Hopes that economic integration will be implemented by end-2015, at least for core ASEAN countries, have been dampened by delays in efforts to harmonise customs procedures and other key regulations and standards. In fact, some larger member-nations have become even more protectionist, pressured by local companies fearful of losing market share and by concerns over the slowdown in China and other external risks. While ASEAN’s less developed nations, which are even further behind on implementation, could be forgiven for protecting national industries, the fact that some of the bloc’s largest economies are concerned about opening vast domestic markets to regional rivals could be a major barrier to an effective AEC. What can be done to resolve this situation? Are the benefits of integration extolled by governments fully understood by private sector players? Should ASEAN’s frontier markets be concerned that the AEC will deepen development imbalances rather than eliminate them? What major changes are required within industry and society to ensure that integration is accompanied by sustained rapid economic growth? What should member-states do to address the region’s low productivity rates?

As ASEAN strives to fully integrate, companies in Japan, China, Korea, and to some extent India are already positioning themselves for the benefits of a single regional market. Direct investment by Japanese businesses in Indonesia, Malaysia, the Philippines, Thailand and Vietnam alone already accounts for more than one tenth of Japan’s total overseas investment. China aims to more than double two-way trade with ASEAN to US$1 trillion in 2020. Rivalry between leading powers is already being felt in Cambodia, Laos and other frontier markets where big infrastructure projects are up for grabs. How transformative will these capital inflows be for the region’s economies as a whole? Could the AEC turn out to be even more beneficial to outside investors than to ASEAN-based businesses? What impact will greater competition from Japan, China and other countries have on the expansion of local businesses? To what extent will the geopolitical aspects affect ASEAN government strategy?

Regional CEOs from two leading multinational corporations discuss the opportunities presented by a single ASEAN market and the challenges they are facing and tackling as they expand in the region.

The potential opportunities from ASEAN integration have thrown into focus the need to boost productivity and the readiness of the region’s businesses and economies to compete effectively. A key factor is the level of education, skills training and technological access and expertise that will allow each country to take full advantage of digital and other advances and sustain a high standard of innovation across industries, services and society. While big cities in Southeast Asia have large numbers of social media users, due to some extent to low- priced smartphones, the use by various industries of disruptive technologies such as the Internet of things, big data, cloud technology and robotics needs to expand, along with the supporting infrastructure, while education should focus more on the digital future. What can policy-makers do in the short term to address this innovation gap? What can ASEAN learn from China whose technology revolution, built on virtually no legacy, allowed it to leapfrog almost every other global economy? Can ASEAN create the cohesion between research, education, technology and finance found in hubs like Silicon Valley? As technology transforms processes in both big companies and SMEs, how will governments deal with the impact on jobs?

A number of key ASEAN companies have already begun positioning themselves for a single market, expanding in their own country and across the region, either organically or by acquiring competitors. Consolidation is expected to accelerate as the AEC is implemented, with competition from companies outside ASEAN also likely to intensify. As ASEAN brands build up their presence in multiple Southeast Asian economies, can their growth become the springboard for expansion beyond the region? Do ASEAN managers have the right mindset to become global champions? Which companies are leading the way? Which sectors offer the most promise? What are the key strategic and operational drivers behind a successful global campaign, and what challenges have to be overcome? CEOs from leading ASEAN brands share their insights.