Asia Pacific must act now to stimulate regional economic recovery
A new report launched today by PwC, Asia Pacific’s Time, explores what the region needs to do now, to build on the success of the last three decades of economic growth, and calls on governments, businesses and society to act now in order to ensure the region can secure its collective future.
Following the recent signing of the world’s largest trade agreement, the Regional Comprehensive Economic Partnership (RCEP), PwC Asia Pacific’s report, titled Asia Pacific’s Time, the first in our series of perspectives on the Asia Pacific region, sets out five growth pillars that will enable a resilient future and the new roles key stakeholders will have to play.
Acknowledging the immense diversity across the region, the report presents growth strategies for Asia Pacific whilst recognising that local customisation is not only required but is critical for successful implementation.
The report was commissioned in view of the continuous disruption and challenges to economic growth in the Asia Pacific region in the past few years. Trade protectionism, geopolitical tensions, changing demographics and climate change have all threatened the region’s growth. The COVID-19 pandemic has exacerbated the challenges and accelerated the need to act. The report highlights the urgent need for strong leadership with a fresh vision, supported by enabling policies that facilitate government, corporate and social collaboration.
Raymund Chao, PwC Asia Pacific Chairman said, “The Asia Pacific region can no longer rely on passive growth in the hopes its fundamental growth factors such as urbanisation, human capital, trade flows and rising adoption of technology, will continue to attract enough investment to steer it through these challenging times. Instead stakeholders must be more self-reliant by supplementing global investment with visions and strategies that are more Asia Pacific-centric.
“New growth principles of resilience, co-ownership, transparency and a broader shared purpose will be key to this,” said Chao.
The report identifies five key and interconnected pillars to focus on in order to build a more resilient and inclusive future for Asia Pacific.
Pillar 1 — Advancing the digital economy: Companies should identify the right areas for digitalisation and prioritise suitable deployment of technological solutions across their value chain. However, companies will also need to adopt preventive measures on cyber resilience, with governments facilitating regulations and public-private partnerships against cybercrime.
Pillar 2 — Enabling regional enterprise growth: Enterprises should adopt a capability-driven regionalisation strategy based on three foundational areas: operational performance, product and process innovation and go-to-market excellence, along with digital adoption and regional expansion in the services sector.
Pillar 3 — Rebalancing supply chains and fostering innovation: There are opportunities for companies to restructure their global supply chains and transition to new regionally integrated networks. These technology-enabled, regional supply chains will help organisations better manage their procurement, production and distribution networks to achieve higher transparency and greater resilience.
Pillar 4 — Expanding and future-proofing the labour force: Reskilling programmes that align to the specific needs of companies and employees can reshape workers’ abilities to contribute to economic success, while partnerships between government and industry can make upskilling more effective. Governments should lead by realigning the education system to priorities for future growth and articulate new roles and responsibilities for business and society.
Pillar 5 — Building climate change resilience towards a net-zero future: Asia Pacific needs to take a leadership role in creating a more sustainable future. The region should create a circular economy that helps the world move towards net-zero carbon emissions by promoting collaboration between stakeholders including governments, businesses, environmental agencies and society.
Niphan Srisukhumbowornchai, Clients & Markets Leader and Tax and Legal Partner added, “The Asia Pacific region, home to 60% of the world’s population, has transformed into a global economic powerhouse. However, the growing economic challenges today make it more important than ever for stakeholders to adapt and come together for regional economic and business prosperity, as well as social advancement. And Thailand is among the key members of this dynamic region.
“We’re different countries with different prospects. But with the implementation of these growth pillars, I believe that we can all build a more resilient and inclusive future as a region. The signing of the RCEP should be seen an opportunity for Thailand and other members to shore up multilateral trade and investment, including opening up new doors for Thai exporters to expand into foreign markets as well,” he said.
