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

Stocks and Financial Services Press Releases Monday December 30, 2019 15:24
Bangkok--30 Dec--PwC Thailand
  • A third of business leaders surveyed by PwC (37%) say advanced automation and AI are top strategic priorities in the next two years
  • Over 80% 0f business leaders in the region increasing spend on upskilling
  • Asia Pacific business leaders call for increased regulation of AI, Cyber and Data to enhance trust

BANGKOK, 30 December 2019 - 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 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 Cooperation (APEC) member economies.

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 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. "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%) 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, PwC's global chairman.

"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.

Sira Intarakumthornchai, CEO for PwC Thailand, commented:

"Like other peers in the Asia-Pacific region, Thai businesses will continue to face many challenges in 2020, whether it be ongoing concerns over the US-China trade dispute, political unrest in many parts of the world and the impact of the baht's continued appreciation on exports and tourism.

"Even so, next year we expect to see even greater adoption of technologies such as advanced automation, cloud computing and AI. It's more important than ever for Thai companies to look at upskilling their workforce, which is a priority for many CEOs and business leaders around the world."

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