proportion of employment in manufacturing, which has emerged over the 20th century, is gradually decreasing, especially in developing countries.