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Archives: Special Events

45th SESSION of the APO GOVERNING BODY MEETING
3-5 September 2003, Korolevu, Fiji

Statement of the Secretary-General

by Takashi Tajima
Secretary-General, Asian Productivity Organization

Mr. A.F.M. Sarwar Kamal, APO Chairman and APO Director for Bangladesh;
Mr. Brian Singh, Permanent Secretary, Ministry of Labour, Industrial Relations and Productivity, APO Director for Fiji, and Chairman, Training and Productivity Authority of Fiji (TPAF);
Mr. Jone Usamate, APO Alternate Director for Fiji and Director General, TPAF;

Distinguished Delegates, Advisers, Observers and Guests, Ladies and Gentlemen:

It is my great pleasure to welcome all of you to the 45th Session of the APO Governing Body. First of all, on behalf of all member countries and the Secretariat, I would like to express my sincere appreciation to the Government of Fiji for hosting this important meeting. We are honored to have had His Excellency Laisenia Qarase, Prime Minister of Fiji, grace the inaugural session with his presence, and would like to thank Mr. Kenneth Zinck, the Honorable Minister for Labour, Industrial Relations & Productivity, for his warm words of welcome, and Mr. Brian Singh, APO Director for Fiji, for his kind support. I would also like to acknowledge with heartfelt thanks the excellent arrangements made by the able staff of the TPAF for the meeting and their warm hospitality extended to all of us. The inaugural address made by the minister of international trade and industry of Malaysia at the previous Governing Body Meeting held in Kuala Lumpur cautioned us about the widening productivity divide among member countries over the years. Member countries have always expressed the wish to eliminate this undesirable phenomenon. The formation of strategic alliances among member countries and NPOs has been encouraged to narrow the productivity divide.

The 2002 Annual Report, which was circulated for your kind approval, provides a comprehensive account of APO activities carried out last year. The three strategic pillars of the current APO productivity agenda, namely strengthening of competitiveness, harmony between productivity and the environment, and maintaining social fairness were taken into consideration in designing all APO activities. Today I am pleased to highlight the major achievements and efforts following the previous Governing Body Meeting and share with you some concerns and thoughts on the APO's policy, strategy, and directions in response to the rapidly changing environment and needs of member countries. I would like to start from five thrust areas.

Program Highlights

First, let me talk about knowledge management (KM.) We recognize that there has already been a shift from intensive capital-based industry to one that is largely based on knowledge. The critical question is: "How can we identify the knowledge in enterprises and individuals and utilize this knowledge in new forms?" Enabling mechanisms are required to share the knowledge within an organization and at the same time to ensure a wider distribution of applied knowledge.

Innovation will be of paramount importance in this knowledge-based economy. The APO has therefore devoted its resources to support the efforts of member countries in institutionalizing knowledge management to enhance the competitiveness of enterprises and to strengthen the capabilities of NPOs to propagate KM among their clients. Last year, KM was incorporated as a major theme in a number of APO multi-country and country-specific programs to reflect its importance. For example, a study meeting was held in Singapore to address the issue of transforming quality circles into knowledge and innovation circles for greater value creation. Technical assistance was rendered under the Development of NPOs (DON) Program to the Vietnam Productivity Center (VPC) to build up KM capabilities. In less than one year, the VPC was able to render KM services to its client enterprises. The ROC also serves as a good illustration, since its government has allocated resources to establish nationwide KM infrastructure.

SMEs are no longer operating under the old industry paradigm based on "labor and capital" but will have to compete and transform themselves in the new knowledge-based economy. Neither the size of operations nor the level of technology matters. It is the capability to enhance competitiveness, creativity, and innovativeness where SMEs can build distinctive competencies to challenge bigger corporations in niche growth areas or in the global marketplace. Recognizing the need to create vibrant and resilient SMEs that will be the backbone of the economies of member countries, the APO embarked upon a series of SME-related projects emphasizing entrepreneurship and innovation and leveraging industry networks and the global supply chain. One such project was the Asian Venture Business Forum organized annually in Osaka, Japan, since 2000 with a special grant from the Japanese government. This forum offers opportunities for small entrepreneurs in the Asia-Pacific region to forge business alliances in technology and marketing. A series of SME-related projects were implemented in the ROC on such topics as entrepreneurship, technological adaptation, and the new role of government. These projects sent a clear message to SMEs that they should operate in the KBE, foster a new innovative culture, and form networks or alliances with others to sharpen their competitive edge.

