Southeast Asia: Three paths to prosperity

Click on graphic

A new report from McKinsey examines the transformation of Southeast Asian economies over the coming decades. The report highlights three forces - greater regional integration, urbanisation, and new technologies and innovation, that hold the key to accelerating productivity and creating broad-based prosperity.

According to the report, as the regions cross-border flows deepen and if the Asean economic community integration plan is successful, it will lead to "freer movement of goods, services, capital and people among the member-states?" Together these opportunities could be worth $280 billion to $615 billion by 2030, which is roughly 12 per cent of the regions projected gross domestic product that year.

The second force the report analyses is the rapid pace of urbanisation. By 2030, McKinsey expects the level of urbanisation to rise to 45 per cent with an additional 90 million residing in cities. This continued growth of cities could potentially add $520 billion to $930 billion to the region's GDP.

The third force the report examines is introduction of new technologies and innovation. According to the report, if the region can put in place the "necessary backbone infrastructure, it could harness the power of technology to drive productivity improvements." The report suggests that mobile internet, big data, the internet of things, automation of knowledge work and cloud technology could together have the potential to unleash $220 billion to $625 billion in annual economic impact by 2030.