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Despite rising trade barriers business leaders plan to increase investment in Asia Pacific

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Business leaders* across Asia Pacific experienced more barriers to cross border activities in 2019 than they had expected and they anticipate similar level of restraints in 2020.  Business leaders also predict increased challenges in the year ahead with 25% expecting an increase in challenges hiring foreign workers, 26% saying the same for providing or receiving services across borders and 24% saying moving moving data will become even more of a challenge in 2020.

This finding comes from the latest survey by PwC of over 1,000 business leaders from all 21 Asia-Pacific Economic Cooporation (APEC) member economies.

Most business leaders also had a clear message to Asia Pacific policymakers.  When asked which one change to policy would have the most impact on their ability to grow their business,  44% of business leaders said a reduction in tariffs or more directly a resolution to US-China trade tensions would be the greatest help.

Despite concerns about tariffs and the trade tensions between the US and China, business leaders remain positive about prospects for their own organisations, with 34% “very confident” of revenue growth in the year ahead, little changed from 35% in 2018.

Viet Nam continues to top the list for an increase in foreign investment with Australia taking the second position and Singapore third. For the first time since 2015, when PwC PwC began analysing net future investment targets across borders in Asia Pacific, neither China nor the US make the top three.

“Uncertain trade conditions have impacted the relative attractiveness of the US and China in this year’s survey,” said Bob Moritz, PwC’s Global Chairman.  “While countries like Viet Nam and Australia are benefitting as companies begin to rethink their footprint and look closely at the increased risks of new trade rules.”

There is also relatively good news on the impact of automation on jobs.  More businesses 36% say they are creating jobs as a result of automation than are reducing headcount (24%) but the gap is narrower than last year. More businesses also say they are redefining roles and responsibilities as a result of automation.

But while business leaders are creating more jobs they are also struggling to fill them with 23% saying they are finding it hard to recruit the talent they need.  Faced with increasing barriers to movement of labour in some markets, business leaders are now ramping up their investment in upskilling their workforce with 86% saying they will increase the budget allocated to digital skills development in the year ahead.

“Providing the skills to ensure that no one is left behind as technology revolutionises the workplace is one of the biggest challenges we face,” said Bob Mortiz.  “Business, policymakers, NGOs and educators must come together as we look to reskill people on a massive scale across industries, the public and private sectors and the whole Asia Pacific region.”

Regulation and Trust:  In other findings from the survey a majority of business leaders across Asia Pacific say additional regulation is needed to enhance public trust in the areas of artificial intelligence (72%), cyber security (76%) and privacy (70%).

“Business leaders don’t often call for more regulation but companies are acutely aware of the risk that disconnected or ineffective policies in areas such as AI, cyber security and privacy protection can have on their plans for investment and the trust that consumers have in business,” said Bob Moritz.

“With regulation of AI at an early stage there is a real opportunity for policy makers across Asia Pacific to develop standards that support innovation but also promote inclusive and responsible AI.  But the time to act is now and we must ensure that fragmented AI policies don’t become a new digital barrier to progress in the Asia Pacific region.”

The need to move quickly on a coordinated policy framework  is reflected in how business leaders are now viewing advanced automation and AI.  Thirty seven per cent of business leaders across Asia Pacific say AI and automation is a C-suite priority for them with another 49% saying it is a priority at a division or IT level.  Only 12% of Asia Pacific business leaders are not viewing AI and automation as a key factor for their business in the next two years.     

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Wide Variations in Post-COVID ‘Return to Normal’ Expectations

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London, UK, Covid-19 restrictions in place in Soho. IMF/Jeff Moore

A new IPSOS/World Economic Forum survey found that almost 60% expect a return to pre-COVID normal within the next 12 months. including 6% who think this is already the case, 9% who think it will take no more than three months, 13% four to six months, and 32% seven to 12 months (the median time). About one in five think it will take more than three years (10%) or that it will never happen (8%).

Views on when to expect a return to normal vary widely across countries: Over 70% of adults in Saudi Arabia, Russia, India, and mainland China are confident their life will return to pre-COVID normal within a year. In contrast, 80% in Japan and more than half in France, Italy, South Korea, and Spain expect it will take longer.

At a global level, expectations about how long it will take before one’s life can return to its pre-COVID normal and how long it will take for the pandemic to be contained are nearly identical. These findings suggest that people across the world consider that being able to return to “normal” life is entirely dependent on containing the pandemic.

An average of 45% of adults globally say their mental and emotional health has gotten worse since the beginning of the pandemic about a year ago. However, one in four say their mental health has improved since the beginning of the year (23%), about as many that say it has worsened (27%).

How long before coronavirus pandemic is contained?

Similar to life returning to pre-COVID normal, 58% on average across all countries and markets surveyed expect the pandemic to be contained within the next year, including 13% who think this is already the case or will happen within 3 months, 13% between four and six months and 32% between seven and 12 months (the median time in most markets).

Majorities in India, China, and Saudi Arabia think the pandemic is already contained or will be within the next 6 months. In contrast, four in five in Japan and more than half in Australia, France, Poland, Spain, and Sweden expect it will take more than a year.

