Seizing opportunities : ASEAN country cluster readiness in light of the fourth industrial revolution

Technological advances of the fourth industrial revolution (4IR) threaten Southeast Asian countries’ industrialization model and expose its workforce to the risk of substitution. Using the Dynamic Pattern Synthesis method to ascertain how Southeast Asian countries are prepared to face these risks, we have identified three clusters based on manufacturing resources and associated them to different levels of technological capabilities. While the Cluster 1 countries Cambodia, Laos and Myanmar prove the least and Cluster 3 nations Malaysia, Thailand and Vietnam the most advanced, the preparedness of Cluster 2 countries Indonesia and the Philippines shows mixed results. Our findings emphasize the importance of human capital and trade paired with strong institutions to advance technological abilities, based on which we discuss each cluster's readiness for the 4IR.