APEC should think long-term

Officials at the series of APEC meetings that have just kicked off and conclude with the Economic Leaders’ Meeting in November, should be mindful of dates such as 1988, 1996, 2006 – years preceding significant shifts in the balance of economic, social and political forces. The drivers of such change are rarely picked up in today’s top stories and economic forecasts. Strategic foresight seeks to uncover them and analyse their implications.

So while the hangover from the financial crisis and narrative about green growth may dominate world headlines and summit discussions, three bigger long-term issues need APEC’s attention.

First, the shift of growth, current account surpluses and creditor nation status from the developed to parts of the developing world. The last time a move of this order occurred, the financial and economic rules were rewritten at Bretton Woods. Can the necessary adaptation to this transfer take place this time within existing international structures and rules?

Second, the structure of the global economy and the way people participate in it – which will be very different in the 2030s from today. Intangible assets such as intellectual property and attractive locations will have increased in importance; fixed assets such as machinery used in manufacturing processes will be worth less. Trade patterns will change as mass production cedes ground to distributed, customised on-demand fabrication. And with increased automation, the labour market may no longer be sufficient as the means of distributing income. Countries in the region may find themselves having caught up with the currently dominant economic model, only to be required to unlearn it if they are to thrive in a new economic age.

Third, if the benefits of technological and economic change can be realised, the resulting relative abundance will place a strain on many existing political systems. Regimes that have drawn their legitimacy from successfully addressing development challenges, will need to find new grounds. While the distributional role of the State may need to increase to compensate for a non-performing labour market, people will on the whole feel more in control of their lives and less in need of state direction.

The impetus for a secure and prosperous 21st century should come from Asia, particularly groups such as APEC and ASEAN, supported by the G20. Beyond debates about regional economic integration, applying strategic foresight tells us that APEC needs also to consider:

  • a new international mechanism to reconcile the interests of creditor and debtor countries
  • economic policies that look beyond the mass production and consumption-based models of the 20th century, and see labour other than as a raw material
  • political measures that assure citizens of a basic standard of living commensurate with their country’s wealth, while allowing them to benefit from investment in the creation of new, prosperity-enhancing businesses.

Eight, 18 and 26 years ago, plans were made on the international stage without any sense of the seismic geopolitical and economic changes that would take place within 12 months. APEC can do better in 2014.

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