Change in emotional and mental health since beginning of the pandemic about a year ago

On average across the 30 countries and markets surveyed, 45% of adults say their emotional and mental health has gotten worse since the beginning of the pandemic about a year ago, three times the proportion of adults who say it has improved (16%)

In 11 countries, at least half report a decline in their emotional and mental health with Turkey (61%), Chile (56%), and Hungary (56%) showing the largest proportions.

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African fisheries need reforms to boost resilience after Covid-19

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The African fisheries sector could benefit substantially from proper infrastructure and support services, which are generally lacking. The sector currently grapples with fragile value chains and marketing, weak management institutions and serious issues relating to the governance of fisheries resources.

These were the findings of a study that the African Natural Resources Centre conducted from March to May 2020. The centre is a non-lending department of the African Development Bank. The study focused on the impact of the Covid-19 pandemic in four countries – Morocco, Mauritania, Senegal and Seychelles. The countries’ economies depend heavily on marine fisheries. The fisheries sector is also a very large source of economic activity elsewhere in Africa. It provides millions of jobs all over the continent.

The study dwells on appropriate and timely measures that the four countries have taken to avoid severe supply disruptions, save thousands of jobs and maintain governance transparency amid the ongoing global uncertainty and crisis.

Infrastructure shortcomings include landing facilities, storage and processing capacity, social and sanitary equipment, water and power, ice production, and roads to access markets.

Based on the findings, researchers made recommendations to strengthen the resilience of Africa’s fisheries sector in the context of a prolonged crisis, and looking ahead to a post-Covid-19 recovery.

The report strongly advocates for:

– Increased acknowledgment of the essential role of marine fisheries stakeholders and the right of artisanal fishermen to access financial and material resources.

– Strengthening the collection of gender-disaggregated statistical data in a sector that employs a vast number of women and youth.

– Establishing infrastructure and support services at landing and processing sites of fishery products, with priority access to water.

– Investing in human capital to ensure high-level skills in the different areas of fisheries management.

– Improving governance frameworks by encouraging the private sector and civil society to participate in formulating sectoral policies and resource management measures.

The study recommends urgent reforms to make marine fisheries more resilient and enable the sector to contribute sustainably to the wealth of the continent’s coastal countries.

Marine fisheries are a crucial contributor to food security and quality of life in Africa. Good nutrition is a key factor to quality of life, and the marine fisheries sector supports the nutrition of more than 300 million people, the majority of whom are children, youth and women. It also provides more than 10 million direct and indirect jobs.

Dominated by artisanal fishing and traditional value chains, the fisheries sector in Africa is mainly informal and is rarely considered in public policies or in assessing the wealth of countries.

Like other sectors, the African fisheries sector has been severely hit by the Covid-19 pandemic. Covid has affected supply markets and regional trade. This has resulted in substantial economic losses for most households that depend on fisheries.

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Top Trends Impacting Global Economy, Society and Technology

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The new technologies of the Fourth Industrial Revolution, such as artificial intelligence (AI), the cloud and robotics, are changing the way we live, learn and do business at a rate unprecedented in human history. This seismic shift is playing out in a world characterized by unreliable political landscapes and increasing environmental instability.

Scenario planning in this environment can be very difficult for businesses, affecting their ability to plan for the future, and properly assess the risks and opportunities that may present themselves. The Technology Futures report, released in collaboration with Deloitte, provides leaders with data analysis tools to scenario plan and forecast future technology trends.

“The rapid pace of technological change, alongside the global crisis caused by COVID-19, means that leaders today need new tools to understand challenges and develop strategies in the face of an increasingly uncertain future. This report provides three new analytical tools for business leaders to think about the future in a dynamic environment,” said Ruth Hickin, Strategy and Impact Lead, Centre for the Fourth Industrial Revolution, World Economic Forum.

“We are delighted to collaborate with the World Economic Forum to take a disciplined look into the future, particularly as we emerge from a world-altering event, like COVID-19,” said Mike Bechtel, Managing Director and Chief Futurist, US Consulting, Deloitte, and lead author of the report. “We hope that by providing a clearer picture of how today’s nascent technologies will impact our future, we can play a meaningful part in driving innovation, collaboration and economic growth that improves life for all people.”

The report breaks down future trends into four categories for business leaders and provides some examples of what is likely to remain constant in the years ahead.

  • Information: With the volume of accessible data exploding and more of our personal lives lived online, the report projects the probable implications for remote learning, remote working and healthcare.
  • Locality: Since the onset of COVID-19, even more of our interpersonal interaction is virtual and physical experiences have dwindled. The report projects more niche, readily available virtual experiences available to consumers.
  • Economy: The report forecasts a growing likelihood that flexible and clean energy production will continue rising.
  • Education: Personalized education will likely grow, along with the availability of digitized and virtualized content.

In addition to strategic modelling, the report gives leaders a baseline history of how the Fourth Industrial Revolution has progressed. It highlights just how fast technology is evolving and outlines one way risk management could evolve to better address and adapt to it.

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