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61st Governing Body Meeting: Annual Report [10–12 April 2019, Manila, Philippines]

Annual Report of the Secretary-General
by Dr. Santhi Kanoktanaporn
APO Secretary-General

Ladies and Gentlemen:

It gives me great pleasure to welcome APO Directors, Advisers, and Observers to the 61st Session of the Governing Body (GBM) held in the Philippines. I would like to express my deepest gratitude to the Government of the Philippines for hosting this year’s GBM. It is a privilege and honor for me to once again address the Governing Body.

When I first took on the challenge of the post of the APO Secretary-General two and one-half years ago, the Secretariat introduced initiatives incorporating new digital technology elements aimed at addressing the current and future needs of member economies with your cooperation. However, new initiatives to replace obsolete ones was not enough. A different, more sustainable business model was required to enable the APO to achieve its vision and mission.

At the last GBM held in Lao PDR, Review of the Roadmap to Achieve APO Vision 2020 and a new business model were first presented to Directors. The new business model and its transformation strategy were further deliberated on by member countries at the Strategic Planning Workshop last July before being translated into program plans for 2019 and 2020. Those program plans were then discussed and endorsed by the Workshop Meeting of Heads of NPOs (WSM) held in Indonesia. To recap, the six key business transformations required to pivot to the new business model are: policy advisory services; digital business ecosystem; comprehensive national productivity master plans; industry transformation centers; the APO Accreditation Body; and co-branded research.

With your strong support, we have finally reached the final but most challenging phase in our transformational journey: strategy execution.

The Secretariat has revamped the budget format to better reflect the new business model. In the revised budget for 2019–2020 presented to the GBM, existing and transformational programs were reclassified into the three broad categories of the Smart Transformation, Capability Development, and Individual-country Programs.

Smart Transformation is spearheaded by the Industry Transformation and Agriculture Transformation Initiatives. Industry Transformation aims to upgrade the sector in response to paradigm shifts caused by Industry 4.0, while Agriculture Transformation aims to improve productivity through policy advisory services and the adoption of digital applications in the agrifood sector. To support the move to a platform-based model for both industry and agriculture, a new digital business platform program was included in the budget. That platform will leverage technologies to help connect the APO with its stakeholders in industry and agriculture. Another program introduced at the 2018 APO Sustainable Productivity Summit was the Future Food Initiative, which will contribute to the sustainable food security of member countries.

The Capability Development Program is underpinned by the three subprograms of Strategic Foresight, the Accreditation Body, and Sustainable Productivity. Strategic Foresight is a completely new program aimed at helping member governments enhance the future-readiness of strategic planning by embedding foresight capabilities into the long-term planning process. Under the Accreditation Body, the APO will assist NPOs in developing new productivity courses to increase the pool of certified experts in member countries. This will not only strengthen the capacity of member countries in productivity fields but also enhance the brand recognition of the APO and NPOs throughout the Asia-Pacific. The Sustainable Productivity Program deepens the APO’s current productivity measurement capability and expands its research into the development of new measures that more accurately capture the contributions of technology through collaborations with leading global institutions.

As you know, the Individual-country Program is not a new category. Core programs such as Technical Expert Services, Bilateral Cooperation Between NPOs, and Establishment of Demonstration Companies are familiar to member countries. The new Specific National Program (SNP) introduced in 2018 with the endorsement of the 2017 WSM can potentially become the single most impactful program offered by the APO. Initially, we faced a steep learning curve in working with member governments to develop comprehensive national productivity plans. Since this approach requires integrating efforts across key stakeholders in each country, it is critical to have strong leaders with the political will to champion national productivity drives. Through sustained efforts supported by NPOs, we gained the confidence of key officials and worked with relevant government agencies to deliver a national productivity blueprint for Cambodia in 2018. Similar blueprints for other member governments will be completed this year under the SNP.

The programs in the revised budget are at the heart of the transformation strategy. When successfully implemented in the next two years, they will move the APO completely into the new business model.

One of the agenda items for this GBM is a proposal to form a task force to discuss a new 2025 vision and strategy for the APO. Under the current Roadmap to Achieve the APO Vision 2020, I would like to report to the Governing Body that member economies are projected to achieve a 2.9% labor productivity growth rate for 2017–2020, which is short of the 3.7% target. For its Global Competitiveness Index (GCI) rankings, the World Economic Forum revised the methodology used in computing the scores from 2018. Prior to the revision, APO member economies as a group had made good progress, with an improvement of 3.3 points compared with the targeted 5 points by 2020. However, a closer examination of the 12 pillars that form the GCI reveals that most APO member economies need to substantially improve in three major areas to make further progress up the GCI:

  • Labor markets, in the areas of remuneration, productivity, female labor force participation rates, and internal labor mobility;
  • Skills, in the areas of the quality of training, skill sets of graduates, digital skills among the population, ease of finding skilled workers, and critical thinking in teaching; and
    Institutions, in the areas of future orientation of governments, efficiency of legal frameworks in challenging regulations, corruption, intellectual property rights, and ICT adoption.
  • Some of these weaknesses are being addressed in our current programs. Together with member countries, we will continue to identify critical gaps and propose solutions to the Governing Body to reduce them.

The achievements of the APO and details of its projects and other activities are captured in the comprehensive APO 2018 Annual Report. I will highlight and expand on some of the key achievements in my presentation to be delivered during the GBM.

This year will mark the 58th anniversary of the founding of the APO in 1961. Henry Ford once said that, “Coming together is a beginning; keeping together is progress; working together is success.” Success is, however, not a destination; like productivity, it is a journey. For the APO to continue to flourish as a dynamic organization in a future dominated by artificial intelligence, we must take a holistic and proactive approach to solve sustainability issues and ensure that the benefits of productivity gains are shared fairly with our people. In the end, the reason why high productivity growth is important is to sustain socioeconomic development and ultimately allow current and future generations to prosper.

Thank you.

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