Corporate governance has now emerged as one of the most crucial issues for business corporations as its underlying principles of fairness, transparency, accountability, and responsibility have an important bearing on increased productivity and competitiveness. Both the APO Basic Research XI and the Top Management Forum held in Kyoto last March dealt with corporate governance. I wish to highlight a couple of findings derived from these projects. First, there are no global standards as such in corporate governance because it has developed against the backdrop of specific socio-cultural environments as well as firm-specific management systems and practices. Second, it was found that state-owned enterprises which are prevalent in Asian countries should introduce corporate governance for greater transparency and accountability.

The year 2002 was an epoch-making year for the Green Productivity (GP) Program. There were remarkable accomplishments for the GP Program through the APO's participation in the World Summit on Sustainable Development (WSSD) in Johannesburg, South Africa, during August. Our participation in the WSSD made the vision and achievements of the APO's GP Program known globally. Our proposal for a partnership initiative on GP-integrated Community Development (ICD) in the region was included in the official WSSD documents. As a follow-up to the WSSD, the 2nd World Conference on Green Productivity was held in Manila in December 2002 as another landmark event under the GP program. Subsequent to the 1996 World Conference on GP, the second was organized to review the progress made by the GP Program so far and to chalk out future directions in light of the decisions and outcomes of the WSSD. The APO also participated in the Third World Water Forum in Kyoto, Japan, in March 2003 and presented our views on water pollution and conservation. Eco-tourism-related activities were also undertaken to commemorate the International Year of Eco-tourism.

The first National Green Productivity Convention in Vietnam was held in Hanoi in March 2003. It was a very impressive convention attended by GP teams from nearly 80 villages all over Vietnam. A multi- country workshop on GP-ICD was also organized in Hanoi to spread the GP-ICD message more widely among member countries.

The GP Program is now at a stage where there should be more intensive private-sector participation to benefit from their extensive environmental management experience. Toward this end, a high-level GP Advisory Committee comprising representatives of the Japanese private sector has been established. The GP Program continues to expand and enhance its concept and wider applications.

A better response to globalization has become a major concern of our Agriculture Program. In this regard, we have focused our efforts on three major areas: 1) improving the competitiveness of agriculture and agribusiness; 2) promoting the sustainable development of the sector and its resources; and 3) addressing rural poverty through ICD. To improve competitiveness, for example, projects in 2002 addressed the impact of trade liberalization on agriculture, sanitary and phytosanitary measures, and food processing and export strategies. With regard to sustainability, we highlighted the importance of watershed development, conservation of forest resources, and the use of non-pesticide farming methods. To address rural poverty, the special program for ICD placed emphasis on productivity and management tools tailored for community development while at the same time reinforcing the NPOs' involvement in community development.

Exactly like private enterprises, NPOs need to refocus their vision and redefine their role to make radical changes in their way of thinking and acting in light of the increasingly competitive environment. The APO's DON Program is in place to serve this particular need. In country-specific programs, resources in the form of expert services have been deployed to help the Sri Lankan government in formulating its public-sector productivity policy, the NPO of Bangladesh in developing a strategic action plan for productivity improvement, the Mongolia National and Productivity Development Center in creating performance measures for model companies, and the VPC in upgrading IT and KM capabilities. Through its multi-country program, on the other hand, the APO has played a significant role in enhancing NPOs' institutional capability by conducting annual workshops on productivity specialists and core competence as well as the Forum on Development of NPOs. The previous Forum on Development of NPOs held in Tehran deliberated on ways to measure the integrated performance of NPOs based upon the design of the NPO scorecard. Another collaborative endeavor among member countries is the APO Best Practice Network, which has contributed to helping NPOs position themselves as leaders in the knowledge transfer of global best practices to client firms. 9. The APO Liaison Officers Meeting held at the Secretariat in April 2003 was a very rewarding event that reaffirmed the close bonds not only between liaison officers and the Secretariat staff but also among liaison officers themselves. It provided good opportunities for liaison officers to deepen their knowledge, particularly of the modus operandi of APO activities, and to understand the issues and constraints faced by each. A number of issues were raised and agreed upon for implementation.

The 2002 edition of the APO Asia-Pacific Productivity Data and Analysis, which was first introduced in 2001, was published with much improvement. I believe that the second edition presents productivity parameters in a more comprehensive manner than the first and would like to record my sincere appreciation to the chief expert and all national experts involved in this exercise. We will continue to make further efforts to improve its usefulness to policy makers in government, business, and all others concerned, for which we need stronger support of all member countries and NPOs to secure the cooperation of national experts.

