Southeast Asia countries are in stiff competition to be the region’s top AI hub

Countries in Southeast Asia that make up the Association of Southeast Asian Nations (ASEAN) are quietly battling with each other to claim the region’s top AI hub position.

According to CNBC, the 10 countries in Southeast Asia’s emerging economies have a combined population of 672 million people and already have a competitive edge over Europe or the US.

Youth demography gives ASEAN members an advantage

The region boasts over 200 million people between the ages of 15 and 35. The youthful and tech-savvy population makes Southeast Asia adaptable to future technological advances. This, coupled with support from member states’ governments for speeding up AI in the region could be advantageous to the people, especially the workers.

“AI can significantly improve productivity across industries, and this boost in efficiency can lead to an uplift of incomes for all workers,” Jun Le Koay from the consultancy Access Partnership and the author of the research paper “Advantage Southeast Asia: Emerging AI Leader,” told CNBC.

“Additionally, as industries increasingly adopt AI technologies, new jobs are emerging that will require AI skills. This evolution creates opportunities for low-income populations to acquire new skills and transition to better-paying positions.”

~ Le Koay

According to Le Koay, the AI boom also offers vast opportunities for the region to capitalize on its existing infrastructure. These countries have already made significant efforts towards enhancing internet access over the past decade which has helped build a “digitally native population ready to adopt and innovate with AI.”

Smartphone adoption ranges between 65% and 90% in ASEAN nations which should also see AI adoption rapidly take shape.

Network Media Consulting CEO and scholar at the London School for Economics, Grace Yuehan Wang told CNBC that: “ASEAN as a region has demonstrated a strong GDP growth rate in recent years and undoubtedly is one of the most economically prosperous blocs in the world in the foreseeable future.”

She however highlighted that a developed digital infrastructure, education of “high-level technical talents including AI, as well as world-level universities, successful industrial and research collaborations are some elements still lacking in ASEAN’s AI ecosystem.”

According to her, competition is mainly on attracting foreign direct investment and collaborations with world-leading universities.

All countries in Southeast Asia have established AI strategies

The 10 countries that make up the ASEAN club – that is Brunei, Cambodia, Indonesia, Laos, Malaysia, the Philippines, Singapore, Thailand, and Vietnam have all published their national AI strategies with Singapore being among the first to reveal its vision in 2019.

Singapore updated its strategy in December last year and its vision includes increasing AI workforce to 15,000, which is triple the current amount while it is also considering creating research and development centers.

The island opened its AI Center of Excellence for the Manufacturing Sector in September to integrate AI across supply chains. Its AI mission has full government support which pledged to invest $741 million in the next five years.

Singapore came out first on Salesforce’s 2023 Asia Pacific AI Readiness Index, which evaluated 12 states, while other ASEAN members who made it on the list were Malaysia, Indonesia, Vietnam, the Philippines, and Thailand although they occupied lower rankings between eighth and twelfth spots.

While Singapore appears to have the upper hand, its neighbors are not backing down but have also made efforts to make a mark in the AI sector.

Vietnam is betting on its strengths in assembly, testing, and packaging capacities as it meets global demand for chips.

The country last year unveiled an open-source language model known as PhoGPT, specifically for Vietnamese users and a localized alternative to ChatGPT.

“English-dominant AI models cannot be applied to all social and cultural contexts, while on a deeper level, it demonstrates the efforts in overcoming fears of widening existing divides and inequalities among the less powerful technology regions and countries.”

~ Wang

Other ASEAN members are looking at capitalizing on AI for traditionally labor-intensive industries. For instance, Cambodia’s 60-page strategy highlights how the country wants to harness the technology for “social good” and agricultural technology, boosting the sector which accounted for 22% of its GDP in 2018. The sector also employed three million people as of 2018.

Not all ASEAN nations are ready

However, the ASEAN members not as digitally developed as Singapore face challenges to becoming AI-ready and achieving a full-blown AI policy.

“There are several regulatory building blocks that need to be intact and robust before credibly embarking on AI.”

~ Kristina Fong, lead researcher at ASEAN Studies Centre

These developments also come as the ASEAN countries released their guide to AI governance and ethics in February, diverging from Europe, which had attempted to persuade them to follow the EU’s AI regulations.

ASEAN countries argued that the EU was too quick to adopt regulations without fully understanding the risks.

Commenting on the regulations, Wang said by diverging from EU regulations, ASEAN members were not necessarily in a battle between choosing a Western or Chinese approach as international cooperation remains critical for ASEAN’s AI ethics framework.

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