On July 25, 2017, 12 Asian business organizations gathered together in Seoul to hold the 8th Asian Business Summit (ABS). The business leaders from 10 Asian economies had extensive discussions on the major challenges that these economies are now facing with a focus on Asia’s growth strategy, innovation and globalization. Asian business sectors reached a consensus that peace in the Northern-east Asia will bring economic prosperity to Asia and longed for a lasting peace and stability in Korean peninsula. As a result, the Summit adopted a joint statement to show the expectations and aspirations of the Asian business communities as follows:

1. Asia’s Growth Strategy

Asia is the region which many consider as the growth engine of the world economy, and its huge population and size of the market are our strength. In order to ensure sustainable growth in Asia despite the prolonged period of slow growth globally, it is necessary for effective strategies to be formulated and implemented in each economy. Also, it is agreed that some Asian economies are confronted with the challenges of low birthrate and longevity, and the business leaders in those economies have discussed ways to tackle problems arising from it.

The Summit reiterates that the growth strategy should enhance competitiveness through initiatives such as system reform, deregulation, growing new industries and developing talented human resources that are backed by the appropriate policies. During the session, growth industries such as Internet of Things (IoT), Artificial Intelligence (AI), biotechnology, big data, smart city, FinTech, culture, health care and medical sciences were referred to as major promising areas.

Services will also be an imperative driver of Asia’s future growth. As Asian economies power ahead, there is a need for regulatory frameworks to support the development and growth of their services sectors, especially in economies where services typically assume a bigger role.

With the advancements in information technology, the importance of digitalization has increased in all areas, including the manufacturing sector. However, the Summit shares the common view that there are many cases where the legal system and other challenges such as skilling, internet penetration etc. fails to support these developments and consequently hampers growth. In this regard, Asian business sectors should continuously call on their governments to make improvements.

2. Innovation

Collaboration in R&D among various entities is an important key to enhance innovation, and the Asian business communities will make an effort to cooperate in all realizable areas. Also, Asian economies agree on the need for an integrated response to the 4th Industrial Revolution, the Society 5.0 (a super smart society), Mass Entrepreneurship and Innovation, and other innovative initiatives that will contribute to the realization of Sustainable Development Goals (SDGs).

In order to facilitate continuous innovation, there must be an environment where Intellectual Property Rights (IPR) can be used fairly and balanced way to ensure free cross-border data flows. The Asian business community should determine ways that can achieve these outcomes and the accompanying policies to be implemented in their respective economies.

The Summit welcomes the Paris Agreement which came into effect in November 2016 to address climate change. Since environmental problems cannot be solved by the efforts of one economy, the business leaders in Asia underlines the importance that the governments in this region collaborate together on this effort. And at the same time the Summit will be striving to develop eco-friendly technologies and distributing them widely in the private sector. Moreover, it is agreed that specific actions need to be taken for reducing energy consumption and expanding the use of new renewable energy, and will contribute towards achieving sustainable development in Asia.

3. Globalization

The Summit expresses their strong concerns over the global rise of anti-globalization and protectionism in recent years, and reached the common view that Asian Economies should fly the flag of free trade high and should cooperate in order to uphold and strengthen free and open international economic order.

Greater coordinated action will be needed to address the unintended effects of globalization. In this regard, governments and businesses should seek to ensure that the benefits of globalization are both better communicated and more equitably distributed across their communities. International organizations and platforms such as this summit play an important role to bring together the relevant stakeholders to ensure that the merits of our open trading system do not become drowned out by calls for protectionism which only seek momentary and populist solutions but not address the fundamental needs for collective growth.

In order to ensure sustainable growth of Asian regional economy, Asian business communities recognize the need to enhance regional economic integration, and agree to make efforts in cooperation on an early realization of the Free Trade Area of the Asia-Pacific (FTAAP) and the Regional Comprehensive Economic Partnership (RCEP) Agreement in a comprehensive manner with setting high standards. Also, it is agreed that Economic Partnership Agreements (EPAs) and Free Trade Agreements (FTAs) should not be exclusive and trade should be liberalized so as to achieve WTO compatibility, in moving towards the direction of universal benefit for everyone. In particular, the Summit shares the view that tariff elimination on intermediate goods would lower the manufacturing cost throughout the supply chain and thereby reinforce the price competitiveness of the region as a whole.

In order to solve regional economic asymmetries in Asia and for everyone to enjoy the benefits from globalization, it is agreed that connectivity is essential and can be better achieved by enhancing regional infrastructure-developments in terms of both quality and quantity and promoting initiatives including the Belt and Road Initiative that will contribute to the development of connectivity. For this, Asian business sectors will take an active role in Public-Private Partnerships (PPPs) and call on the governments to ensure that both public and private sectors can share risks, resources and decisions in building and implementing such projects.

Source: Keidanren

Image: FKI