Take on Tomorrow @ the APEC CEO Summit: In unprecedented times, how can we create growth that’s both inclusive and sustainable?

0:01From PwC's management publications, Strategy and Business, this is Take On Tomorrow, the podcast that brings together experts from around the globe to figure out what business could and should be doing to tackle some of the biggest issues facing the world. I'm Lizzie O 'Leary, a podcaster and journalist. And I'm Femi Oke, a broadcaster and journalist. Today, we're heading to Peru. We were on the ground at the annual APEC CEO Summit, a gathering of business, government, and thought leaders from the Asia-Pacific region. In this episode, we unpack the crucial discussions happening at this year's event, including the role the Asia-Pacific region plays in global inclusive growth, how new technologies will drive that, and how to stay resilient in a shifting world.

0:52Let's head there now. Our host for the day is PWC's Sarah von Fischer.

1:03Thank you so much for joining us here on this special edition of Take On Tomorrow. We're so excited to be here at the APEC CEO Summit here in Lima, Peru. It's a yearly gathering of 21 member economies coming from the Asia Pacific region. Business and government leaders have been discussing ideas and solutions to try to tackle the challenges and also take advantage of the opportunities in the region here. In this episode of Take On Tomorrow, I'm joined by PwC's Global Chairman, Mohamed Kande. Thank you, Mohamed. And also Shinta Kamdani, the CEO of Sintesa Group, a strategic investment company in Indonesia.

1:38Thank you so much, Shinta. Good to be here. Thank you. Well, Shinta, I want to start with you. And so when we think about Indonesia, where your company is based, this market is a huge growing market in Southeast Asia. So what makes this region and really the Asia-Pacific region more broadly so important to the world? Well, if you see the Asia-Pacific regions have 2.9 billion people. It consists of one third of global population, 60 percent of global GDP and 50 percent of global trade. So obviously, this is a very significant economy in significant region. And we see now this is the platform that has both U.S.

2:18and China, actually, in this region and especially in APEC. So if you look at the diversion of trade, we look at a lot of diversion, our region, especially ASEAN, on the trade side. So it's amazing, I think, what we can do. And we can utilize this much, much more in unlocking this power, what the region has. And some of these issues that I know I'm sure you're dealing with and also the world, Mohammed, is, you know, we're talking about uncertainty. We're also talking about technology, the climate transition. You were just on a panel here at APEC kind of talking about some of these big issues. So what stood out to you from that discussion or some of the other discussions you've been hearing here?

3:01Thanks, Sarah. You know, I just came off a panel here. This is my first time at the APEC summit. I'm enjoying it. The level of energy is outstanding. But you're absolutely right. Some of the issues that we are discussing or that we discussed this morning were more around geopolitical issues. the uncertainty that is freezing a lot of corporations out there to understand what capital decisions they have to make. The technology evolution, what to do with the technology and what bets to make vis -à-vis all the technology. Climate transition is extremely important because now technology transformation and climate transition are colliding because to fuel the technology transformation, you need more energy.

3:40And everybody is going for clean energy. So we are now finding out that it's a more complex problem than it used to be because it's not one of those things happening. It's all of them literally colliding. Geopolitical issues, technology transition, and also climate change. All of them are colliding and accelerating, which is creating a lot of stress for many companies, many organizations around the world. But Shinta, you just mentioned the fact that APEC is a massive region. The need for collaboration across APEC, is that necessary, I would even say, to solve all of the different issues? And Shinta, so how do you navigate that, as part of the Asia-Pacific region?

4:16What are some of the super strengths of that region to sort of tackle these issues? So I sit in APEC, which is the advisory business council of APEC. And I think we are very clear in our recommendation to the leaders on what we think APEC should do. And I think there's a number of things to really tackle some of these challenges. And first thing is we talk about the people, right? The human capital side. And this is a huge, immense, a lot of countries are facing a lot of challenges. And the thing is, we have a big gap between the developing and developed countries, even in AIPAC. And in trying to have a regional integration, trying to see how we can not just work together, but how we can really support each other, I think is very important.

