Building Innovative Services Critical to Sustaining Asia-Pacific growth
Building a more innovative services sector is critical to sustaining economic growth in the Asia-Pacific, recommends the latest Economic Trends Analysis report presented by the APEC Policy Support Unit at a news briefing on Thursday.
As APEC Leaders and Ministers gather this week in Beijing to develop APEC’s agenda and initiatives, bolstering the region’s growth will be a key issue on the table. GDP among APEC member economies in the region grew only 3.9 per cent in the first half of this year, down from the 4.3 growth rate seen in the second half of 2013.
However, APEC can build on its strengths to stimulate future growth, particularly by harnessing the region’s dynamic services sector.
“Twenty-five years into APEC’s remarkable economic transformation, the services sector has been the important driving force,” said Dr Denis Hew, Director of the APEC Policy Support Unit, during a news briefing in the APEC International Media Center in Beijing.
“The services sector has been outperforming all other sectors and can be further leveraged to provide higher-income jobs for the Asia-Pacific,” added Dr Hew.
Of the three main sectors of the APEC economy—agriculture, industry and services—services recorded the highest average annual growth rate between 1989 and 2009. During this period, APEC output grew by 83 percent, of which 60 percentage points can be attributed to the expanding services sector, the report found.
“There is now more pronounced interaction between services and other sectors in the economy with manufacturers increasingly using services to differentiate their products and to improve production efficiency” said Quynh Le, Analyst at the APEC Policy Support Unit.
“As services also occupy a strong presence in global production chains, the development of the services sector will not only important to enhance the regional productivity but it will also deepen the region’s capacity to move up the global value chain,” recommended Ms Le.
According to the report, APEC can play an important role in fostering the competitiveness of the services sector by promoting innovation. Examples of innovation in the services industry include the advent of online shopping or the introduction of low cost carriers in air transport.
The report recommends APEC can reform the IPR system to reflect the unique characteristics of services innovation. In addition, the necessary supply of high-skilled workers, particularly information and communications technology professionals, will require changes to the region’s human resource and cross-border labor mobility policies.
“Some of these issues will be addressed this week by Leaders through a new Blueprint for Connectivity currently being considered,” said Dr Alan Bollard, Executive Director of the APEC Secretariat.
“Increasing people-to-people connectivity is high on our agenda, particularly facilitating the flow of labor and students across borders as well as ensuring skills and knowledge exchange. This will be critical to leveraging the rapidly evolving services sector in order to boost growth and incomes in the region,” concluded Dr Bollard.
For more information on the latest APEC Economic Trends Analysis Report on building an innovative services economy, click here.
For a review of how APEC’s policies over the last 25 years have resulted in enhanced competitiveness and economic growth, click here.
For the 25th Anniversary APEC in Charts 2014, click here. The publication provides a graphical overview of the APEC region’s economic, trade, investment and policy-related performance.
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