50 posts categorized "World Economic Forum"

June 12, 2014

East Asia: What engines of growth need

WEF EA post blogIn his opening address at the World Economic Forum on East Asia, Vietnamese Prime Minster Nguyen Tan Dung said that efforts to boost the region’s engines of growth are needed to help reinvigorate slowing growth rates. And according to a number of other leaders at the event, there are a variety of ways to achieve this.

Chief among these is the growth-enhancing potential of ASEAN’s full economic integration in 2015. The ability to function as one industrial and production base was seen by leaders as critical to the region’s competitive advantage—putting it possibly on par with the regional power of the European Union. ASEAN’s ability to participate and negotiate as one region in a range of free-trade agreements—including the Trans Pacific Partnership and the bilateral ASEAN Plus One agreements—also provides considerable opportunity to attract foreign investment to its markets. With the burgeoning middle class of a country like Indonesia—where consumers are now more and more in a position to buy cars and electronics—the draw is strong.

Leaders at WEF East Asia also pointed to the importance of regulatory reform as a means to spur growth and competitiveness.  To this end, a minister from Cambodia touted his country’s receptivity to investment, noting that “every sector is open to FDI” and that there are no “alien investor” laws in his country. One Malaysian government official emphasized that his government is “pushing hard” for reforms to improve competitiveness. Already, ASEAN countries have made significant progress on lowering barriers in the trade in goods across the region—with tariffs on more than 99 percent of goods expected to be at zero by 2015. ASEAN is now working on liberalizing regulations pertaining to services to ease access across borders in such sectors as banking.

The focus on services and the difficulty of moving to this next stage, however, points to a continuing stumbling block in ASEAN’s ability to function as one region—the lack of connectivity. Not only do services like finance need a strong ICT network to facilitate transactions and connectivity among countries, businesses in both services and the manufacture of goods alike need well-developed physical transport to ease movement in this geographically dispersed area. The ASEAN Open Skies initiative, which will allow all airlines within ASEAN to compete on intra-ASEAN routes, is one initiative that aims to promote better connectivity among ASEAN nations and there is hope it will be implemented in 2015. But rail, roads, seaports, airports and broadband are all areas in need of investment. On the bright side, the scale of the transport infrastructure requirements—as a minister for transportation from Singapore noted—can represent a substantial opportunity for international financing institutions as well as for public-private partnerships.  

All of these efforts can accelerate the engines of growth and help rev up East Asian economies. But will they bring high-quality growth—that is, the kind that encourages innovation and stimulates quality job formation? There are indications that this may be the case. President Aquino in his opening address noted that the Philippines’ rates of employment for graduates in IT, business processing operations, and electronics exceed 70 percent, with some sectors exceeding 90 percent. And the greater competition that ASEAN economic integration brings is expected to spur businesses to become more innovative and compete more keenly for talent, according to the minister from Cambodia mentioned above.

However, there is one thing that all of these efforts to drive engines of growth need—and that’s stability. The prime minister from Vietnam made this clear in his remarks: “Development is not possible without peace and stability.” He pointed out that any disruption in the region’s shipping lanes—a distinct possibility given recent tensions with China—could mean major disruptions to East Asia’s economy and the world’s. So even if East Asia gets the engines of growth to again fire on all cylinders, the geo-political environment may turn out to be the most critical—and most challenging—factor holding the region back.


Dttl_garycoleman_56x56Gary Coleman is Managing Director, Global Industries, of Deloitte Touche Tohmatsu Limited. He is a member of Deloitte’s Global Markets Committee and is the lead partner in Deloitte’s strategic relationship with the World Economic Forum. Follow him on Twitter @gcoleman_gary.

May 21, 2014

The Philippines: the next GVC success story?

Manila, Philippines blog jpegAccording to the United Nations, economies with the fastest growing global value chain (GVC) participation “have GDP per capita growth rates some 2 percentage points above the average.”1 Much of the remarkable growth in Asia is attributable to this ability to participate in GVCs. The Philippines, where the World Economic Forum on East Asia is opening today, may very well be the next example of this success.

With a 7.2 percent growth rate in GDP in 20132, the Philippines possesses many of the traits needed to move up the global value chain. Not only does it have a stable macro-economic environment, but the country also has a emerging services sector, particularly in business process outsourcing (BPO)—services like call centers and IT that are often outsourced from developed economies. The BPO market in the Philippines now accounts for 9.5 percent of the worldwide market, with metro Manila the second-largest global outsourcing destination.3 And more than 50 percent of the Philippines’ overall GDP value-add is contributed by services.4

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May 15, 2014

Nigeria’s new numbers

Nigerian flagRecently, the Nigerian government announced new GDP numbers that now make it the largest economy in Africa. Having overhauled economic data for the first time in two decades, the GDP figure rose by 89 percent from 2003 to 2010. It’s a number that caught the attention of the world and was much discussed at the World Economic Forum (WEF) on Africa, held last week in Nigeria’s capital city of Abuja.