5:05So when we talk about the people, we have very concrete recommendation in terms of how does government help developing policies that will increase this accessibility for human capital development. And we talk about the education, training skills. We talk about technology. This is all how we from business needs to see how this gap can be there. And second part, we talk about challenges in terms of the climate. It's more on the energy transition. We talk about how to write the greener trade framework. A lot of developing nations are not yet sufficient to have this kind of resources. So they need support.

5:51You know, we're still talking about energy security, not just energy transition. So the affordability, the accessibility, this is key, right? And we have a lot of resources, potential, but who's going to finance it? So we are trying to really provide this recommendation to leaders, but also coming out with specific projects that can bring in bridging between the big, I mean, the developed economies, the developing countries, but also big companies and even small, medium enterprises. Guys, don't forget, this is a huge part of the economy. It's the small, medium enterprises. So these are the things that I think is important that we can really bridge this gap and the government needs to be present to facilitate this as well.

6:40And I think what you're talking about, too, is sort of like this inclusive growth, which is a topic here at APEC. And I guess what happened when we think about inclusive growth, especially with technology and AI, how do businesses tackle that? I would say that when I think about inclusive growth, I'm thinking about the people, but also I'm thinking about the countries. As you just mentioned, the gap between the different countries in APEC, between the zones that are more developed, some are developing. There are two dislocations that are happening today. The first one is around, you know, we talked about technology.

7:10We talked about AI. So access to knowledge. Now, some of the developing countries can have access to the knowledge of the developed countries because the barrier to access that knowledge is decreasing. So people can get new skills, which will create new jobs. So they don't have to be playing only resource-intensive type industries, but in services industries. That will create actually the next generation of jobs in many parts of the world that don't exist today. That's the inclusive growth, right? And the other thing is that the companies that will use the people that have more skilled have the potential to deliver more results, therefore to create more jobs.

7:45That's one thing. The second thing that is happening today with, again, that ecosystem is the fact that there is a dislocation between the people that are looking for green energy and when the potential green energy is sitting. And now the governments, with their ability to facilitate foreign direct investments so that the money actually can flow from the people that need the green energy to where you have the sources of green energy, which in turn will create more jobs. If you, for example, if one of the big hyperscalers wants to build a data center and they need their clean energy and they decide to go to a country in ASEAN, they're going to create thousands of jobs.

8:25So now you see that job creation and the reducing of the gap can be created by the government facilitating the flow of capital between the APEC countries. Money is not the issue. There is enough money that exists out there. The money just has to move to the right places to create the right jobs. And that is what we advocate to our clients and don't look at the barriers. the geographical barriers. Go where you need the resources and you'll find the right people. And we need government to facilitate the flow of people and the flow of capital. And Shinta, how do you think about that? I mean, I think the workforce issues are something that are on your mind right now.

9:02So how do you look at that? We always talk about equitable economic growth. A lot of countries are pushing economic growth. But there's this important part, which is the equity part. Equitable, right? Which is inclusive. And when we talk about inclusive, Who are they? We talk about SMEs. We talk about women. There's a big disparity right now. Look at the gender gap. So we want women to be included. But how? This is a huge issue. So I think we face Indonesia at the moment. It is facing a big issue on job creation. The investment has been moving from labor intensive to capital intensive. The kind of skills are needed, a high skill.

9:45In Indonesia, we have low skill. And this is not just Indonesia. Many countries are similar like us. Low-skilled labor. 38 % are educated from primary. We have no sufficient education. So with this, how are we going to tackle this issue? How can this be inclusive in terms of bringing everybody picture? So I think this is a big issue that cannot be tackled by a single country alone. Agreed. And we need the support. We need capacity building. So I think we are very, very clear that, you know, we need to open up our nations. While a lot of countries now seem to be very protectionist, but in a way, we are requiring this technology.

10:31We are requiring the support in education cooperation, many things, you know, so we need to open up ourselves. The government cannot sit alone and say, we have a huge country, 270 million people. We can do it alone. We cannot. I think that needs to be clear. And how do you bring AI or technology? How is that fitting into helping equity? The biggest problem with technology, AI especially with us, is first, is the infrastructure. That's important. We don't have, we have remote areas, right, a lot. Many countries similar to us also. Archipelago, we have 17 ,000 islands. The infrastructure is a big issue.

