Industrial Transformation in ASEAN A Cluster-Driven Model for Regional and Global Collaboration 2026

Conclusion ASEAN at the cusp of major energy and industrial transformation ASEAN stands at the cusp of a major industrial and energy transformation that will shape its competitiveness for decades to come. With rapid industrialization, urban growth and electrification driving some of the world’s fastest-rising energy demand, the region’s progress is both remarkable and complex. Sustaining ASEAN’s growth and competitiveness will depend on how effectively it transitions to a low-carbon, high-value industrial model that enhances productivity, resilience and long-term fiscal stability. Industrial clusters as engines of opportunity Industrial clusters sit at the heart of this opportunity. Concentrating industries, infrastructure and innovation hubs, clusters are a key lever to advance both economic growth and the clean energy transition. ASEAN clusters are already demonstrating success by collaborating locally, nationally and across borders among companies, policy-makers, financiers, and academic and public institutions. However, for clusters to achieve the maximum impact, more of them must progress along a maturity journey – from vision and cluster formation to achievement of scale. Call to action The examples presented in this white paper show tangible outcomes that clusters can achieve, which serve as the basis for further work. ASEAN has made significant strides in advancing its energy and industrial transformation agenda. Achieving its ambitions will demand deeper and more coordinated regional collaboration. The World Economic Forum welcomes joint action for policy-makers, clusters and financiers across three key priorities:1Align policies and markets to accelerate transition Achieving ASEAN’s energy transition requires stronger policy alignment and market coherence across member states. Harmonizing technical and market standards such as grid codes, tariff structures and REC mechanisms while gradually rebalancing fossil fuel incentives and developing a common carbon pricing and disclosure framework will strengthen investor confidence. 2Build collaborative ecosystems Industrial clusters can serve as collaborative ecosystems and testbeds for clean technologies like renewables, hydrogen and shared carbon capture networks reducing risks and cost. Pooling capital across public, private and financial partners enables shared infrastructure, while integrating offtake partners secures demand, reduces risk and enhances project bankability. These ecosystems can span national, regional and global networks. 3Mobilize finance to scale the transition ASEAN’s transition demands large-scale capital mobilization through stronger collaboration and innovative financing between MDBs, international financiers, investors and governments. While progress through sustainable finance tools and funds is notable, financing levels remain insufficient for both green and transition finance. Governments can play a key role in strengthening de-risking through, for example, concessional finance, guarantees, tax incentives, viability-gap funding, tripartite/CfD contracts and public-private partnership models, essential to attracting private investments. Industrial Transformation in ASEAN: A Cluster-Driven Model for Regional and Global Collaboration 33