Ladies and Gentlemen:

It gives me great pleasure to welcome APO Directors, Advisers, and Observers to Vientiane and the 60th Session of the APO Governing Body (GBM). It is a privilege and honor for me to address the GBM once again. At the outset, I would like to express my deepest gratitude to the Government of Lao PDR for hosting this year’s meeting.

At this GBM, APO Directors are required to determine the total membership contributions for the 2019–2020 biennium. In anticipation of Turkey’s APO membership, the Secretariat had earlier proposed an increase in the total membership contributions. However, we have reverted to the same amount of membership contributions as for the current biennium after Turkey informed us that its internal procedures would not be completed in time for this GBM. We welcome and look forward to Turkey officially becoming a member of the APO, after which the annual budget and program plan will be adjusted accordingly. I would like to thank the Governments of Japan and the Republic of China for providing special cash grants enabling the APO to implement additional programs on top of those funded by membership contributions. In particular, Japan’s additional contributions have boosted the APO’s annual revenue by more than 25%.

I am aware that the membership contribution formula is to be reviewed for the 2021–2022 biennium. Later this year, the Secretariat will circulate a proposal to the Governing Body to seek the views of member countries on a revised formula. If APO Directors are able to reach a consensus, we will be able to adopt the revised formula at the next GBM in 2019.

In the past year, I have stepped up my engagement with APO Directors, Heads of National Productivity Organizations (NPOs), and other stakeholders in the APO. Those interactions provided excellent opportunities for me to hear directly from member countries on your needs and expectations as well as observe firsthand the environments and structural contexts in which NPOs operate to carry out their productivity missions. Since member economies are facing similar disruptions caused by the unprecedented speed, breadth, and depth of the new waves of digital technologies, there were also intense discussions on how the APO needs to transform to stay relevant to them.

We are facing challenging times, in a challenging environment, with challenging resource needs. Against this background, the Secretariat reviewed the progress of the APO Roadmap to Achieve Vision 2020. The roadmap and its strategies are not meant to be set in stone. They should continue to evolve along with the global environment and explicitly recognize possible areas for improvement. The Secretariat has engaged Accenture to assist us in a review of the roadmap, taking an “outside-in” approach to focus on external trends and the new technologies that are changing the economic landscape both now and moving forward.

Even without that review, we are committed to change. The time has come for a new model of member country engagement, one that strengthens and deepens communication among member governments, NPOs, the Secretariat, and the sectors we want to make more productive. Member country engagement has been for too long focused on structured annual meetings. If engagement is to be meaningful and productive, it needs to be a year-round conversation about improving the value of the APO to key stakeholders. We should recognize this and embrace our responsibilities to deliver extraordinary outcomes to them.

For this reason, the Secretariat has introduced various new initiatives such as the Strategic Planning Workshop organized between the GBM and Workshop Meeting of Heads of NPOs (WSM) to involve national strategic planners on a more informal basis. The Secretariat has also recently organized a Strategic Foresight Workshop involving a small group of APO Directors and NPO Heads to kick off the program to help member countries build capabilities in foresight, which are critical to shaping future-ready national policies.

Last year, we developed a new program at the WSM. The name of the program, the Specific National Program (SNP), speaks for itself. The objective of the SNP is to enable member countries to embark on more impactful national initiatives. We are shifting our approach to working with individual members to address their more specific needs through the SNP. The multicountry project is a unique feature of the APO, which can be leveraged to create more sharing and learning forums among participating member countries. We will reexamine how we can transform multicountry projects in consultation with NPOs and the assistance of external consultants.

Structurally, the Secretariat needs to be reorganized. We have in the past depended mainly on external consultants to provide expertise for our projects. That approach may have worked well in the past and allowed the Secretariat to take advantage of external expertise to implement many projects covering multiple facets of productivity. However, as we move forward, we must identify emerging policy challenges and reinforce our ability to address them. We need to review our current approach to initiate and sustain the types of activities that will create effective national impacts on productivity.

Before concluding, I will highlight some of the APO’s key achievements from last year. The details of the projects and other activities are captured in the comprehensive APO 2017 Annual Report.

Under the Industry 4.0 Program, we initiated research to develop a roadmap that will prepare member countries to embrace Industry 4.0 through a step-by-step approach by evaluating the level of readiness and providing hands-on experience. In this connection, the COE on IT for Industry 4.0 was launched in India last June. The objective is to leverage India’s strengths in information and communications technology, which are disrupting manufacturing value chains. Under the Special Cash Grant Program on Energy Conservation funded by the Ministry of Economy, Trade and Industry of Japan, the APO supported demonstration projects in Bangladesh, Mongolia, Nepal, Pakistan, and Sri Lanka. All the projects were highly successful and achieved double-digit percentage reductions in energy usage.

Last year, the APO advised the Pakistani government on the design of a national framework for productivity, quality, and innovation. Pakistan is reinvigorating its productivity movement to align with its long-term national development agenda, and the APO will continue proactive support to Pakistan to achieve its goals. Assisting member governments in the formulation of national productivity policies will be accorded a higher priority for the APO. Given the volatile and complex environment that member countries face, the APO launched its Strategic Future Platform to build foresight and scenario-planning capabilities in member countries to navigate the uncertain global environment and sustain productivity growth. The APO also unveiled the eAPO, which marks a new phase in the e-learning initiative to provide professionals with state-of-the-art productivity knowledge on a mobile-learning platform. We will be expanding our e-learning initiative with massive open online courses to provide even better learning experiences for member countries.

The share of the agriculture sector has shown a long-term declining trend in all Asian economies but it continues to be labor intensive, accounting for one-third of employment in Asia. In 2017, the APO implemented almost 50 projects aimed at boosting agricultural productivity through capital deepening by introducing future-proof smart technologies in farming, food processing, and food safety and quality management systems. Tackling agricultural productivity alone is not enough. The UN projected that the current world population of 7.6 billion is expected to reach 8.6 billion in 2030 and almost 10 billion in 2050. This translates to around 1.5 million people being added to the world every week, creating new megacities and swelling urban populations. To address these issues, technological solutions will have to be tested and introduced to enable us to produce more food from fewer resources. The APO has started a new Future Food Program aimed at finding food alternatives as well as introducing the next generation of food systems to Asia.

Last year, we also introduced the Strategic Planning Workshop, or SPW for short about three months before the WSM. The SPW is positioned as a more informal platform for APO Directors, NPO Heads and the Secretariat to discuss and develop better programs, particularly national initiatives that are more impactful compared to standard projects.

The momentum for change is building. The APO is starting to adjust its course, adapt, and shape its role as the productivity champion of the Asia-Pacific with a foothold in Europe, as soon as the formalities of Turkey’s membership are completed. The APO of the future must act as a spearhead to blaze a path for NPOs to adopt new knowledge and capabilities to improve the productivity of member economies. There is a now strong sense of anticipation and expectation of innovations to come.

The task of transforming the APO is daunting but not impossible. It is not impossible because in my many discussions with APO Directors and Heads of NPOs, I have received unreserved support and encouragement for efforts to map a more dynamic future for the organization. I would like to express my deep gratitude to member countries for that support and for the flexibility, understanding, and cooperation extended to me at all times. In everything we do, we must think ahead and focus on our productivity mission. Together, we will shape the future of the APO.

Thank you.