11:11So digital infrastructure is key. And the second is the people, the digital literacy. I mean, how are they going to get access to that digital literacy? And this is why a lot of businesses like us, private sector, are boosting towards bringing more digital literacy. And we need to increase more bringing AI. AI is accessible, but how much does it cost? How much does it cost to access it? So we need to understand that this requires funding as well. It's an investment. This is not just come to the table and say, you're going to get it. Right. And Mohamed, if we're looking ahead, you know, we're talking about different challenges today.

11:53But what do you see for the opportunities for collaboration in the Asia-Pacific region, you know, going forward? You know, I would say that, you know, just to add to what you just said is that first country needs to open up. They need to let the flow of capital to come into the countries. don't be protectionist because protectionism creates uncertainty for the people that have the money and that want to invest. The money comes in, there will be actually more job creation. You mentioned AI, the cost of access. The more people want to access, the more the cost is going to come down. But there is a massive opportunity in Asia-Pacific for collaboration.

12:27Across all of APEC for that matter, because again, when you look at all of the big megatrends that are happening around climate transition and energy efficiency, You mentioned you need to have energy security before you have energy transition. That is very well said because this is real. That's what's happening in some countries, right? And also to understand what the technology is, but now the technology requires energy. So no single country can solve this conundrum, that new ecosystem, they have to work together because the sources of supplies and the source of demand are not in the same place anymore.

12:58So cooperation is going to be key, and that is one of the things that is critical for APEC to continue the journey to ensure that the private sector and the government work together because capital is available. People need the ability to let the capital flow because job creation will come out of it. Costs are going to decrease. That's why, for me, the key collaboration is not just regional collaborations. It's within each one of the countries to have collaboration between the private sector and the public sector within the countries. And, Shinta, what do you hope to take home with you from this year's APEX CEO Summit?

13:31Yeah, I think we've gone through many APEX, right? And I think there's always one highlight. This is all not just a form of discussion. This has to be translated into actions. And I completely agree, Mohamed, on collaboration. But collaboration that's proven, it cannot be just talk only, right? And this is where, as ABEC, we have come up with very specific projects, how government can come in, how business can come in, which countries can participate. So we can, every time, we can monitor the progress. that there's actually some benefit and impact to people. We're not just sitting here coming to meetings every year without result.

14:10It needs to be impactful. It has to be result-oriented. Well, you know, I will say one thing, though. We are the caps of something new, right? We have talked in the past about industrial revolutions. Now we talk about the intelligent age that is coming in where the cost of intelligence is going to decrease. Something will happen. Something new will be created. and whether we call it a global south, whether we call it about developing economies, everybody will get a shot to participate because it's different. That dislocation that we're talking about between technology, energy sufficiency, geopolitical issues, something is going to be created out of it.

14:46The last time we saw so much money flow into all these new areas was actually like in the mid-90s. Yeah, wrong time. So innovation, even if half of the money that's being invested is going to get wasted, it will spur innovation. Think about the mobile internet. Without the mobile internet, you wouldn't have social media. Without social media, you wouldn't have the cloud. Think about all the companies that got created out of a spark around technology innovation, which was the mobile internet. Now we're talking about the intelligent age. The reason I'm saying all this is that I'm an optimist. More value will be created and everybody will get a chance to participate across the world because geographical barriers are not going to get in the way when it comes to the intelligent age.

15:28It's about the people and it's about the capital. And I think that's the theme. The people, this is the prosperity. This is what we need to come to the table with. Exactly. So I think innovation, inclusion, and collaboration. We always say that. We know that that's important. But how can we really now make it happen? Shinja, Mohamed, thank you both so much for joining us here on Take On Tomorrow. Really appreciate it. Thank you. Thank you for having us.

15:57well that brings us to the end of this episode tap follow or subscribe in your podcast app to get every episode as soon as it launches and if you've enjoyed this episode please leave us a review that will help others find take on tomorrow next time on take on tomorrow we ask how do business leaders run a responsible business while making money and keeping shareholders happy we We can't do business on a dead planet. There really isn't a trade-off at the end of the day. Take On Tomorrow is brought to you by PwC Strategy and Business. PwC refers to the PwC network and or one or more of its member firms, each of which is a separate legal entity.