This op-ed is part of AASYP’s Digital Dialogues 2022, which is a programme that aims to provide a platform and forum for future leaders from across the region to contribute to the policymaking and diplomacy sphere by engaging in issues relating to innovation and investment, digital economy, and regional mobility.
Both the Association of Southeast Asian Nations (ASEAN) Member States (AMS) and Australia will continue to rely on each other for trade and foreign direct investment (FDI) to adopt the most recent technologies. ASEAN businesses must first strengthen their innovation capabilities to develop new commercial prospects worldwide. Thus, it is necessary to develop human resources in order to foster innovation and investment by providing workers with the knowledge and skills required in the manufacturing sector. Additionally, enhancing entrepreneurs that can innovate using the most recent information and communication technologies. Education institutions are also responsible for opening up greater opportunities for youths to participate in becoming stakeholders through quality research and development that can be valuable for the workforce in the science and technology field. As the world is entering the 4th Industrial Revolution (4IR) phase, it is also significant for investors to have sustainable finances that prioritise green initiatives for innovation and investment when assisting the AMS business and entrepreneurship. Thus, intra-ASEAN and Australia will have to regulate their policy to provide a more inclusive approach to strengthen the participation of innovation and a green economy.
For sustained economic growth, better job opportunities and higher wages, more creative economies are becoming crucial (Muhammad et al. 2018, see Fagerberg et al. 2009; OECD 2012; Maradana et al. 2017; Wong et al. 2005), including digital transformation without jeopardizing environment. Especially, majority of businesses were affected post-COVID-19 pandemic thus, the economy will find its way to be reinvigorated either affecting the physical or virtual spaces. According to a recent study at the ASEAN Digital Integration Index (ADII), there is still significant room for growth in the areas of digital talent, commerce & logistics, and innovation & entrepreneurship (“ASEAN-Austalian development cooperation program (AADCP), n.d.).” As a study by the Harvard Business Review, 2020 have also stated, the majority of ASEAN countries’ digital growth and development are still in their infancy because of their limited digital infrastructure, strict digital regulations, and unequal access to digital tools across gender, class, ethnicity, and geographic lines (“ASEAN-Austalian development cooperation program (AADCP), n.d.).” Therefore, the need to invest in human resources for establishing innovation among AMS plays an important role for future economic growth.
An educated and trained workforce supports the innovation economy by producing knowledge-intensive products and services (Muhammad et al., 2018). There have been several various initiatives and investments that ASEAN-Australia have been conducting for education in innovation. For example, ASEAN-Australia Smart Cities offers technical help, education, training, and encouragement of innovation. It makes use of Australia’s incomparable know-how in data analytics, transportation, renewable energy, green infrastructure, and water governance (“ASEAN-Australia Special Summit Initiatives, 2019).” Moreover, there are also one-to-one financial investment aids from Australia to one of AMS as a result of the Labor government’s offer, such as an additional $470 million in development aid for Southeast Asia (Climateworkscentre, n.d.). Which, $200 million of this has already been committed to the Australia-Indonesia climate infrastructure collaboration, even though the precise mitigation share has not yet been determined. Moreover, the recently announced Singapore-Australia Green Economy Agreement was also formed, which covers the establishment of green value chains and may involve trading in renewable energy, thus establishing a new vision for regional low-carbon economic cooperation and could be a useful guide for Australia as it strengthens its green trade ties with other ASEAN members (ASEAN, Australia and the Role of Climate Cooperation in Southeast Asia’s Net Zero Goals,” 2022). Although some of the policies are new and mitigation shares are undetermined, a study has supported the idea that innovation ability and human capital are intertwined or have a long-term impact on economic growth (Muhamad S, et al., 2018).
To conclude, investment in human capabilities and innovation works coherently. Education in digital transformation without disregarding environmental factors should also be a priority for Australia-ASEAN to foster better sustainable economic growth. More follow-ups and reporting data could also help in improving results after policies are formed. As a result, it is imperative that ASEAN nations create meaningful policy consequences. Enhancing human capital and innovation capacity should take precedence in order to promote ASEAN nations’ capabilities as “innovator” nations rather than “user” nations.
This article was written by Nur Ezzatul Zawani Binti Hussin edited by the Diplomacy Team, and reviewed by the AASYP Publications Team.
Note: The views and opinions expressed in this op-ed are solely those of the writer and in no way represent nor reflect the position of AASYP and members of the AASYP Publications Team. The AASYP Horizons Blog provides a platform for the free expression of opinions and intellectual discourse.