Among IT applications in the APO's activities, both the APO intranet and extranet have now become fully operational, allowing us to share relevant knowledge and information with all NPOs through the APOnet and APO Web site, including e-books. I am also pleased to report that a pilot e-learning project, the JICA-Net Seminar on Total Quality Management, was implemented last February through a network of videoconferencing centers in Tokyo, Jakarta, Manila, and Kuala Lumpur. This was the first teleconferencing project organized by the APO in cooperation with the Japan International Cooperation Agency, to which I wish to record my appreciation for allowing us to use its facilities and for cosponsoring the project. We plan to organize more e-learning projects for member countries as they are cost-effective and also create greater multiplier effects.

Future Perspectives

Now I would like to change the subject to our future perspectives. The main challenge in KM is to expedite its applications at the organizational and corporate levels. APO symposia, study meetings, and seminars conducted so far have indicated that there is sufficient awareness of the subject. But until and unless organizations and corporations actually put the KM concept into practice, it will remain an armchair exercise. Because it is a new tool, not many enterprises have the confidence to apply KM techniques to day-to-day operations. In light of this, we are looking into the prospect of identifying KM-oriented corporations in member countries as models to share their practical learning experiences with all member countries. Another important endeavor is the development of measurement tools to gauge the effectiveness of KM implementation. The KM audit, for example, is one useful tool that should be developed for widespread use by member countries. A combination of demonstration effects and measurement capability is expected to widen applications of KM further in member countries.

Globalization results in the worldwide interdependence of the production of goods and services. It has brought about demands for product and service excellence, which has had an impact on the SMEs that are an integral part of the global supply chain. A majority of the SMEs in the region remain vulnerable and face structural weaknesses. In coming years, we will place greater emphasis on activities catering to the specific needs of this category of SMES. Additionally, we will devote our resources to generating programs that will foster entrepreneurship and innovation, improve supply chain management, and encourage cluster-based industrial development. These were also the priority areas suggested at the last Workshop Meeting of Heads of NPOs to support SMEs in member countries.

In the area of governance, we want to tackle two new areas. First, we will attempt to design an index of corporate governance which could be applied in member countries. Second, we wish to introduce the concept and philosophy of corporate governance to local governments and state-owned enterprises. In both cases, clear guidelines must be established for the concerned organizations to maximize the value to stakeholders based upon accountable and transparent policies and services.

Under the GP Program, special emphasis will be placed on such issues as greening supply chains, green purchasing, and waste, water and energy management. GP in communities for poverty alleviation will be expanded further and applied to other member countries. The APO is working with the Regional Institute of Environmental Technology based in Singapore and some European organizations to develop the Sustainable Investment Global Network for Asia, which is another APO partnership program registered at WSSD.

The trend of globalization will gain further momentum and have increasing influence on various aspects of the agricultural and rural sectors in the region. For example, the region's agribusiness sector will encounter growing consumer concerns over food safety and quality. Farmers and agro-processing enterprises will face increasing international competition. They are being asked to pay more attention to the environmental impact of their activities and to their resource bases. To cope with such challenges, from 2003 onward the Agriculture Program intends to place increasing emphasis on the three major areas of: 1) improving the competitiveness of agriculture through improved marketing and greater value addition; 2) promoting more sustainable development of the sector; and 3) addressing rural poverty through ICD. We will step up our efforts to strengthen the institutional linkages between NPOs and relevant agricultural agencies and reinforce collaboration between agriculture and other programs.