But is GDP really the best measure of success? If you listened to the debate at WEF, the answer is, probably not. Because when you look behind a remarkable number like that, you can see there are many factors not addressed by this figure—factors that provide clues as to how the economy is really unfolding and how it is impacting quality of life.

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April 29, 2014

Cautiously optimistic: Innovation and Chinese FDI

Aisa Society Image for blogA few months ago, after Summer Davos, I wrote and spoke about China’s new commitment to innovation. Chinese Premier Li Keqiang in his opening address had talked of holding the banner of innovation high and the reforms his government were proposing to achieve that goal. I stated at the time that I was cautiously optimistic about the potential these reforms held.

Just recently, I again had the chance to discuss China and innovation, this time on a panel hosted by the Asia Society in New York City. With the session focused on China’s growing investment in U.S. high-tech companies, inevitably the question of innovation came up—and if these Chinese companies were looking to U.S. acquisitions to help build a culture of innovation at home. Innovation remains a challenge in China, with issues from lax enforcement of intellectual property laws to the difficulty of starting a business contributing factors. Moreover, questions have been raised about whether China’s educational system encourages the kind of creative thinking that generates innovation.

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April 09, 2014

Talent: the first step to innovation?

Post WEF LATAMBuilding innovation is one of those hot topics that yield all sorts of discussion about disruptive technology—the cloud, 3-D printing, social media, digital infrastructure, et cetera. But what spurs innovation may come down to something much more basic: talent. And at the World Economic Forum on Latin America  (WEF LATAM) last week, it was clear that participants from this region agree.

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March 31, 2014

WEF on Latin America: Getting there from here

Panama.According to the competitiveness index produced by the World Economic Forum (WEF), “innovation-driven economies” is the third and highest stage of development. Many Latin American countries are now poised to make the transition to this stage. Most of the remaining countries are only a step or two behind. 

But how does an economy become innovative-driven? One way is by promoting innovation-driven entrepreneurship. That’s the focus of a panel I will be participating in this week at WEF on Latin America in Panama City. Entitled “Innovating for Competitiveness,” the session will explore what steps the region can take to promote not just entrepreneurship but the innovative new businesses that propel an economy into that sought-after “stage three.”

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February 11, 2014

Impact investing: An investment approach starting to interest mainstream investors

This article was co-written with Erik Classon

Blog_tree_money_300x200Since the term, ‘impact investing,’ was first coined in 2009 by the Monitor Group ("Investing for Social & Environmental Impact: A design for catalyzing an emerging industry"), a great deal of interest has grown around this concept. Initially the dialogue around impact investing was concentrated among a niche set of players identifying themselves as impact investors (e.g., social entrepreneurs, foundations seeking to expand beyond grant-making, focused impact investing funds and public sector/supranational organizations). 

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January 28, 2014

Davos 2014: Optimism with a healthy dose of reality

Post-davos photoWith economic recovery seeming to finally take hold this year, I was not surprised that many of the Davos 2014 speakers sounded a positive note for the future. Nowhere was this more evident than in the remarks from country leaders. But these leaders understood that there is still a lot of work to be done—and it was striking how in sync they were when it came to the challenge going forward: building and sustaining growth.

South Korea is focusing on entrepreneurship and building a “creative economy,” where individuals are encouraged to start businesses and put “innovation into action,” according to President Park Geun-hye. Similarly, Liberia is making strategic investments in education and focusing on public-private partnerships to spur the rise of small and medium businesses. Mexico is working to promote start-ups by reforming fiscal policies to allow greater access to credit.

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January 27, 2014

Shaping the future together

Deloitte Davos Live video screen_300x200Times of global change require leaders with a global vision – leaders who inspire confidence and foster innovation. I see this attitude reflected in Davos. I have noticed a remarkable shift of attention at this year’s World Economic Forum. While the meetings in past years focused heavily on finance and the banking industry, representatives of the global technology industry are clearly the thought leaders now.

At the same time, politics seems to have been pushed into the background somewhat – especially, European representatives are less visible this year. But Europe’s image has not yet fully recovered after the Euro crisis and the world is closely watching how European banks will perform in the stress tests.

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January 22, 2014

Safeguarding aviation and travel value chains

PACI blog imageCorruption is recognized as one of the most significant obstacles to economic and social development. It is identified in the World Economic Forum’s Global Competitiveness Report as one of the top five impediments to doing business in 58 percent of the 144 countries analysed.

Having deep experience and expertise in the subject of corruption, prevention, and working with various industries and companies around the world, Deloitte has partnered with the World Economic Forum and their Partnering Against Corruption Initiative (PACI) as well as the Aviation and Travel Industry to explore the effects of corruption on the constantly growing and continuously expanding reach of the aviation and travel industry. Our experience in this arena, confirmed through our work with various industry sectors and companies during this project reveal the readiness of the aviation and travel industry to take another step in the fight against corruption and to work together towards leveling the global playing field through cross-industry and cross-regional collaboration with appropriate stakeholders.

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