The APO recognizes the need for NPOs constantly to review, refocus, and redesign their activities in order to remain lead agencies in driving national productivity movements in the age of rapid change. The APO Secretariat will continue to explore new approaches under its DON Program to serve better the specific needs of NPOs and also to cater to the increasingly different needs in member countries. One of the new approaches adopted by NPOs is the sharing of resources by forming strategic alliances. Good illustrations are the alliance between the NPC India and NPDC Mongolia for productivity promotion and development, and that between the NPC Malaysia and CPC ROC for benchmarking and best practices. Such collaborations will go a long way toward making a significant difference in the capability enhancement of NPos. Ultimately, they will contribute to the strengthening of the APO in order for it to achieve excellence in its future activities. 18. At the previous Workshop Meeting of Heads of NPOs, a consensus was formed among member countries that more emphasis should be placed on Category B and Category C projects. To refresh your memory, Category B projects target selected member countries that share an interest in a particular theme or topic, while Category C projects are intended to serve individual member countries to meet country-specific needs. I think that the relevance of these two categories has increased since they are specific in nature and more suitable to meet the diversifying needs and interests of member countries. The last Workshop Meeting proposed a number of Category B projects for implementation in 2004. At the same time, we will continue to focus on Technical Expert Services and the DON Program under Category C. In line with this intention, the APO took part in the Tokyo Conference on the Reconstruction and Development of Sri Lanka held last June with the participation of 51 countries and 21 international organizations. We presented a statement to indicate our intention of providing assistance to Sri Lanka. I hope the project proposals we worked out could be put into effective implementation in close cooperation with the Sri Lankan government.

I hope that future program planning will be based on a ratio of 60 percent for Category A (open to all member countries), 30 percent for Category B, and IO percent for Category C, following the decision made at the 1998 Governing Body Meeting.

The productivity movement is multi-faceted and has become multi- dimensional, embracing not only economic but also social, community, and environmental aspects. The APO must seek new ways to help members to cope with the current realities and emerging challenges. For this purpose, the APO must strengthen its collaboration with organizations and agencies in other parts of the world. Against this background, I would like to place on record our deep gratitude for the kind cooperation received from other international and regional organizations, national and local governments, and NGOs in enriching the quality of APO activities. Let me express my heartfelt appreciation to the International Labour Organization, United Nations Environment Programme, Food and Agriculture Organization, Asian Development Bank, Colombo Plan Secretariat, Food and Fertilizer Technology Center for the Asian and Pacific Region, UBIFRANCE, Japan International Cooperation Agency, US Environmental Protection Agency, State of Hawaii, and Regional Institute of Environmental Technology, Singapore. In this connection, I am pleased to report that we have entered into an MOU with the State of Hawaii so as to step up our cooperation for the benefit of both parties. Further, we are in the process of renewing the MOU with the UNEP to strengthen our GP program. I look forward to enlarging the scope of cooperation and collaboration with those and other organizations to achieve greater excellence in our programs.

In its efforts to save costs, the Secretariat has already introduced a number of measures including the use of discount air tickets. Local implementation costs also have an important bearing on APO finances. The decision made by the Governing Body in 1998 encouraged member countries to meet all local implementation costs when hosting APO projects. I believe that there are two important reasons underscoring this decision. The bearing of local implementation costs by the host country not only demonstrates the spirit of mutual cooperation among member countries on which the APO is based, but also helps to organize more new projects to serve the needs of member countries. I am aware of the budgetary constraints faced by many member countries. Thus, I would like to reiterate the need to adhere to the above-mentioned Governing Body Meeting decision. In this respect, direct intervention by APO directors would be highly appreciated to secure the necessary budget for local implementation costs.

Let me refer to the outbreak of Severe Acute Respiratory Syndrome (SARS) which has infected a number of member countries. This has inevitably affected our operation which has led us to postpone the implementation of all projects originally scheduled for April and May. In coping with SARS, a series of precautionary and safety measures have been taken by both member countries and the Secretariat. We resumed our project implementation in mid June upon the declaration of the World Health Organization that all Asian countries and regions were free from the threat of SARS. However, I hope that all member countries will stay alert and provide a safety net to protect all people in the event that SARS may recur.

Concluding Remarks

Ladies and gentlemen, the new development scenario in the region and the world, rapid advances in technology, new concepts in business, and new demands from society will require new perspectives and strategies in our productivity endeavor. While we are confident of the future of the APO, the most important task facing us is to find innovative and creative responses to new challenges so that the APO can be the driver for change. It is said that the productivity movement is a marathon with no finish line. The challenges of globalization and technological developments which lie ahead of the APO in its productivity journey will be, no doubt, more complex to deal with than those of the past four decades. I believe that the productivity movement should be accorded its own place and responsibility in combating emerging socio-economic difficulties. It is my sincere hope that this meeting will give us new insights on how we can proactively respond to these challenges through the sharing of experiences and the pooling of the wisdom of all delegates and participants.

I would like once again to thank the Government of Fiji for hosting this meeting and the Training and Productivity Authority of Fiji for making the excellent arrangements. I wish you all very fruitful discussions and an enjoyable stay in this beautiful island nation in the South Pacific.

Thank you.